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(1) When the obligation or the law expressly so The terminologies in the contract being clear, leaving no
declare; or doubt as to the intention of the contracting parties, their
literal meaning control (Article 1370, Civil Code). The price
escalation cost must be deemed included in the final actual
(2) When from the nature and the circumstances of
project cost and petitioner held entitled to the payment of its
the obligation it appears that the designation of the
additional professional fees. Obligations arising from contract
time when the thing is to be delivered or the service
have the force of law between the contracting parties and
is to be rendered was a controlling motive for the
should be complied with in good faith (Article 1159, Civil
establishment of the contract; or
Code).
(3) When demand would be useless, as when the WHEREFORE, the ruling of respondent Commission on Audit
obligor has rendered it beyond his power to perform. is hereby SET ASIDE and respondent Philippine Tourism
Authority is hereby ordered to pay petitioner the additional
amount of P219,302.47 to complete the payment of its
In reciprocal obligations, neither party incurs in delay if the
professional fee under their Contract for Project Design and
other does not comply or is not ready to comply in a proper
Management Services.
manner with what is incumbent upon him. From the moment
one of the parties fulfills his obligation, delay by the other Agcaoili vs GSIS
begins.
Agcaoli after paying the first installment and other fees, From crop year 1957-1958 up to crop year 1967-1968, Gatuslao
having thereafter refused to make further payment of other has been milling all the sugarcane grown and produced with the
stipulated installments until GSIS had made the house Mill of BMMC.
habitable; and appellant having refused to do so, opting
From crop year 1920-21 to crop year 1967-68, the canes of
instead to cancel the award and demanded the vacation by
planters adhered to the mill of BMMC were transported from the
Agcaoli of the premises; and the latter having sued the GSIS plantation to the mill by means of cane cars and through railway
in the Court of First Instance of Manila for specific system operated by BMMC.
performance with damages and having obtained a favorable
judgment, the cases was appealed by the GSIS. BMMC has been hauling planter Gatuslao’s sugar cane to its mill or
factory continuously until crop year 1967 – 1968.
Issue: Whether or not Agcaoli is entitled for specific
performance with damages. The milling contract between BMMC and owners of the hacienda
Helvetica expired at the end of the 1964-1965 crop year.
Since GSIS failed to fulfill its obligation, and was not willing to Issue/s:
put the house in a habitable state, it cannot invoke Agcaoli’s
suspension of payment as cause to cancel the contract
1. Whether or not the termination of petitioner’s right of way
between them. In recipient obligation, neither party incur in over the hacienda Helvetica caused by the expiration of its
delay of the other does not comply or is not ready to comply amended milling contracts with the landowners of the land in
in a proper manner with what is incumbent upon him. Nor question is fortuitous event or force majeure which will
exempt petitioner BMMC from fulfillment of its contractual
may the GSIS succeed in justifying its cancellation of the
obligation.
award by the claim tha Agcaoli had not complied with the 2. Whether or not BMMC was able to provide adequate and
condition of occupying the house within three (3) days. The efficient transportation facilities of the canes of Gatuslao and
the other planters milling with BMMC during the crop year
record shows that Agcaoli did try to fulfill the condition.
1968-69.
2. No, BMMC failed to provide adequate transportation facilities 2. Whether Globe is liable to pay rentals under the Agreement
to Gatuslao and other adherent parties. for the month of December 1992.
Philcomsat v. Globe Telecom429 SCRA 153, As a consequence of the termination of the RP-US Military
Base Agreement the continued stay of all US Military forces
and personnel from Subic Naval Base would no longer be
Facts: Globe Telecom, Inc. (Globe) is engaged in the coordination allowed, hence, plaintiff would no longer be in any position to
of the provision of various communication facilities for the military render service it was obligated under the Agreement.
bases of the United States of America (US) in the Clark Air Base
and Subic Naval Base.
Events made impossible the continuation of the Agreement
Saud communication facilities were installed and configured for until the end of its five-year term without fault on the part of
the exclusive use of the US Defense Communications Agency either party. Such fortuitous events rendered Globe exempt
(USDCA). from payment of rentals for the remainder of the term of the
Agreement.
Globe contracted Philippine Communications Satellite Corporation
(Philcomsat) for the provision of the communication facilities.
Philcomsat would like to charge globe rentals for the balance
of the lease term without being any corresponding
Philcomsat and Globe entered into an agreement whereby telecommunications service subject of the lease. It will be
Philcomsat obliged itself to establish, operate and provide an IBS grossly unfair and iniquitous to hold globe liable for lease
Standard B earth station (earth station) for the exclusive use of charges for a service that was not and could not have been
the USDCA. Globe promised to pay Philcomsat monthly rentals for rendered due to an act of the government which was clearly
each leased circuit involved. beyond globes control.
PH government sent a Note Verbale to the US government 3. No. The award of attorney’s fees is the exemption rather than
through the US Embassy, notifying it of the Philippine termination the rule. In cases where both parties have legitimate claims
of the RP-US Military Base Agreement. The withdrawal of all US against each other and no party actually prevailed, such as in
military forces from Subic Naval Base should be completed by the present case where the claims of both parties were
December 31. 1992. sustained in part, an award of attorney’s fees would not be
warranted.
Globe notified Philcomsat of its intention to discontinue the use of
the earth station.
Exemplary damages may be awarded in cases involving
contracts, if the erring party acted in wanton, fraudulent,
Philcomsat demand payment of rentals for the balance of lease reckless, oppressive or malevolent manner. It was not shown
term, despite the non-use of earth station. that Globe acted wantonly or oppressively in not heeding
Philcomsats demands for payment of rentals. Globe had valid 1. event is independent of the will of obligor
grounds for refusing to comply with its contractual obligations 2. it must either be unforeseeable or unavoidable
after 1992. 3. occurrence must render it impossible for the debtor
to fulfill the obligation in a normal matter
4. the obligor is free of participation in injury to
Luzon Stevedoring vs Republic creditor.
REQUISITES OF FORTUITOUS EVENT:
Facts: Barge owned by Luzon Stevedoring Corporation(defendant,
1. Independent of the human will (or at least of the
LSC for brevity) was being towed down the Pasig river by tugboats
obligor’s)
belonging to the same corporation.`The barge rammed against
2. Unforeseen or unavoidable
one of the wooden piles of the Nagtahan Bailey Bridge, smashing
the posts and causing the bright to list. The river, at that time, 3. Of such character as to render it impossible for
was swollen and the current swift, on account of the heavy the obligor to comply with his obligation in a
downpour of Manila and the surrounding provinces. Republic of normal manner
the Philippines (PH) sued LSC for actual and consequential 4. Obligor – free from any
damages caused by its employees. participation/aggravation of the injury to the
obligee (no negligence or imprudence)
EXEPTIONS:
Issue: Whether or not the collision of LSC’s barge with the
supports or piers of the Nagtahan bridge was in law caused by 1. When it is expressly stipulated that he shall be liable
fortuitous event or force majeure.
even if non-performance of the obligation is due to
fortuitous events;
Held: No. Considering that the Nagtahan bridge was an 2. When the nature of the obligation requires the
immovable and stationary object and uncontrovertibly provided assumption of risk;
with adequate openings for the passage of water craft, including 3. When the obligor is in delay;
barges like of NSC’s, it is undeniable that the unusual event that 4. When the obligor has promised the same thing to
the barge, exclusively controlled by appellant, rammed the bridge two or more persons who do not have the same
supports raises a presumption of negligence on the part of interest;
appellant or its employees manning the barge or the tugs that 5. When the possessor is in bad faith and the thing lost
towed it. For in the ordinary course of events, such a thing does or deteriorated due to fortuitous event;
not happen if proper case is used. Res ipsa loquitur. 6. When the obligor contributed to the loss of the thing.
NLS stresses the precautions (due diligence) taken by it: (1) that 1161. Civil obligations arising from criminal offenses
it assigned two of its most powerful tugboats to tow down river its shall be governed by the penal laws, subject to the
barge, and (2) that it assigned to the task the more competent provisions of Article 2177, and of the pertinent
and experienced among its patrons, (3) had the towlines, engines provisions of Chapter 2, Preliminary in Human
and equipment double-checked and inspected; (4) that it Relations, and of Title 18 of this book, regulating
instructed its patrons to take extra precautions. These very damages.
precautions, completely destroy the NLS’defense.
Governing rules:
Caso fortuito or force majeure by definition, are extraordinary
events not foreseeable or avoidable, events that could not be 1. Pertinent provisions of the RPC and other penal laws
foreseen, or which, though foreseen, were inevitable.” It is, subject to Art 2177 Civil Code
therefore, not enough that the event should not have been [Art 100, RPC – Every person criminally liable for a felony is
foreseen or anticipated, as is commonly believed, but it must be also civilly liable]
one impossible to foresee or to avoid. The more difficulty to
foresee the happening is not impossibility to foresee the same. 2. Chapter 2, Preliminary title, on Human Relations (
The very measures adopted by NSC prove that the possibility of Civil Code )
danger was not only foreseeable, but actually foreseen, and was 3. Title 18 of Book IV of the Civil Code – on damages
not caso fortuito.