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LAZATIN V.

TWANO

FACTS: Article 2197 mentions the kind of damages recoverable,


Angel C. Twao and Gregorio T. Castro for the recovery of among which are (1) actual or compensatory and
P35,000 plus interest against F. L. Lazatin, et al. for their (2) moral Article 2219 provides that moral
purchase from the U.S. government of 225 auto-trucks. damages may be recovered in the following and
CFI: dismissed the complaint as well as intervention analogous cases . . .
CA: reversed - Twao and Castro are co-owners in the business malice is an essential ingredient
of buying and selling surplus auto-trucks, and ordered (3) malicious prosecution
the Lazatin to pay P10K so it was levied on his properties and There is an abundance of case holding that
was subsequently sold at the public auction where Twao the action to recover damages from the
and Castro were the purchasers attachment plaintiff, for the wrongful
Before the expiration of the redemption period, Lazatin issuance and levy of an attachment
deposited the redemption price (malicious attachment) is identical or is
Lazatin filed to recover from Twao and Castro the balance analogous to the ordinary action for
of P19,676.09 representing the proceeds of auto-trucks sold malicious prosecution
directly to the purchasers by Twao and Castro and secured a court did not make any finding that the said petition was
writ of attachment alleging that no security whatsoever for the maliciously sued out therefore not entitled to moral
payment claimed in the complaint and that they are removing or damages
are about to remove or dispose of their property with intent to In the absence of stipulation, attorney's fees and expenses of
defraud their creditors and that the sheriff refused to deliver the litigation, other than judicial costs, cannot be covered, except: . . .
amount deposited (4) In case of a clearly unfounded civil action or proceeding against the
Lower court granted the Urgent Motion to Dissolve the Writ of plaintiff.
Preliminary Attachment and dissolved the writ (11) In any other case where the court deems it just and equitable that
May 9, 1953: Lazatin died attorney's fees and expenses of litigation should be recovered." (Art.
March 10, 1954: Gil Gotiangco was appointed and qualified as 2208, Civil Code).
administrator of plaintiff's estate without cause, the good and honest motive, which should be
RTC: Lazatin and Central Surety and Insurance Co. solidarily presumed, when a litigant goes to court for the determination of
liable to pay P3,000 for attorney's fees, P500 for moral damages, his alleged right
6% interest and costs. considering the fact that defendants-appellant lees were drawn
CA: affirmed into this litigation by plaintiff-appellant and were compelled to
hire an attorney to protect and defend them, and taking into
ISSUE: W/N Lazatin is liable for the damages account the work done by said attorney, as reflected in the
record, throughout the proceedings, we deem it just and
HELD: YES. Affirmed with modification: elimination of moral damages equitable to award at attorney's fees for defendants-appellees
HEIRS OF BORLADO V. VDA DE BULAN PEOPLE V. DIANOS

FACTS: Facts:
April 15, 1942: Serapio Borlado sold the lot to Francisco Bacero
February 1948: His widow Amparo Dionisio Vda. de Bacero, as Involved in the incident were all residents of Cypress Point Village,
legal guardian of her minor children, sold the lot to the Spouses Irisan, in Baguio City. The relationship among them was due to a
Bienvenido Bulan and Salvacion Borbon and they declared the transaction apparently involving Teresita Ortiz (Teresita) and Josie
lot in the name of Bulan for Tax Declaration purposes and Ortiz Santos (Josie), and accused Romeo Dianos, over a piece of land
obtained the continuous, peaceful, uninterrupted, adverse and occupied by the latter.
exclusive possession of the lot until November 4, 1972
when heirs of Simeon Borlado forcibly entered and wrested On 31 December 1990, at about five o'clock in the morning, Nancy
physical possession from them. Ortiz Dasudas (Nancy) saw the accused throw a hand grenade near the
November 23, 1972: Spouses filed with the MTC a complaint for house of her parents. Josie, who was standing near the site of the
ejectment explosion was hit with a shrapnel on the left leg. Later that day, at
MTC: in favor of the spouses. The heirs were ordered to vacated around 9:30 in the evening, the accused, donned in military camouflage
the lot and pay 100 cavans of palay annually from 1972 until uniform and armed with an M-16 armalite rifle, was seen traversing the
they vacate the premises and P5K for attorneys fees and cost of Cypress Point Road. Following closely behind was his passenger
suit jeepney with three unidentified men on board.
RTC: dismissed for lack of cause of action in a decision
CA: affirmed That same evening, Teresita, together with her husband, Virgilio Ortiz
(Virgilio), her daughter, Corazon Ortiz Ihanda (Corazon), her brother,
ISSUE: W/N the 100 cavans of palay is an acceptable form of damages Ricardo Pablo (Ricardo), and her son, Zaldy Ortiz (Zaldy), were on the
terrace of their new house. The three men, Virgilio, Ricardo and Zaldy,
HELD: NO. Affirm with modification. Deleting the 100 cavans of palay momentarily left the terrace, Virgilio to relieve himself by the side of
for lack of basis. the house, Zaldy to repair home and Ricardo to go to the house of
Palay is not legal tender currency in the Philippines. Nancy Ortiz Dasudas (Nancy) across the street. Ricardo met the
accused near the waiting shed. Without any warning, the latter
suddenly struck Ricardo on the face with the butt of an armalite
causing him to fall to the ground. The accused then fired at Ricardo,
hitting him on the chest and left arm. The accused then directed his
armalite at Virgilio. The latter was hit on the buttocks. The accused
thereupon fired indiscriminately at the house of Zaldy. Zaldy received a
bullet injury in his right thigh, while his daughter, Lizette Ortiz
(Lizette), was hit in her abdomen and wrist. The accused moved
towards the direction of the new house and fired at the terrace.
Teresita took a bullet wound on the neck from the volley of shots.
In the aftermath, two were found dead, namely, Teresita and 1. The court a quo erred in giving full faith and credit to the testimony
Ricardo, while three others, Virgilio, Zaldy and Lizette, sustained of the prosecution witnesses.
injuries. A report on the bodies of Teresita and Ricardo readily 2. That Dianos' "utterances" made in the presence of, and later testified
disclosed that their death were due to the gunshot wounds they had to, the police officers on their way to the hospital constitutive of the res
sustained. While the accused, right after the shooting, boarded his jeep gestae.
and sped towards Baguio City. 3. It was error for the court not to consider the parrafin examination
result.
Upon receiving a report on the incident, Pat. Ruben Forte (Pat. Forte),
Pfc. Marianito Cosape (Pfc. Cosape) and Pat. Robert Credo (Pat. Credo) Ruling:
were immediately dispatched to the crime scene. Cosape was able to 1. It is doctrinally entrenched, that the issue on the credibility of
gather several pieces of spent cartridges from the waiting shed and witnesses is a question mainly addressed to the trial court for it to
surrounding areas. At the police station, P/Sgt. Gaydowen promptly gauge and to pass upon. Not only are its determination and findings
met Dianos a burst of gunfire when the accused's jeepney was seen accorded with great respect, but also even often treated with finality.
near the sub-station coming in from Baguio City. Somehow, the accused Accused-appellant belabors the fact that all, but one, of the prosecution
was able to escape. witnesses are related to the victims. He asserts that such relationship
taints their credibility. Mere relationship by a witness to the victim,
The accused disclaimed any knowledge of, or participation in, the however, does not necessarily impair credibility. Unless the Court is
grenade throwing and shooting incidents. He recounted that while he convinced that the witnesses are clearly impelled by ulterior motives, it
was getting his passenger jeepney out from the carport, an unidentified will not discard their testimony. No such strong ill-motive has been
man poked a gun at his back and instructed him to proceed to Cypress shown here to make the Court conclude that the prosecution witness
Point Road to fetch a companion. When they were near the waiting would thereby wish to have the wrong man callously sent to jail.
shed area, he saw the unidentified man's companion, a "military man,"
clad in military camouflage uniform and armed with an M-16 armalite 2. Evidently, accused-appellant is under a misconception. Res gestae
rifle, altercating with Ricardo. The accused proceeded to Sub-station 1 rules relate to the admissibility of evidence and not to its weight or
to report the incident but he was met with a burst of gunfire. sufficiency. By res gestae, exclamations and statements made by either
Sustaining an injury in his thigh, he then drove to Sub-station 2 to seek the participants, victims, or spectators to a crime, immediately before,
police assistance. Sgt. Giovanni Gallardo and Pat. Edward Ayochok during or immediately after the commission of the crime, when the
took him to the Hospital. On the way, the accused had the chance to circumstances are such that the statements constitute nothing but
narrate to the two police officers the shooting incident in Irisan. spontaneous reaction or utterance inspired by the excitement of the
occasion there being no opportunity for the declarant to deliberate and
The RTC rendered its decision finding the accused guilty beyond to fabricate a false statement become admissible in evidence against
reasonable doubt of the crimes of Murder, Frustrated and Attempted the otherwise hearsay rule of inadmissibility. In order to admit such
Murder, with which he was charged. hearsay statements as part of res gestae, there must be a confluenceof
Hence this appeal. the following essential conditions: (1) that the principal act, the res
gestae, is a startling occurrence; (2) the statements are made before the
Issue: declarant had the time to contrive or devise a falsehood; and (3) that
the statement must concern the occurrence in question and its
immediate attending circumstances. "With regard to the fourth factor, what is to be considered is whether
there intervened between the event or transaction and the making of
There is, of course, no hard and fast rule by which spontaneity may be the statement relative thereto, any circumstance calculated to divert
determined although a number of factors have been considered, the mind of the declarant which would thus restore his mental balance
including, but not always confined to, (1) the time that has lapsed and afford opportunity for deliberation."
between the occurrence of the act or transaction and the making of the
statement, (2) the place where the statement is made, (3) the The startling occurrence of consequence to this case is not when
condition of the declarant when the utterance is given, (4) the accused-appellant was fired upon at police substation 1 but the
presence or absence of intervening events between the occurrence and shooting at the Cypress Point Village. If at all, what might be so
the statement relative thereto, and (5) the nature and the considered as part of the res gestae would be the statements of
circumstances of the statement itself. The Court, in People vs. appellant when he was shot at near the police station, but this incident
Manhuyod,[14] has explained the import of the first four factors; thus: is not at all the subject matter of the case against him. Clearly, the
fourth element, that there is no intervening event between the startling
"x x x (C)ases are not uniform as to the interval of time that should occurrence concerned and the making of the statement relative, is not
separate the occurrence of the startling event and the making of the here extant.
declaration. What is important is that the declarations were voluntarily
and spontaneously made 'so nearly contemporaneous as to be in the 3. Accused-appellant capitalizes on the negative results of the paraffin
presence of the transaction which they illustrate or explain, and were test conducted on him. A paraffin test has never been considered to be
made under such circumstances as necessarily to exclude the ideas of foolproof. On the contrary, it has been held to be highly unreliable. In
design or deliberation.' People vs. Teehankee, Jr., this Court has held:"Appellant cannot also
capitalize on the paraffin test showing he was negative of nitrates.
"As to the second factor, it may be stressed that 'a statement made, or Scientific experts concur in the view that the paraffin test has 'x x x
an act done, at a place some distance from the place where the principal proved extremely unreliable in use. In numerous rulings, we have also
transaction occurred will not ordinarily possess such spontaneity as recognized several factors which may bring about the absence of
would render it admissible.' gunpowder nitrates on the hands of a gunman, viz: when the assailant
washes his hands after firing the gun, wears gloves at the time of the
"Anent the third factor, '[a] statement will ordinarily be deemed shooting, or if the direction of a strong wind is against the gunman at
spontaneous if, at the time when it was made, the conditions of the the time of the firing."
declarant was such as to raise an inference that the effect of the
occurrence on his mind still continued, as where he had just received a WHEREFORE, the assailed decision is AFFIRMED. SO ORDERED.
serious injury, was suffering severe pain, or was under intense
excitement. Conversely, a lack of spontaneity may be inferred from the
cool demeanor of declarant, his consciousness of the absence of all
danger, his delay in making a statement until witnesses can be
procured, or from the fact that he made a different statement prior to
the one which is offered in evidence.'
SCOTT CONSULTANTS V. CA BASILAN LUMBER CO. V. CAGAYAN TIMBER EXPERT

Facts:
In the amended terms of their contract, Cagayan Timber (CT) agreed
to deliver 740k brd ft of exportable logs to Basilan Lumber (BL) by
September 1, 1951. The latter, through the East Asiatic Company
(EAC), sold the logs to a Japanese buyer.
The logs were to be loaded on the Kanatsu Maru over a two-day
period. However, the ship stayed in port for a total of eight days due
to insufficient logs and poor stevedoring service.
The CFI awarded BL additional demurrage and dead freight expenses
amounting to $9k. In reversing the CFI decision, the CA held that no
damages may be recovered without satisfactory proof of the real
existence of such damages (Arts 2200 and 2201 CC). Hence, this
appeal.

Issue: WON demurrage and dead freight not actually paid is


recoverable in an action for breach of contract to supply

Held: NO
Art 2199 CC: recoverable damages must be duly proved i.e. not
merely speculative
Actual damage was caused to EAC who already paid demurrage and
dead freight expenses, as evidenced by receipts, to the Japanese
buyer. There is no proof that BL had already paid EAC said damages
or that it had already been required to pay the same.
Terms of the agreement holding CT liable for damages it may cause BL
are merely declaratory of the obligation assumed
Not demandable upon breach, but upon proof of actual
damage suffered

DECISION AFFIRMED
MCC INDUSTRIAL SALES CORP. V. SSANGYONG CORP. The copies of the said pro-forma invoices submitted by the appellee
are admissible in evidence, although they are mere electronic
Facts: facsimile printouts of appellant's orders. Such facsimile printouts
o On April 13, 2000, the petitioner MCC Industrial Steel Corp., a are considered Electronic Documents under the New Rules on
domestic corporation engaged in the importation and wholesale of Electronic Evidence, which came into effect on August 1, 2001.
stainless steel in the country, contracted with the herein private (Rule 2, Section 1 [h], A.M. No. 01-7-01-SC).
respondent, Ssangyon Corporation, a manufacturer of stainless steel An electronic document shall be regarded as the equivalent of an
with a head office in Seoul South Korea. original document under the Best Evidence Rule, as long as it is a
o MCC ordered 220 metric ton of stainless steel for $1,860 metric ton. printout or output readable by sight or other means, showing to
It was arranged that the respondent will issue the sales invoices reflect the data accurately. (Rule 4, Section 1, A.M. No. 01-7-01-SC)
through fax, and once the petitioner conforms to such then MCC The ruling of the Appellate Court is incorrect. R.A. No. 8792,
through its general manager and president George Chan, the latter otherwise known as the Electronic Commerce Act of 2000,
has to fax the same with his signature. considers an electronic data message or an electronic document as
o On the time the petitioner had a hard time to open the latters of the functional equivalent of a written document for evidentiary
credit, Ssangyong decided to negotiate with its mother company in purposes.
korea to grant MCC a discount and to extend for a while the opening o The Rules on Electronic Evidence regards an electronic
of letters of credit. Such request was accede by respondent. The document as admissible in evidence if it complies with the
first $70,000 letter of credit was issued by MCC but the remaining rules on admissibility prescribed by the Rules of Court and
$170,000 was not. related laws, and is authenticated in the manner prescribed
o Ssangyong was compelled to file a complaint for breach of contract by the said Rules.
and prayer for damages. o An electronic document is also the equivalent of an original
o The lower court acceded with the prayer of the respondent, that document under the Best Evidence Rule, if it is a printout or
indeed petitioner failed comply with their contract despite output readable by sight or other means, shown to reflect the
discounts given as well as extension for opening of letter of credit, data accurately.
under the strong protest of the petitioner that the fax copies Thus, to be admissible in evidence as an electronic data message or
presented as document cannot be relied upon as the best evidence. to be considered as the functional equivalent of an original
document under the Best Evidence Rule, the writing must foremost
Issue: Whether the print-out and/or photocopies of facsimile be an "electronic data message" or an "electronic document."
transmissions are electronic evidence and admissible as such? Indeed the court proved that it was within the intention of the
framers of the law to consider that original printout or the
Held: electronic data store in computer or electronic gadget reduced in a
Turning first to the appellants' argument against the admissibility of readable form, will be considered as written instrument provided
the Pro Forma Invoices with Reference Nos. ST2-POSTS0401-1 and that proper authentication be made and proved, to which the
ST2-POSTS0401-2 (Exhibits "E", "E-1" and "F", pp. 215-218, respondent managed to do so.
Records), appellants argue that the said documents are The high court ruled in favor of the respondent.
inadmissible (sic) being violative of the best evidence rule.
The argument is untenable.
SONGCO V. SELLNER further credit and forced him to sell a large quantity of
sugar at a price much lower than he would have received
FACTS: if he could have carried it a few weeks longer.
Songco and Sellner owned contiguous properties where a
considerable quantity of sugar cane were planted. ISSUE: WON defendant is entitled to further damages for the alleged
Sellner wanted to mill his cane to a nearby sugar cane central. injury arising out of the attachment
However, the central were not sure that they could mill his cane and
would not promise to take it. HELD: No
Sellner then conceived the idea of buying the cane of Songco, which Lower court committed no error in refusing to award damages
was going to be milled by the Sugar Central. Motives: upon the ground cited by the defendant, as such damages were
1. so that he could run his own cane in at the same time Songcos remote and speculative.
cane should be milled by the Central It could hardly be foreseen as a probable consequence of the suing
2. so that Sellner could get a right of way over Songcos land for out of his attachment that the creditors might withheld their credit.
conveying his own sugar tot he central Plaintiff certainly cannot be held accountable for the complications
Accordingly, he bought Songcos sugar cane as it stood. He executed of defendants affairs which made possible the damage which in fact
3 promissory notes for the purchase price. Two of these notes were resulted.
paid. SC deemed it best not to disturb as well the decision of the lower
Songco filed an action to recover the 3rd PN. In his defense, Sellner court not to award punitive damages claimed by the plaintiff on the
alleged that Songco falsely represented that the cane would produce ground that the attachment was maliciously sued out.
3,000 piculs of sugar but the crop, as it turned out, produced 2,017
piculs only. Judgment affirmed.
TC rendered judgment in favor of plaintiff. Hence, this appeal.
Incidentally, plaintiffs sued out an attachment against the
defendant, at the time of the institution of the suit, upon the ground
that he was dispossessing of his property in fraud of his creditors.
Lower court found that the charge that the defendant was
dispossessing of plaintiffs property was completely refuted by
proof showing that the defendant is a man of large resources and
had not attempted to convey away his property as alleged.
o It then awarded damages to the defendant equivalent to
the amount actually paid out by him in procuring the
dissolution of the attachment.
o Defendant appealed, contending that the lower court
erred in refusing to award him further damages for the
injury done to his credit. He alleged that one of his
creditors, upon learning of the attachment, withheld
SEAVAN CARRIER INC. V. GTI SPORTSWEAR
In G.A. Machineries, Inc. v Yaptinchay, SC held that in order for
FACTS: damages under Article 2200 of the CC to be recovered, the best
evidence obtainable by the injured party must be presented.
GTI Sportswear Corp. (formerly GTI Garments Corp.) contracted Bare assertion of loss would not suffice.
the services of Seavan Carrier, Inc. for the transport of cartons of
denim jeans for export.. In the instant case, respondents failed to furnish the best
evidence obtainable or even sufficient evidence in order to
However, of the 294 cartons supposed to be delivered by GTI to warrant the award by the lower court of the amount of P2.4M.
South Harbor, Port Area, 100 cartons were lost en route to the
pier. The only basis for the award was the testimony of the manager
of the international department of GTI that there was an order
It would appear later that the 100 cartons were diverted by the of 12,000 pieces of cotton jeans per month for the year 1978, but
driver of Seavans delivery van, in connivance with other the customers, after having learned the loss, the orders were
persons, to warehouse in V. Mapa. A confession to this effect was completely cancelled.
signed by the driver.
No document or written instrument was presented to prove that
GTI filed a case for a sum of money and damages. Lower court there were really orders of that volume for the year 1978, and as
ordered Seavan to pay plaintiff the ff.: in the Yaptinchay case, no evidence was presented to show the
average actual profits realized by the respondents during the
1. P182k value of 100 cartons of denim jeans lost, plus the legal previous years to enable the lower court to reasonable ascertain
rate of interest the amount of actual damages that the latter suffered.
2. P160K Tariff and Customs duties paid by plaintiffs on the lost
items What was given in testimony were the corporations possible
3. P2.4M representing losses in the goodwill of plaintiff gross earnings had its foreign customers not learned about the
4. 20% of the total amount as and for attorneys fees loss of the 100 cartons of jeans.
5. cost of proceedings
The evidence cannot warrant the award of damages for the loss of
ISSUE: WON the award of damages was correct anticipated profits, much less the amount of P2.4M.

HELD: No Award of damages of P2.4m deleted.

The award of P2.4M damages against a claim and prayer


involving lost merchandise valued at only P182k and with
insufficient evidence to support it is an act amounting to grave
abuse of discretion on the part of the lower court.
GENERAL ENTERPRISES INC. V. LIANGA BAY LOGGING CO. an excess of 1M logs per month. It also agreed to supply 200M brd ft
of logs to Japanese buyers over a five year period. Sinungaling!
Facts: Art 2200 CC: indemnification for damages comprehends not only the
General Enterprises (GE) entered into a contract with Lianga Bay value of the loss suffered but also that of the profits which the creditor
Logging (LB) whereby the former was designated as distributor of the fails to obtain.
logs supplied by the latter. GE is entitled to 13% of the gross f.o.b. Over a five month period beginning June 1959, GE sold over 7M brd ft
value of the logs exported. of logs to Korea and earned P79k in commissions. When LB failed to
The contract was to remain effective for two years beginning June 1, deliver the logs beginning January 1960, GE ceased to earn any
1959. On October 27, 1959, however, LB sent written notice to GE commission. Had LB continued to deliver the logs as it was bound
stating that it wont be able to supply logs for export due to pursuant to the agreement, it is reasonable to expect that GE
unavailability of additional logging machinery and restrictions would have continued to earn its commission in much the same
imposed by the Phil. Govt. Within a four-month period, LB gave a manner as it used to in connection with the previous shipment of
total of five notices to GE stating various reasons for non-performance logs, which clearly indicated that it failed to earn its commissions
of its obligation to supply the logs. GE, on the other hand, reminded it should during this period of time, which is approximately
LB to fulfill its obligations under the contract as otherwise it would be P400k (17 months remaining in contract X 2M brd ft per month X
held liable for breach. P0.01 commission per brd ft). Mathematical genius not
Par 8(b) of their agreement gives the valid causes for required!
suspension of the contract, among which are: a) the P100k as exemplary damages is oppressive considering that LB did
enactment of national or local law or ordinance; b) not act in a wanton (noodles), oppressive, or malevolent manner.
issuance of any prohibitive or restrictive order; and c) any P50k is sufficient for its reprehensible act of resorting to half-truths in
other cause not within the control of the party making order to justify its desistance from the contract.
relief from any of the requirements of the contract. Attorneys fees justified considering the importance of the litigation
GEs reminder was left unheeded. Hence, it filed an action for breach and the amount of time and effort involved.
of contract and recovery of damages with the CFI. The court ruled in
its favor awarding P400k as actual damages, P100k as exemplary DECISION MODIFIED
damages, and P40k as attorneys fees and litigation expenses. Hence,
this appeal.

Issue: WON actual and exemplary damages and attorneys fees are
justified

Held: YES (actual and attorneys fees), NO (exemplary)


It should be noted that LB is guilty of breach of contract as the causes
cited for non-performance of its obligation are not among those
expressly stated in the contract. Moreover, LB mentioned that it had
MAGAT V. GUERRERO the obligor may also be released therefrom, in whole or in part. Here in
the case, the denial of permit to import resulted the non compliance of
Facts: the obligation and the inability to secure the letter of credit.
o Guerrero is the President and Chairman of the Guerrero Transport
Services (GTS), a single proprietorship. IN 1972, the GTS won a
bidding to operate a fleet of taxicabs in Subic. As the highest bidder,
Guerrero was required to have four door, four wheel, radio
controlled, meter controlled and sedans taxi services.
o Guerrero and Magat, General Manager of the Spectrum Electronic
Laboratories, executed a letter-contract for the purchase of
transceivers at $77,620.59 FOB, Yokohoma. Magat was to deliver
within the 60-90 days after receiving from the Guerrero the
assigned frequency. Magat then contacted his Japanese supplier
(Koide & Co., Ltd.) and placed an order for the transceivers.
o On Sept. 22, 1972, in the event of the Martial Law, the then
President Marcos issued the Letter of Instructions (LOI) no. 1 which
stated: SEIZURE AND CONTROL OF ALL PRIVATELY OWNED
NEWSPAPERS, MAGAZINES, RADIO AND TELEVISION
FACILITIES AND ALL OTHER MEDIA OF COMMUNICATION., said
LOI was for the prevention of Propaganda actions against the
government.
o On Sept. 25, 1972. Pursuant to the LOI, the Radio Control Office
issued Administrative Circular no. 4, which stated: SUSPENDING
THE ACCEPTANCE AND PROCESSING OF APPLICATIONS FOR
RADIO STATION CONSTRUCTION PERMITS AND FOR PERMITS
TO OWN AND/OR POSSESS RADIO TRANSMITTERS OR
TRANSCEIVERS. said circular suspended the sale and purchase of
radio transmitters or transceivers.
o The permit to import the transceivers was denied because of the
Martial Law
o Guerrero was not able to obtain the necessary letter of credit. He
then did not continue with the contract.

Issue: W/N there is a breach of contract

Held: No. The law provides that when the service has become so
difficult as to be manifestly beyond the contemplation of the parties,
SOLID HOMES INC. V. CA then affirmed by Court of Appeals upon appeal. The Court has yet to
hear from private respondents.
FACTS:
o Investco Inc., Perez and Staley, private respondents contended that, ISSUES:
on September of 1976, they entered into a contract with Solid 1. Was there enough bases to support courts award for attorneys fees?
Homes, selling six (6) parcels of land in Quezon City and Marikina 2. Whether or not the payment schedule should be adjusted
for P10,211,075.00.
o Private respondents furthered that Solid Homes violated the terms HELD:
of the agreement by refusing to pay the balance of P4,800,282.91 1. No. Article 2208 of the Civil Code allows attorneys fees to be
and by failing to negotiate a settlement with the tenants and awarded by a court when its claimant is compelled to litigate with third
squatters of the property despite its receipt from Investco of persons or to incur expenses to protect his interest by reason of an
P350,000.00 for that specific purpose. unjustified act or omission of the party from whom it is sought. While
o Private respondents filed collection of sums of money, damages and judicial discretion is here extant, an award thereof demands,
attorneys fees with trial court. The trial court rendered judgment nevertheless, a factual, legal or equitable justification. The Supreme
ordering Solid Homes to pay remaining amount with P250,000 Court held that the records do not show enough basis for sustaining the
attorneys fees. award for attorneys fees and to adjudge its payment by petitioner. On
o Upon appeal to the Court of Appeals, it modified the lower courts the contrary, the appellate court itself has found that petitioners act of
judgment by lowering the attorneys fees to P50,000. withholding payment could not be said to be all that unjustified.
o In the instant petition for review, petitioner Solid Homes argues (a)
that the Court of Appeals should not have awarded attorneys fees, 2. Yes. It is undisputed that appellant Solid Homes had made a total
there being an absence of any special finding of fact to justify such payment of P6,126,645.00 leaving a balance of P4,800,282.91, which
award. refers to the 6th to the 10th installments. . Of the 5th installment due on
o The Supreme Court required private respondents to comment. July 22, 1980, the following payments were made by appellant:
Atty. Alejandro Barin withdrew as counsel for respondents Oct. 30, 1980 to Nov. 10, 1980 P150,000.00
Investco, Inc., Staley and Perez. They required private respondents Nov. 18, 1980 to Dec. 10, 1980 270,000.00
to submit the name and address of their new counsel but no Dec. 18, 1980 to Jan. 14, 1981 101,853.12
compliance has been made. Jan. 20 to Feb. 12, 1981 95,000.00
o Pending the judgment of the trial court for the collection of sums of Feb. 16 to Feb. 19, 1981 115,000.00
money, Investco sold the same parcels of land involved to Armed
Forces of the Philippines Mutual Benefit Association. P731,853.12
o Solid Homes filed two civil cases against AFPMBA and private Thereafter, no further payment was made by appellant contending that
respondents for nullification of second deed of sale. Trial court of under the provisions of paragraph 1(b) of the contract, the payment
Quezon City ruled in favor of Solid Homes in the first case. Upon schedule should be adjusted. Should Investco obtain titles to the
appeal with the Court of Appeals, the decision was reversed. The properties after July 22, 1977, the due dates of the down payment and
case was elevated to the Supreme Court. For the second case, the the subsequent payments on the balance shall be adjusted accordingly.
trial court of Pasig City ruled in favor of Solid Homes which was Court of Appeals decision AFFIRMED. Attorneys Fees DELETED.