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71
72
CASE
TITLE
Arrieta vs
NARIC
Kalalo vs.
Luz
BRIEF
DOCTRINE
PROVISIONS APPLIED
73
A stipulation fixing or
limiting the sum that may
be recovered from the
carrier on the loss or
deterioration of the goods
is valid, provided it is: (1)
reasonable and just under
the circumstances; and
(2) has been fairly and
freely agreed upon.
74
Papa v AU
Valencia
75
PAL v. CA
A judgment cannot be
rendered nugatory by the
unreasonable application
of a strict rule of
procedure. The absence of
an executing officer's
return will not preclude a
judgment from being
treated as discharged or
being executed through
an alias writ of execution
as the case may be. So
long as a judgment is not
satisfied, a plaintiff is
entitled to other writs of
execution. It is a well
known legal maxim that
he who cannot prosecute
his judgment with effect,
sues his case vainly.
76
Reparations
Commission
v Universal
Deep Sea
Fishing
"When it is expressly
stated that an amount is
the first installment, all
other installments after it
(obviously) are
subsequent installments.
The rules contained in
Articles 1252 to 1254 of
the Civil Code apply to a
person owing several
debts of same kind to a
single creditor. They
cannot be made
applicable to a person
whose obligation as a
mere surety is both
contingent and singular,."
77
Paculdo v
Regalado
78
DBP v CA
Difference between
Dation in payment and
Cession
1. Whereas dation in
payment transfers the
ownership over the thing
79
Filinvest
Credit Corp
vs Phil
Acetylene
Co. Inc.
80
De Guzman
v. CA (and
Singh)
Delivery of possession of
the mortgaged property
to the mortgagee can only
extinguish liability if the
mortgagee had actually
caused the foreclosure
sale of the mortgaged
property."
NA
81
TLG Intl
Continental
Enterprising
Inc. vs
Flores
(1972)
82
McLaughlin
vs CA
83
Soco v
Militante
payment.
Soco (lessor+plaintiff) and Francisco
(lessee+defendant) entered into a
contract of lease covering a commercial
building and the lot on which it stands
(P800 monthly rental over a period of
10 years). Some time before the civil
case occurred, Soco stopped sending
the collector of rental payments to
Francisco, prompting the latter to write
the former a letter and thereafter send
him payment for the rentals through
checks. Soco admitted having received
these checks, except for the ones
covering payments for the months of
May to August 1977. Soon after, Soco
learned that Francisco sub-leased a
portion of the building to NACIDA, at a
monthly rental of more than P3K (way
higher than the lease). Lugi sya so she
sought a way to terminate the contract
leading her to file an illegal detainer
case with the City Court of Cebu, which
ruled in her favor, but which ruling was
thereafter reversed by the CFI. The
reversal by the CFI was due to its
conclusion that there was in fact a
tender of payment of the rentals
covering the dues for May to August
1977 made by Francisco to Soco only
that Soco refused them impelling
Francisco to DEPOSIT THE RENTALS
with the Clerk of Court of the City Court
of Cebu. SC ruled that the
consignation was invalid as it is amiss
of the requirements of a valid
consignation (proof of both notification
and tender of payment). Francisco has
violated the terms of the lease contract
84
Sotto vs
Mijares
85
Reisenbeck
v CA
86
Rural Bank
of Caloocan
Inc. (and
Jose
Desiderio
Jr.) vs CA
(and
Maxima
Castro)
87
88
Leonila
Licuanan vs
Hon.
Ricardo
Diaz, Judge
of Court of
First
Instance of
Manila and
Aida
Pineda,
private
respondent.
Chan vs. CA
Articles 1252-1261 on
consignation must be
given mandatory
construction. (Soco v.
Militante) THEY MUST BE
STRICTLY FOLLOWED.
In Landicho V. Tensuan, it
was stated that
consignation must be
done with the Court or
under Batas Pambansa
Blg. 25. AFP Office of Civil
Relations is not one of the
allowed offices.
A consignation is valid if it
"Requisites of a Consignation:
89
Meat
Packing
Corporation
of the
Philippines
vs
Sandiganba
yan 2001
complies
with
the
requisites laid down; (1)
that there was a debt due;
(2) that the consignation
of the obligation had been
made
because
the
creditor to whom tender
of payment was made
refused to accept it, or
because he was absent
for
incapacitated,
or
because several persons
claimed to be entitled to
receive the amount due;
(3) that previous notice of
the consignation have
been given to the person
interested
in
the
performance
of
the
obligation; (4) that the
amount due was placed at
the disposal of the court;
and (5) that after the
consignation had been
made
the
person
interested was notified
thereof.
Consignation
act of depositing
the thing due with the
court
or
judicial
authorities whenever the
creditor cannot accept
or refuses to accept
payment
generally requires
a
prior
tender
of
payment
necessarily judicial
90
Occena vs
CA
Tender of Payment
antecedent
of
consignation, that is, an
act preparatory to the
consignation, which
is
the principal, and from
which are derived the
immediate consequences
which the debtor desires
or seeks to obtain.
may
be
extrajudicial
priority
of
the
tender is the attempt to
make a
private settlement
before proceeding to the
solemnities
of
consignation
91
92
Naga Tel
Co. v. CA
PNCC v. CA
"(Relevant to impossibility
of performance) Petitioner
used two defenses: Art.
1266 and the principle of
rebus sic stantibus.
obligor.""
Art. 1266 does not apply
to this case. It is an
exception to the principle
of the obligatory force of
contracts. The principle
only applies to obligations
to do. Since this case
involves an obligation to
pay rentals, thus an
obligation to give, the
article does not apply.
The principle of rebus sic
stantibus neither fits in
with the facts of the case.
Under this theory, the
parties stipulate in the
light of certain prevailing
conditions, and once
these conditions cease to
exist the contract also
ceases to exist.This
theory is said to be the
basis of Article 1267 of
the Civil Code.
The article, which
enunciates the doctrine of
unforeseen events, is not,
however, an absolute
application of the
principle of rebus sic
stantibus, which would
endanger the security of
contractual relations. The
parties to the contract
must be presumed to
have assumed the risks of
unfavorable
developments. It is
therefore only in
absolutely exceptional
changes of circumstances
that equity demands
assistance for the debtor.
93
YAM v. CA
94
Gan Tion v.
CA and Ong
Wan Sieng
95
BPI v. Reyes
96
PNB v
Sapphire
Shipping
97
CKH vs CA
98
Mirasol v
CA
"[Requisites of Legal
Compensation]
Art. 1278. Compensation
shall take place when two
persons, in their own
right, are creditors and
debtors of each other.
Art. 1279. In order that
compensation may be
proper, it is necessary:
(1) That each one of the
obligors be bound
principally, and that he be
at the same time a
principal creditor of the
other;
(2) That both debts
consist in a sum of
money, or if the things
due are consumable, they
be of the same kind, and
also of the same quality if
the latter has been
stated;
see doctrine
99
Associated
Bank v. Tan
100
Villanueva v
Tantuico
Perez vs.
CA
the Revised
Administrative Code)
must be one that is
admitted by the alleged
debtor or pronounced by
final judgment of a
competent court.
In such a case, the person
and the Government are
in their own right both
debtors and creditors of
each other, and
compensation takes place
by operation of law in
accordance with Article
1278 of the Civil Code.
Absent any such
categorical admission by
an obligor or final
adjudication, no legal
compensation can take
place.
The debts must both be
due and demandable,
otherwise there can be no
compensation. It was also
held that MEVER
necessarily consented to
the transferring of rights,
because of the nature of
the business that
CONGENERIC is involved
in, that of moneymarketing.
102
Silahis
Marketing
Corp. v IAC
Compensation is not
proper where the claim of
the person asserting the
set-off against the other is
not clear nor liquidated;
compensation cannot
extend to unliquidated,
disputed claim existing
from breach of contract.
103
104
Millar vs CA
105
Dormitorio
vs.
Fernandez
Execution of a final
judgment or order may be
stayed or precluded when
the said judgment has
been novated by the
parties.
106
Magdalena
v Rodriguez
107
Reyes v CA,
SoJ
Novation is never
presumed, and must be
established by showing
either: 1) That the old
and new contracts are
incompatible in all points,
or 2) That the will to
novate appears by
express agreement of the
parties or in acts of
similar import.
concurrence of the
following requisites is
indispensable:
1. there must be a
previous valid obligation,
2. there must be an
agreement of the parties
concerned to a new
contract,
Conchingya
n vs. RB
Surety and
Insurance
109
Broadway
Centrum
Condominiu
m Corp. v.
Tropical Hut
Food
Market
110
Molino v
Security
Diners
Internationa
An essential requirement
for an objective novation
is the express declaration
that the old obligation is
extinguished, or that the
new obligation be
incompatible on every
point with the old one.
Novation is never
presumed.
Article 1292
"Novation, as a mode of
extinguishing obligations,
may be done in two ways:
by explicit declaration, or
l
Corporation
(SDIC)
by material
incompatibility (implied
novation).
xxx The test of
incompatibility is whether
the two obligations can
stand together, each one
having its independent
existence. If they cannot,
they are incompatible and
the latter obligation
novates the first.
Novation must be
established either by the
express terms of the new
agreement or by the acts
of the parties clearly
demonstrating the intent
to dissolve the old
obligation as a
consideration for the
emergence of the new
one. The will to novate,
whether totally or
partially, must appear by
express agreement of the
parties, or by their acts
which are too clear or
unequivocal to be
mistaken.
A surety is considered in
law as being the same
party as the debtor in
relation to whatever is
adjudged touching the
obligation of the latter,
and their liabilities are
interwoven as to be
111
Romeo
Garcia v
Dionisio
Llamas
"
Novation cannot be
presumed; it must be
clearly shown either by
the express assent of the
parties or by the complete
incompatibility between
the old and the new
agreements.
112
California
Bus Line v
State
Investment
Inc
Re: check
This was not a novation. First, there is
no unequivocal declaration of the
original loan being extinguished by the
acceptance of the check. Second, the
check was issued precisely for the loan,
making it completely compatible with
the ""original"" obligation."
"In 1979, Delta Motors obtained a loan
of 25M from State Investment House
Inc (SIHI).
Subsequently, California Bus Line Inc
(CBLI) purchased on installment basis
35 buses from Delta. Sixteen
promissory notes as well as chattel
mortgages (over the 35 buses) were
executed in favor of Delta by CBLI.
CBLI defaulted on its loan, hence it
entered into a Restructuring Agreement
(RA) with Delta wherein a new schedule
of payment was agreed upon. A take
over clause was also included in the RA,
wherein upon default, Delta may
choose to take over the management of
CBLI.
Since Delta had obligations to SIHI, it
assigned five of the promissory notes
plus buses as payment in kind.
Delta and CBLI then entered into a
compromise agreemen (CA)t where
CBLI agreed that Delta would exercise
its rights to foreclose on the 35 buses.
"Novation extinguishment of an
obligation by the
substitution or change of
the obligation by a
subsequent one which
terminates the first.
Requisites:
1. Previous valid
obligation
2. An agreement of all
parties concerned to a
new contract
3. Extinguishment of the
old obligation
4. Birth of a valid new
obligation"
"Ratio
An agreement subsequently
executed between a seller and a
buyer that provides for a different
schedule and manner of payment,
to rstructure the mode of
payments by the buyer so that it
could settle its outstanding
obligation in spite of delinquency
in payment is not novation. The
RA shows that the parties did not
expressly stipulate novation.
Absent an unequivocal declaration
of extinguishment, only a showing
of complete incompatibility
between the old and the new
obligation would sustain a finding
of novation. A review of the terms
of this RA yields no
incompatibility.
"
113
Chester
Babst v CA
114
Garcia v.
Llamas
115
Quinto vs
People
(1999)
116
Licaros vs
Gatmaitan
Conventional subrogation
requires an agreement
among the three parties
concernedthe original
creditor, the debtor and
the new creditor.
117
Astro
Electronics
Corp v
Philguarant
ee
Subrogation is the
transfer of all the rights of
the creditor to a third
person, who substitutes
him in all his rights. It may
either be legal or
conventional. Legal
subrogation is that which
takes place without
agreement but by
operation of law because
of certain acts. Instances
of legal subrogation are
those provided in Art.
1302 of the Civil Code.