TORTS
But the stress of the action is put on
Air France v. Carascoso and CA
G. R. No. L-21438 September 28, 1966
FACTS
On March 28, 1958, the defendant, Air France, through its authorized agent,
Philippine Air Lines, Inc., issued to plaintiff a "first class" round trip airplane
ticket from Manila to Rome. From Manila to Bangkok, plaintiff travelled in "first
class", but at Bangkok, the Manager of the defendant airline forced plaintiff to
vacate the "first class" seat that he was occupying because, in the words of the
witness Ernesto G. Cuento, there was a "white man", who, the Manager alleged,
had a "better right" to the seat.
When asked to vacate his "first class" seat, the plaintiff, as was to be expected,
refused, and told defendant's Manager that his seat would be taken over his
dead body; a commotion ensued, and, according to said Ernesto G. Cuento,
"many of the Filipino
passengers got nervous in the tourist class; when they found out that Mr.
Carrascoso was having a hot discussion with the white man [manager], they
came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat
to the white man" and plaintiff reluctantly gave his "first class" seat in the
plane.
ISSUES & ARGUMENTS Was Carrascoso entitled to the first class seat he
claims and therefore entitles to damages?
HOLDING & RATIO DECIDENDI
Yes. It is conceded in all quarters that on March 28, 1958 he paid to and
received from petitioner a first class ticket. But petitioner asserts that said
ticket did not represent the true and complete intent and agreement of the
parties; that said respondent knew that he did not have confirmed reservations
for first class on any specific flight, although he had tourist class protection;
that, accordingly, the issuance of a first class ticket was no guarantee that he
would have a first class ride, but that such would depend upon the availability
of first class seats.
If, as petitioner underscores, a first-class-ticket holder is not entitled to a first
class seat, notwithstanding the fact that seat availability in specific flights is
therein confirmed, then an air passenger is placed in the hollow of the hands of
an airline. What security then can a passenger have? It will always be an easy
matter for an airline aided by its employees, to strike out the very stipulations
in the ticket, and say that there was a verbal agreement to the contrary. What
if the passenger had a schedule to fulfill? We have long learned that, as a rule,
a written document speaks a uniform language; that spoken word could be
notoriously unreliable. If only to achieve stability in the relations between
passenger and air carrier, adherence to the ticket so issued is desirable. Such is
the case here. The lower courts refused to believe the oral evidence intended
to defeat the covenants in the ticket. Why, then, was he allowed to take a first
class seat in the plane at Bangkok, if he had no seat or, if another had a better
right to the seat?
To authorize an award for moral damages there must be an averment of fraud
or bad faith. It is true that there is no specific mention of the term bad faith in
the complaint. But, the inference of bad faith is there, it may be drawn from
the facts and circumstances set forth therein. The contract was averred to
establish the relation between the parties.
wrongful expulsion. It is, therefore, unnecessary to inquire as to whether or not
there is sufficient averment in the complaint to justify an award for moral
damages. Deficiency in the complaint, if any, was cured by the evidence. An
amendment thereof to conform to the evidence is not even required.
Passengers do not contract merely for transportation. They have a right to be
treated by the carrier's employees with kindness, respect, courtesy and due
consideration. They are entitled to be protected against personal misconduct,
injurious language, indignities and abuses from such employees. So it is that
any rule or discourteous conduct on the part of employees towards a
passenger gives the latter an action for damages against the carrier.
Singson and Castillo vs BPI and Frexas
23 SCRA 1117
FACTS: Singson was one of the defendants in a civil case, in which
judgment had been rendered sentencing him and his co-defendants therein
Lobregat and Villa-Abrille & Co., to pay a sum of money to the plaintiff therein.
Said judgment became final and executory as only against Ville-Abrille for its
failure to file an appeal. A writ of garnishment was subsequently served upon
BPI — in which the Singsons had a current account — insofar as Villa-Abrille’s
credits against the Bank were concerned.
Upon receipt of the said Writ of Garnishment, a clerk of the bank, upon reading
the name of the Singson in the title of the Writ of Garnishment as a party
defendants, without further reading the body and informing himself that said
garnishment was merely intended for the deposits of defendant Villa-Abrille &
Co., et al, prepared a letter informing Singson of the garnishment of his
deposits by the plaintiff in that case.
Subsequently, two checks issued by the plaintiff Julian C. Singson, one in favor
of B. M. Glass Service and another in favor of the Lega Corporation, were
dishonored by the bank. B. M. Glass Service then wrote to Singson that the
check was not honored by BPI because his account therein had already been
garnished and that they are now constrained to close his credit account with
them.
Singson wrote to BPI, claiming that his name was not included in the Writ of
Execution and Notice of Garnishment, which was served upon the bank. The
defendants lost no time to rectify the mistake that had been inadvertently
committed.
Thus this action for damages.
ISSUE: WON the existence of a contract between the parties bars a
plaintiff’s claim for damages based on torts?
HELD: NO. The existence of a contract between the parties does not bar
the commission of a tort by the one against the order and the consequent
recovery of damages therefore. Indeed, this view has been, in effect, reiterated
in a comparatively recent case. Thus, in Air France vs. Carrascoso, involving an
airplane passenger who, despite his first-class ticket, had been illegally ousted
from his first-class accommodation and compelled to take a seat in the tourist
compartment, was held entitled to recover damages from the air-carrier, upon
the ground of tort on the latter’s part, for, although the relation between a
passenger and a carrier is “contractual both in origin and nature … the act that
breaks the contract may also be a tort”.
In view, however, of the facts obtaining in the case at bar, and considering,
particularly, the circumstance, that the wrong done to the plaintiff was
remedied as soon as the President of the bank realized the mistake he and his
subordinate employee had committed, the Court finds that an award of
nominal damages — the amount of which need not be proven — in the sum of The burden of proving that the loss was due to a fortuitous event rests on him
P1,000, in addition to attorney’s fees in the sum of P500, would suffice to who invokes it. And, in order for a fortuitous event to exempt one from liability,
vindicate plaintiff’s rights. it is necessary that one has committed no negligence or misconduct that may
have occasioned the loss.

ROBERTO C. SICAM and AGENCIA de R.C. SICAM, INC. vs. SPOUSES JORGE
G.R. No. 159617, August 8, 2007
FACTS: On different dates, Lulu Jorge pawned several pieces of jewelry with
Agencia de R. C. Sicam located in Parañaque to secure a loan.
On October 19, 1987, two armed men entered the pawnshop and took away
whatever cash and jewelry were found inside the pawnshop vault.
On the same date, Sicam sent Lulu a letter informing her of the loss of her
jewelry due to the robbery incident in the pawnshop. Respondent Lulu then
wroteback expressing disbelief, then requested Sicam to prepare the pawned
jewelry for withdrawal on November 6, but Sicam failed to return the jewelry.
Lulu, joined by her husband Cesar, filed a complaint against Sicam with the RTC
of Makati seeking indemnification for the loss of pawned jewelry and payment
of AD, MD and ED as well as AF.
The RTC rendered its Decision dismissing respondents’ complaint as well as
petitioners’ counterclaim. Respondents appealed the RTC Decision to the CA
which reversed the RTC, ordering the appellees to pay appellants the actual
value of the lost jewelry and AF. Petitioners MR denied, hence the instant
petition for review on Certiorari.
ISSUE: are the petitioners liable for the loss of the pawned articles in their
possession? (Petitioners insist that they are not liable since robbery is a
fortuitous event and they are not negligent at all.)
Sicam had testified that there was a security guard in their pawnshop at the
time of the robbery. He likewise testified that when he started the pawnshop
business in 1983, he thought of opening a vault with the nearby bank for the
purpose of safekeeping the valuables but was discouraged by the Central Bank
since pawned articles should only be stored in a vault inside the pawnshop. The
very measures which petitioners had allegedly adopted show that to them the
possibility of robbery was not only foreseeable, but actually foreseen and
anticipated. Sicam’s testimony, in effect, contradicts petitioners’ defense of
fortuitous event.
Moreover, petitioners failed to show that they were free from any negligence
by which the loss of the pawned jewelry may have been occasioned.
Robbery per se, just like carnapping, is not a fortuitous event. It does not
foreclose the possibility of negligence on the part of herein petitioners.
Petitioners merely presented the police report of the Parañaque Police Station
on the robbery committed based on the report of petitioners’ employees which
is not sufficient to establish robbery. Such report also does not prove that
petitioners were not at fault. On the contrary, by the very evidence of
petitioners, the CA did not err in finding that petitioners are guilty of
concurrent or contributory negligence as provided in Article 1170 of the Civil
Code, to wit:

HELD: The Decision of the CA is AFFIRMED.

Art. 1170. Those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor
thereof, are liable for damages.
YES. Article 1174 of the Civil Code provides:
Art. 1174. Except in cases expressly specified by the law, or when it is otherwise **
declared by stipulation, or when the nature of the obligation requires the
assumption of risk, no person shall be responsible for those events which could
Article 2123 of the Civil Code provides that with regard to pawnshops and
not be foreseen or which, though foreseen, were inevitable.
other establishments which are engaged in making loans secured by pledges,
the special laws and regulations concerning them shall be observed, and
subsidiarily, the provisions on pledge, mortgage and antichresis.
Fortuitous events by definition are extraordinary events not foreseeable or
avoidable. It is therefore, not enough that the event should not have been
foreseen or anticipated, as is commonly believed but it must be one impossible
The provision on pledge, particularly Article 2099 of the Civil Code, provides
to foresee or to avoid. The mere difficulty to foresee the happening is not
that the creditor shall take care of the thing pledged with the diligence of a
impossibility to foresee the same.
good father of a family. This means that petitioners must take care of the
pawns the way a prudent person would as to his own property.
To constitute a fortuitous event, the following elements must concur:

(a) the cause of the unforeseen and unexpected occurrence or of

In this connection, Article 1173 of the Civil Code further provides:
the failure of the debtor to comply with obligations must be
Art. 1173. The fault or negligence of the obligor consists in the omission of that
independent of human will;
diligence which is required by the nature of the obligation and corresponds
(b) it must be impossible to foresee the event that constitutes the
with the circumstances of the persons, of time and of the place. When
caso fortuito or, if it can be foreseen, it must be impossible to avoid;
negligence shows bad faith, the provisions of Articles 1171 and 2201,
(c) the occurrence must be such as to render it impossible for the
paragraph 2 shall apply.
debtor to fulfill obligations in a normal manner; and,
(d) the obligor must be free from any participation in the
aggravation of the injury or loss.
If the law or contract does not state the diligence which is to be observed in the
performance, that which is expected of a good father of a family shall be
required.
We expounded in Cruz v. Gangan that negligence is the omission to do
something which a reasonable man, guided by those considerations which
ordinarily regulate the conduct of human affairs, would do; or the doing of
something which a prudent and reasonable man would not do. It is want of
care required by the circumstances.
A review of the records clearly shows that petitioners failed to exercise
reasonable care and caution that an ordinarily prudent person would have used
in the same situation. Petitioners were guilty of negligence in the operation of
their pawnshop business. Sicam’s testimony revealed that there were no
security measures adopted by petitioners in the operation of the pawnshop.
Evidently, no sufficient precaution and vigilance were adopted by petitioners to
protect the pawnshop from unlawful intrusion. There was no clear showing
that there was any security guard at all. Or if there was one, that he had
sufficient training in securing a pawnshop. Further, there is no showing that the
alleged security guard exercised all that was necessary to prevent any
untoward incident or to ensure that no suspicious individuals were allowed to
enter the premises. In fact, it is even doubtful that there was a security guard,
since it is quite impossible that he would not have noticed that the robbers
were armed with caliber .45 pistols each, which were allegedly poked at the
employees. Significantly, the alleged security guard was not presented at all to
corroborate petitioner Sicam’s claim; not one of petitioners’ employees who
were present during the robbery incident testified in court.
Furthermore, petitioner Sicam’s admission that the vault was open at the time
of robbery is clearly a proof of petitioners’ failure to observe the care,
precaution and vigilance that the circumstances justly demanded.
The robbery in this case happened in petitioners’ pawnshop and they were
negligent in not exercising the precautions justly demanded of a pawnshop.
ROBERTO JUNTILLA versus CLEMENTE FONTANAR, FERNANDO BANZON and
BERFOL CAMORO (G.R. No. L-45637 May 31, 1985)
FACTS
- Petitioner Roberto Juntilla was sitting a the front seat of a jeepney (driven by
one Berfol Camoro, registered under the franchise of Clemente Fontanar, but
actually owned by Fernando Banzon) when its right rear tire exploded causing it
to turn turtle. Plaintiff was thrown out of the vehicle and lost consciousness
upon landing on the ground. When he came back to his senses, he found that
he had a lacerated wound on his right palm, injuries on his left arm, right thigh
and on his back and also found this “Omega” wrist watch was lost. He went to
Danao city and upon arrival there he entered the City Hospital to attend to his
injuries and asked his father-in-law to go to site of the accident to look for his
watch but the watch was nowhere to be found.
- Petitioner then filed a civil case for breach of contract with damages before
the City Court of Cebu against Fontanar, Banzon, and Camoro, who filed their
answer, alleging that the accident was beyond their control taking into account
that the tire that exploded was newly bought and slightly used at the time it
blew up.
- City Court rendered judgment in favor of petitioner. The respondents then
appealed to the CFI of Cebu, which reversed the judgment upon a finding that
the accident in question was due to a fortuitous event. Petitioner’s MFR was
denied, hence this appeal.
ISSUES
1. WON the CFI erred in absolving the carrier from any liability upon a finding
that the tire blow out is a fortuitous event
2. WON the accident was due to a fortuitous event
HELD
1. YES
- The CFI relied on the ruling of the CA in Rodriguez v Red Line Transportation
Co., that “a tire blow-out does not constitute negligence unless the tire was
already old and should not have been used at all.” This conclusion is based on a
misapprehension of overall facts. In La Mallorca and Pampanga Bus Co. v De
Jesus, et al, We held that, “ not only are the rulings of the CA in Rodriguez v Red
Line Trans. Co. not binding on this Court but they were also based on
considerations quite different from those that obtain in the case at bar.” In the
case at bar, there are specific acts of negligence on the part of the respondents.
The records show that the passenger jeepney turned turtle and jumped into a
ditch immediately after its right rear tire exploded. The evidence shows that
the passenger jeepney was running at a very fast speed before the accident.
We agree with the observation of the petitioner that a public utility jeep
running at a regular and safe speed will not jump into a ditch when its right rear
tire blows up. There is also evidence to show that the passenger jeepney was
overloaded at the time of the accident. The petitioner stated that there were 3
passengers in the front seat and 14 in the rear.
- While it may be true that the tire that blew-up was still good because the
grooves of the tire were still visible, this fact alone does not make the explosion
of the tire a fortuitous event. No evidence was presented to show that the
accident was due to adverse road conditions or that precautions were taken by
the jeepney driver to compensate for any conditions liable to cause accidents.
The sudden blowing-up, therefore, could have been caused by too much air
pressure injected into the tire coupled by the fact that the jeepney was
overloaded and speeding at the time of the accident.
2. NO
Ratio A caso fortuito (fortuitous event) presents the following essential
characteristics:
1. The cause of the unforeseen and unexpected occurrence, or of the failure of
the debtor to comply with his obligation, must be independent of the human
will
2. It must be impossible to foresee the even which constitutes the caso fortuito,
or if it can be foreseen, it must be impossible to avoid
3. The occurrence must be such as to render it impossible for the debtor to
fulfill his obligation in a normal manner
4. The obligor (debtor) must be free from any participation in the aggravation
of the injury resulting to the creditor
Reasoning
- In the case at bar, the cause of the unforeseen and unexpected occurrence
was not independent of the human will. The accident was caused either
through the negligence of the driver or because of mechanical defects in the
tire. Common carriers should teach their drivers not to overload their vehicles
not to exceed safe and legal speed limits and to know the correct measures to
take when a tire blows up thus insuring the safety of passengers at all times.
- Relative to the contingency of mechanical defects, we held in Necesito, et al. v.
Paras, et al, that: “The preponderance of authority is in favor of the doctrine
that a passenger is entitled to recover damages from a carrier for an injury
resulting from a defect in an appliance purchased from a manufacturer,
whenever it appears that the defect would have been discovered by the carrier
if it had exercised the degree of care which under the circumstances was
incumbent upon it. with regard to inspection and application of the necessary
tests. For the purposes of this doctrine, the manufacturer is considered as
being in law the agent or servant of the carrier, as far as regards the work of
constructing the appliance. According to this theory, the good repute of the
manufacturer will not relieve the carrier from liability.
- It is sufficient to reiterate that the source of a common carrier's legal liability
is the contract of carriage, and by entering into the said contract, it binds itself
to carry the passengers safely as far as human care and foresight can provide,
using the utmost diligence of a very cautious person, with a due regard for all
the circumstances. The records show that this obligation was not met by the
respondents.
Disposition Decision appealed from is REVERSED and SET ASIDE. Decision of
City Court is REINSTATED
Natividad vs. Gabino, 36 Phil. 663
FACTS
PETITIONER: Emilio Natividad RESPONDENT: Basilia Gabino PONENTE: Torres, J.
On August 21, 1915, an order given by the judge of the Court of First Instance
arose from interpreting the true wishes of the testator, Salvador Y Reyes that
on accord to clause 6 of the testament, ownership and dominion of subject
property should be awarded to Basilia Gabino, subject to the reservation made
in behalf od Lorenzo Salvador and Emilio Natividad. Because of this, an
amendment was ordered to clarify the confusion on Clause 6 of the testament.
The original clause 6 was:
“I bequeath to Doña Basilia Gabino the ownership and dominion of the urban
property, consisting of a house and lot situated on Calle Lavezares of the said
district of San Nicolas and designated by No. 520, and in addition eleven meters
by two meters of the lot designated by No. 419, situated on Calle Madrid. This
portion shall be taken from that part of the lot which is adjacent to the rear of
said property No. 520. If the said legatee should die, Lorenzo Salvador shall be
obliged to deliver this house, together with the lot on which it stands, to my
grandson Emilio Natividad, upon payment by the latter to the former of the
sum of four thousand pesos (P4,000), Philippine currency.”
This case was filed by Emilio Natividad, the administrator of the estateof the
decedent, Tiburcio Salvador Y. Reyes as an appeal from the order upheld by the
CFI.
ISSUE/S
Whether the CFI erred in interpreting clause 6 of the testament
LAWS
Article 1181. In conditional obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the
happening of the event which constitutes the condition. (1114)
Suspensive Condition/Condition Precedent: Also know as condition
antecedent – a condition that rules an obligation as non-existent should an
event NOT take place.
The event is considered future and uncertain. If this event does not happen,
the parties will stand as if the conditional obligation never existed;
Resolutory Condition/Condition Subsequent: A condition that extinguishes
rights and obligations already existing; The rights and obligations are already
existing but are under threat of extinction upon the happening or fulfillment of
the resolutory condition.
A “but, if” condition:
e.g #1: Piece of land given with a resolutory cause that it be used as a park, if a
park
is not constructed then entitles the donor to revoke the obligation. e.g #2:
propter nuptias
e.g #3: reserva troncal
No. The CFI did not err with their ruling. The condition imposed by the testator
in the double legacy mentioned depends upon the happening of the event
constituting the condition, to wit, the death of the legatee Basilia Gabino, a
perfectly legal condition according to article 1114 of the Civil code, as it is not
impossible of performance and is not contrary to law or public morals, as
provided in article 1116 of said code.
The moment the legatee Gabino dies the other legatee, Lorenzo Salvador, is
obliged to deliver the property to the heir Emilio Natividad who, in his turn and
in exchange, must pay the legatee Salvador the sum of P4,000, thereby fulfilling
the double legacy contained in the said sixth clause of the will, the first of these
legacies being the voluntary reservation to Basilia Gabino of the ownership of
the said house, and the second, the conditional legacy of P4,000 to Lorenzo
Salvador.
If the provisions of article 675 of the Civil Code are to be complied with, it
cannot be understood that the testator meant to bequeath to Basilia Gabino
the mere usufruct of the property, inasmuch as, by unmistakable language
employed in the said sixth clause, he bequeathed her the ownership or
dominion of the said property — language which expresses without the
slightest doubt his wishes which should be complied with literally, because it is
constant rule or jurisprudence that in matters of last wills and testaments the
testator's will is the law.
Also, both conditions set forth by the testator are not contrary to law or public
morals.
The August 21 Ruling was affirmed, with costs against the appellant.
Visayan Sawmill v. CA (1993)
FACTS:
1.) On May 1, 1983 – RJH Trading and Visayan Sawmill Company (VSC)
entered into a Purchase and Sale of Scrap Iron located at VSC’s
stockyard at Negros Oriental, subject to the condition that RJH will
open a Letter of Credit (LOC) of P250,000 in favor of VSC on or
before May 15, 1983.
2.) On May 17, 1983, RJH through his men started to dig and gather and
scrap iron at the VSC's premises, proceeding until May 30 when VSC
allegedly directed RJH's men to desist from pursuing the work in
view of an alleged case filed against RJH by Alberto Pursuelo.
3.) VSC denies this, alleging that on May 23, 1983, they sent a
telegram to RJH canceling the contract of sale because of the
failure of the latter to comply with the conditions thereof.
4.) On May 24, 1983, RJH informed VSC that the LOC was opened May
12, 1983 at BPI main office in Ayala, but the transmittal was
delayed.
 5.) On May 26, 1983, VSC received a letter advice from BPI Dumaguete
stating that an irrevocable domestic LOC P250,000 was opened in
favor of Ang Tay c/o VSC on account of Armaco-Armsteel Alloy
Corporation.
6.) On July 19, 1983, RJH Trading sent a series of telegrams stating that
the case filed against him by Pursuelo had been dismissed and
demanding that VSC comply with the deed of sale, otherwise a case
will be filed against them.
7.) On July 20, 1983, VSC informed RJH that they were unwilling to
continue with the sale due to RJH's failure to comply with essential
pre-conditions of the contract.
8.) On July 29, 1983, RJH filed the complaint, praying for judgment
ordering VSC to comply with the contract by delivering to him the
scrap iron subject thereof; he further sought actual, moral and
exemplary damages, attorney's fees and the costs of the suit.
9.) VSC insisted that the cancellation of the contract was justified
because of RJH’s noncompliance with essential pre-conditions,
among which is the opening of an irrevocable and unconditional LOC
not later than 15 May 1983.
10.) RTC ruled in RJH’s favor, awarding the damages sought.
11.) CA affirmed, holding:
- VSC argued that under Articles 1593 and 1597 of the Civil
Code, automatic rescission may take place by a mere
notice to the buyer if the latter committed a breach of
the contract of sale. Even if one were to grant that there
was a breach of the contract by the buyer, automatic
rescission cannot take place because delivery had already
been made. And, in cases where there has already been
delivery, the intervention of the court is necessary to
annul the contract.
- Rescission in cases falling under Article 1191 of the Civil
Code is always subject to review by the courts and
cannot be considered final. In this, the trial court ruled
that rescission is improper because the breach was very
slight and the delay in opening the LOC was only 11 days.
12.) Hence, the appeal to SC by VSC.
ISSUES:
 WON VSC properly rescinded the contract
o YES. What obtains in this case is a mere contract to sell or
promise to sell, and not a contract of sale.
o The RTC assumed that the transaction is a contract of sale
and, influenced by its view that there was an "implied
delivery" of the object of the agreement, concluded that
A1593, NCC was inapplicable. It ruled that rescission
under A1191, NCC could only be done judicially. It further
classified the breach committed by the private
respondent as slight or casual, foreclosing, thereby, VSC’s
right to rescind the agreement.
 "ART. 1593. With respect to movable property,
the rescission of the sale shall of right take
place in the interest of the vendor, if the
vendee, upon the expiration of the period
fixed for the delivery of the thing, should not
have appeared to receive it, or, having
appeared, he should not have tendered the
price at the same time, unless a longer period
has been stipulated for its payment."
o Sustaining RTC, CA cited A1497: “The thing sold shall be
understood as delivered, when it is placed in the control
and possession of the vendee."
o VSC's obligation to sell is unequivocally subject to a positive
suspensive condition, i.e., RJH’s opening, making or
indorsing of an irrevocable and unconditional LOC. VSC
agreed to deliver the scrap iron only upon payment of
the purchase price by means of an irrevocable and
unconditional LOC. Otherwise stated, the contract is not
one of sale where the buyer acquired ownership over
the property subject to the resolutory condition that
the purchase price would be paid after delivery. Thus,
there was to be no actual sale until the opening, making
or indorsing of the irrevocable and unconditional LOC.
Since what obtains here is a mere promise to sell, RJH’s
failure to comply with the positive suspensive condition
cannot even be considered a breach casual or serious
but simply an event that prevented the obligation of
petitioner corporation to convey title from acquiring
binding force.
o Not only did RJH fail to open, make or indorse an
irrevocable and unconditional LOC on or before 15 May
1983 despite his earlier representation in his 24 May
1983 telegram that he had opened one on 12 May 1983,
the letter of advice VSC received on 26 May 1983 from
BPI Dumaguete City branch explicitly makes reference to
the opening on that date of a LOC in favor of petitioner
Ang Tay c/o Visayan Sawmill Co. Inc., drawn without
recourse on ARMACOMARSTEEL ALLOY CORPORATION
and set to expire on 24 July 1983, which is indisputably
not in accordance with the stipulation in the contract
signed by the parties on at least three (3) counts: (1) it
was not opened, made or indorsed by RJH, but by a
corporation which is not a party to the contract; (2) it
was not opened with the bank agreed upon; and (3) it is
not irrevocable and unconditional, for it is without
recourse, it is set to expire on a specific date and it
stipulates certain conditions with respect to shipment.
In all probability, RJH may have sold the subject scrap
iron to ARMACOMARSTEEL, or otherwise assigned to it
the contract with VSC. RJH 's complaint fails to disclose
the sudden entry into the picture of this corporation.
o Consequently, the obligation of VSC to sell did not arise; it
therefore cannot be compelled by specific performance
to comply with its prestation. In short, A1191 does not
apply; on the contrary, pursuant to A1597, VSC may
totally rescind, as it did in this case, the contract.
 "ART. 1597. Where the goods have not been
delivered to the buyer, and the buyer has
repudiated the contract of sale, or has
manifested his inability to perform his
obligations, thereunder, or has committed a
breach thereof, the seller may totally rescind
the contract of sale by giving notice of his
election so to do to the buyer."
CENTRAL PHILIPPINE UNIVERSITY, petitioner,
vs.
COURT OF APPEALS, REMEDIOS FRANCO, FRANCISCO N. LOPEZ, CECILIA P.
VDA. DE LOPEZ, REDAN LOPEZ AND REMARENE LOPEZ, respondents.
FACTS:
1. CPU: (1939) Don Ramon Lopez Sr. executed a deed of donation
Conditions of the donation:
a) Land should be utilized exclusively for the establishment & use of medical
college.
b) College shall not sell transfer or convey to any 3rd party.
c) Land shall be called “Ramon Lopez Campus”
d) Income from that land shall be put in “Ramon Lopez Campus Fund” for
improvement of the facility.
2. HEIRS (LOPEZ): (1989) filed an action for annulment of donation,
reconveyance & damages:
 a) Non-compliance with the conditions.
b) Negotiation with the NHA to exchange the donated property with another
land.
*CPU argued: right to file action has prescribed Facts
no violation because did not use property
*Lower Court sided with LOPEZ HEIRS.

Petitioner and private respondent entered into an agreement into which
ISSUE:
 Petitioner bound himself to transfer his rights(shares of stocks) on
1. WON CPU failed to comply conditions given there was no fixed period? YES
 Timberlwealth Corp to private respondent
2. WON there is a need to fix the period for compliance of the condition? NO 
HELD:

RTC ILOILO DECISION REINSTATED That for and in consideration of the transfer of rights, Petitioner undertake to
CA DECISION MODIFIED pay Private Respondent subject to the condition that the application of
RECONVEYANCE TO LOPEZ HEIRS WITH COSTS Private Respondent for an additional area for forest concession be approved
by Bureau of Forestry
1. RESOLUTORY CONDITION: upon fulfillment, terminates an enforceable 
obligation.
a. Rights are lost once the condition is fulfilled.

b. Entitles parties to resort back to original positions. Private Respondent did not obtain the approval
c. Takes effect if either parties do not comply with his/her engagements (in 
which complaining party may sue for dissolution of contract with damages)
Held
2. ARTICLE 1181: CONDITIONAL OBLIGATIONS

Acquisition of rights, extinguishment/loss of acquired, shall depend on
When a contract is subject to a suspensive condition, its birth and effectivity
happening event that constitutes the condition.
a. Donating land to another on the condition that the latter would build upon can take place only if and when the event which constitutes the condition
the land a school is RESOLUTORY IN CONDITION. The donation had to be valid happens or is fulfilled. If the suspensive condition does not take place, the
before the fulfillment of the condition. If there was no fulfillment with the parties would stand as if the conditional obligation had never existed.
condition such as what obtains in the instant case, the donation may be 
revoked and all rights the donee may have acquired shall be lost and

extinguished.
Art. 1461 of the Civil Code, the efficacy of the sale of a mere hope or
b. More than a reasonable period of fifty (50) years has already been allowed
petitioner to avail of the opportunity to comply with the condition even if it be expectancy is deemed subject to the condition that the thing will come into
burdensome, to make the donation in its favor forever valid. But, existence
unfortunately, it failed to do so. Hence, there is no more need to fix the 
duration of a term of the obligation when such procedure would be a mere
technicality and formality and would serve no purpose than to delay or lead to
an unnecessary and expensive multiplication of suits.
c. Petitioner has slept on its obligation for an unreasonable length of time.
Hence, it is only just and equitable now to declare the subject donation already
ineffective and, for all purposes, revoked so that petitioner as donee should
now return the donated property to the heirs of the donor, private
respondents herein, by means of reconveyance.
d. RECONVEYANCE: property held by a trustee/mortgage is returned to its
owner on his request.

3. ARTICLE 1197: OBLIGATIONS WITH NO FIXED PERIOD

GENERAL RULE: Period can be inferred from its nature or circumstances.
Court can fix the duration because the fulfillment of the obligation itself cannot
be demanded until after the court has fixed the period for compliance.
a. CASE AT HAND: General rule cannot be applied in this case considering the
different set of circumstances existing more than a reasonable period of 50
years has already been allowed to petitioner to avail of the opportunity to
comply but unfortunately, it failed to do so.
b. Hence, there is no need to fix a period when such procedure would be a
mere technicality & formality & would serve no purpose than to delay or load
to unnecessary and expensive multiplication of suits.

Javier vs. CA and Leonardo Tiro

183 SCRA 171
Art. 1181, Suspensive Condition

Issue

W/N an agreement may be nullified for non-performance of the conditions
stipulated therein