10 Cases Oblicon

31. ADR Shipping v. Gallardo 32. TSPIC Corp v. TSPI Employees Union 33. Cruz v. CA 34. Philbank v. Lim 35. Rigor v. Consolidated Leasing 36. Suntay v. CA 37. Miailhe v. CA 38. Rosencor v. Inquing 39. Firme v. Buka

40. La Buga’al-Blaan v. Ramos

ADR Shipping v. Gallardo G.R. No. 134873 September 17, 2002

PONENETE: Quisumbing, J.: FACTS: Marcelino Gallardo, a timber concessionaire and log dealer doing business under the name “Mar Gallardo Trading”, entered into a charter agreement with ADR Shipping Services, Inc. for the use of the MV Pacific Breeze to transport 60,000 cubic meters of logs to Kaoshung, Taiwan. These logs were the subject of a sales agreement between Gallardo as seller and Stywood Philippines, Inc., as buyer. Gallardo paid an advance charter fee evidenced by two official receipts issued by ADR to Mar Gallardo Trading. Under the charter agreement, the boat should be ready to load by February 5, 1988 but MV Pacific Breeze failed to arrive on time. Consequently, Gallardo cancelled the contract and withdrawing now the amount deposited. However, ADR refused to return the P242, 000 already advanced by Gallardo. The latter then filed a case for sum of money and damages. The RTC rendered a decision in favor of Gallardo which was affirmed by the CA. Hence, this petition.

ISSUE: Whether or not private respondent Gallardo is entitled to the refund in the sum of P242, 000 representing his deposit for the charter of the ship provided by petitioner ADR. HELD: YES. For failure of petitioner to perform its obligation on time, respondent Gallardo is entitled to cancel the Charter Party and to demand damages. This is pursuant to Article 1191 of the New Civil Code, which provides that the power to rescind obligations is implied in reciprocal ones in case one of the obligors should not comply with what is incumbent upon him, and the injured party may rescind the obligation, with payment of damages. As to actual damages, petitioner is entitled to recover the amount of P242, 000 representing the advance freight to petitioner, as shown in the records. Because the amount due in this case arises from a contract of affreightment and not from a loan or forbearance of money, the legal interest of six percent (6%) per annum should be applied.

TSPIC Corp. v. TSPI Employees Union UNIONG.R No. 163419 February 13, 2008 PONENTE: Velasco, Jr., J.: FACTS: TSPI Corporation entered into a Collective Bargaining Agreement with the corporation Union for the increase of salary for the latter’s members for the year 2000 to 2002 starting from January 2000. Thus, the increased in salary was materialized on January 1, 2000. However, on October 6, 2000, the Regional Tripartite Wage and production Board raised daily minimum wage from P 223.50 to P 250.00 starting November1, 2000. Conformably, the wages of the 17 probationary employees were increased to P250.00 and became regular employees therefore receiving another 10% increase in salary. In January 2001, TSPIC implemented the new wage rates as mandated by the CBA. As a result, the nine employees who were senior to the 17 recently regularized employees received less wages. On January 19, 2001, TSPIC’s HRD notified the 24 employees who are private respondents, that due to an error in the automated pay roll system, they were overpaid and the overpayment would be deducted from their salaries starting February 2001. The Union on the other hand, asserted that there was no error and the deduction of the alleged overpayment constituted diminution of pay.

ISSUE: Whether or not the alleged overpayment constitutes diminution of pay as alleged by the Union. HELD: Yes, because it is considered that Collective Bargaining Agreement entered into by unions and their employers are binding upon the parties and be acted in strict compliance therewith. Thus, the CBA in this case is the law between the employers and their employees. Therefore, there was no overpayment when there was an increase of salary for the members of the union simultaneous with the increasing of minimum wage for workers in the National Capital Region. The CBA should be followed thus, the senior employees who were first promoted as regular employees shall be entitled for the increase in their salaries and the same with lower rank workers.

Cruz v. CA GR 108738, 17 June 1994 PONENTE: Quisumbing, J.: FACTS: Andrea Mayor is engaged in the business of granting interest-bearing loans and in rediscounting checks. Roberto Cruz, on the other hand, is engaged in selling ready to wear clothes at the Pasay Commercial Center. Cruz frequently borrows money from Mayor. In 1989, Cruz borrowed P176, 000 from mayor, which Mayor delivered. In turn, Cruz issued a Premiere Bank check for the same amount. When the check matured, Mayor presented it to the bank but was dishonored and marked “account closed.” When notified of the dishonor, Cruz promised to pay in cash. No payment was made, and thus the criminal action for violation of BP 22 was instituted. ISSUE: Whether or not Cruz is liable for violating BP 22, even upon the claim that the check was issued to serve mere evidence of indebtedness and not for circulation or negotiation. HELD: A check issued as an evidence of debt, though not intended to be presented for payment has the same effect of an ordinary check, hence, it falls within the ambit of BP 22. When a check is presented for payment, the drawee bank will generally accept the same regardless of whether it was issued in payment of an obligation or merely to guarantee the said obligation. What the law punishes is the issuance of a bouncing check, not the purpose for which it was issued nor the term and conditions relating to its issuance. The mere act of issuing a worthless check is malum prohibitum.

Philbank v. Lim G.R. No. 158138 April 12, 2005 PONENET: Panganiban, J.: FACTS: Respondents Elena Lim, Ramon Calderon and Tri-Oro International Trading & Manufacturing Corporation obtained a loan from petitioner Philippine Bank of Communications and executed a continuing surety agreement in favor of the latter for all loans, credits, etc., that were extended or may be extended in the future to respondents. Petitioner granted a renewal of said loan upon respondent’s  request as evidenced by Promissory Note in the amount of P3, 000,000.00. It was expressly stipulated therein that the venue for any legal action that may arise out of said promissory note shall be Makati City, to the exclusion of all other courts. Respondents failed to pay said obligation upon maturity. Thus, petitioner foreclosed the real estate mortgage executed by respondents valued at P1, 081,600.00 leaving a deficiency balance of P4, 014,297.23. ISSUE: Whether or not the parties to the Surety Agreement are bound by the stipulations in the Promissory Note. HELD: YES. Suretyship arises upon the solidary binding of a person deemed the surety with the principal debtor, for the purpose of fulfilling an obligation. Although the surety contract is secondary to the principal obligation, the surety assumes liability as a regular party to the undertaking. In enforcing a surety contract, the “complementary-contractsconstrued-together” doctrine finds application. According to this principle, an accessory contract must be read in its entirety and together with the principal agreement. This principle is used in construing contractual stipulations in order to arrive at their true meaning; certain stipulations cannot be segregated and then made to control. This nosegregation principle is based on Article 1374 of the Civil Code, which we quote: “Art. 1374. The various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly.”

Rigor v. Consolidated Leasing G.R. No. 136423 August 20, 2002 PONENTE: Carpio, J.: FACTS: Petitioners Efren and Zosima Rigor obtained a loan from private respondent Consolidated Orix Leasing and Finance in the amount of P1, 630,320.00. Petitioners executed a promissory to pay the loan in 24 equal monthly installments of P67, 930.00 every fifth day of the month and failure to do so would render the entire unpaid amount due and payable. To secure payment of the loan, petitioners executed in favor of private respondent a deed of chattel mortgage over two dump trucks. When petitioners failed to pay several installments despite demand from private respondent, the latter sought to foreclose the chattel mortgage by filing a complaint for Replevin with Damages against petitioners. Petitioners moved to dismiss the complaint on the ground of improper venue but denied by the trial court. CA affirmed the trial court’s decision. Hence, this petition. ISSUE: Whether or not the venue provision in the deed of chattel mortgage is a mere surplusage in the principal contract. HELD: NO. The chattel mortgage constituted over the two dump trucks is an accessory contract to the loan obligation as embodied in the promissory note. The chattel mortgage cannot exist as an independent contract since its consideration is the same as that of the principal contract. A principal obligation is an indispensable condition for the existence of an accessory contract. Loans, sales or leases are classified as principal contracts while pledges, mortgages and suretyships are classified as accessory contracts because their existence is dependent upon the principal obligations they guarantee or secure. The promissory note and the deed of chattel mortgage must be construed together. Private respondent explained that its older standard promissory notes confined venue in Makati City where it had its main office. After it opened a branch office in Dagupan City, private respondent made corrections in the deed of chattel mortgage, but due to oversight, failed to make the corresponding corrections in the promissory notes. Petitioners affixed their signatures in both contracts.

Suntay v. CA G.R. No. 114950 December 19, 1995 PONENTE: Hermosisima FACTS: Upon the execution and registration of the first deed, Certificate of Title in the name of Federico was cancelled and was issued in the name of Rafael Suntay. Even after the execution of the deed, Federico remained in possession of the property sold in concept of owner. Notwithstanding the fact that Suntay became the titled owner of said land and rice mill, he never made any attempt to take possession thereof at any time, while Federico continued to exercise rights of absolute ownership over the property. Federico requested that Suntay deliver his copy of Certificate of Title so that Federico could have the counter deed of sale in his favor registered in his name but Suntay refused to do so. Federico filed a complaint for reconveyance and damages against Suntay. ISSUE: Whether or not the second deed of sale executed by Rafael Suntay in favor of his uncle, should be considered ineffective and unavailing. HELD: YES. The fact that the late Rafael Suntay denied both intention and knowledge involving the sham sale and firmly maintained the validity and genuineness thereof has become incongruous because it is irreconcilable with the circumstance that he apparently never considered the disputed property as one of his assets over which he had rights of absolute ownership. The deed of sale executed by Federico in favor of his now deceased nephew, Rafael, is absolutely simulated and fictitious and, hence, null and void, said parties having entered into a sale transaction to which they did not intend to be legally bound. As no property was validly conveyed under the deed, the second deed of sale executed by the late Rafael in favor of his uncle should be considered ineffective and unavailing.

Miailhe v. CA G.R. No. 108991 March 20, 2001 PONENTE: Panganiban, J.: FACTS: Petitioners were the former registered owners of three parcels of land located at J.P. Laurel St., San Miguel, Manila with an aggregate area of 5,574.30 square meters, and a one story building erected thereon. During the height of the martial, President Ferdinand Marcos, forcibly and unlawfully took possession of the aforesaid properties without paying rentals. Meanwhile, the Office of the President directed defendant DBP to acquire for the government the subject properties from plaintiff which was then sold for a low price. That defendant DBP, in turn, sold the subject properties to Respondent Republic of the Philippines. After the EDSA revolution, plaintiffs made repeated extrajudicial demands upon defendants for the return and reconveyance of subject properties to them. That despite demands, defendants unjustifiably failed and refused to do so. ISSUE: Whether or not petitioner ’s extrajudicial demands interrupt prescription. HELD: NO. In the present case, there is as yet no obligation in existence. Respondent has no obligation to reconvey the subject lots because of the existing Contract of Sale. Although allegedly voidable, it is binding unless annulled by a proper action in court. Not being a determinate conduct that can be extrajudically demanded, it cannot be considered as an obligation either. Since Article 1390 of the Civil Code states that voidable “contracts are binding, unless they are annulled by a proper action in court,” it is clear that the defendants were not obligated to accede to any extrajudicial demand to annul the Contract of Sale. In the absence of an existing obligation, petitioner cannot be considered a creditor, and Article 1155 of the Civil Code cannot be applied to his action. Thus, any extrajudicial demand he made did not, or will not, interrupt the prescription of his action for the annulment of the Contract of Sale.

Rosencor v. Inquing G.R. No. 140479 March 8, 2001 PONENETE: Gonzaga-Reyes, J.: FACTS: Respondents are the lessees of a two-story residential apartment owned by Tiangco. The lease was not covered by any contract and respondents were allegedly verbally granted by the lessors the pre-emptive right to purchase the property if ever they decide to sell the same. Upon the death of the spouses Tiangcos, the management of the property was adjudicated to their heirs who were represented by Eufrocina de Leon. Atty. Erlinda Aguila sent a letter demanding that they vacate the premises but respondents refused to leave. Thereafter, Eufrocina de Leon offered to sell to them the property for P2, 000,000.00. A month thereafter, the property was already sold to Rosencor. The following month, respondents were demanded for the rental payment under Rosencor as the new owner. The lessees offered to reimburse de Leon the selling price of P726, 000.00 plus an additional P274, 000.00 to complete their P1, 000.000.00 earlier offer. But their offer was refused. ISSUE: Whether or not the lessors should recognize the pre-emptive right of the lessees even if it was only given verbally. HELD: the right of first refusal is not covered by the Statute of Frauds. The application of such statutes presupposes the existence of a perfected contract which is no applicable in this case. As such, a right of first refusal need not be written to be enforceable and can be proved by oral evidence. Lessees have proven that the lessors admit the right of first refusal given to them when the property was offered to them in two million. The prevailing doctrine is that a contract of sale entered in violation of right of first refusal is rescissible. However, the doctrine can’t be applied here because the vendees are in good faith. Under Article 1385, “rescission can’t take place when things which are the object of sale are legally in possession of third person who did not act in bad faith”.

Firme v. Buka G.R. No. 146608 October 23, 2003 PONENTE: Carpio, J.: FACTS: Petitioner Spouses Constante and Azucena Firme are the registered owners of a parcel of land located on Fairview Park, Quezon City. Renato de Castro, the vice president of Bukal Enterprises and Development Corporation negotiated with the Spouses Firme for the purchase of the Property. Later, Bukal Enterprises filed a complaint for specific performance and damages with the trial court, alleging that the Spouses Firme reneged on their agreement to sell the Property. Spouses Firme however stated that they did not accept the third draft offer of sell because they found its provisions one-sided. Petitioners then demanded Bukal Enterprises to remove their bunkers and vacate the Property. The trial court rendered judgment against Bukal Enterprises but this was set aside by the CA. Hence, this petition. ISSUE: Whether or not there was a perfected contract of sale. HELD: In this case, the Spouses Firme flatly rejected the offer of Aviles to buy the Property on behalf of Bukal Enterprises. There was therefore no concurrence of the offer and the acceptance on the subject matter, consideration and terms of payment as would result in a perfected contract of sale. Under Article 1475 of the Civil Code, “the contract of sale is perfected at the moment there is a meeting of minds on the thing which is the object of the contract and on the price”. If the Spouses Firme were already agreeable to the offer of Bukal Enterprises as embodied in the Second Draft, then the Spouses Firme could have simply affixed their signatures on the deed of sale, but they did not. Even the existence of a signed document purporting to be a contract of sale does not preclude a finding that the contract is invalid when the evidence shows that there was no meeting of the minds between the seller and buyer. In this case, what were offered in evidence were mere unsigned deeds of sale which have no probative value.

La Buga’al-Blaan v. Ramos

G.R. No. 127882 December 1, 2004 PONENETE: Pnaganiban, J.: FACTS: