Full Text:

[G.R. NO. 158086 : February 14, 2008]

ASJ CORPORATION and ANTONIO SAN JUAN, Petitioners, v. SPS. EFREN & MAURA EVANGELISTA, Respondents.
DECISION
QUISUMBING, J.:
For review on certiorari is the Decision1 dated April 30, 2003 of the Court of Appeals in CA-G.R. CV No. 56082, which had affirmed
the Decision2 dated July 8, 1996 of the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 9 in Civil Case No. 745-M-93. The
Court of Appeals, after applying the doctrine of piercing the veil of corporate fiction, held petitioners ASJ Corporation (ASJ Corp.)
and Antonio San Juan solidarily liable to respondents Efren and Maura Evangelista for the unjustified retention of the chicks and
egg by-products covered by Setting Report Nos. 108 to 113.3
The pertinent facts, as found by the RTC and the Court of Appeals, are as follows:
Respondents, under the name and style of R.M. Sy Chicks, are engaged in the large-scale business of buying broiler eggs,
hatching them, and selling their hatchlings (chicks) and egg by-products4 in Bulacan and Nueva Ecija. For the incubation and
hatching of these eggs, respondents availed of the hatchery services of ASJ Corp., a corporation duly registered in the name of
San Juan and his family.
Sometime in 1991, respondents delivered to petitioners various quantities of eggs at an agreed service fee of 80 centavos per
egg, whether successfully hatched or not. Each delivery was reflected in a "Setting Report" indicating the following: the number
of eggs delivered; the date of setting or the date the eggs were delivered and laid out in the incubators; the date of candling or
the date the eggs, through a lighting system, were inspected and determined if viable or capable of being hatched into chicks;
and the date of hatching, which is also the date respondents would pick-up the chicks and by-products. Initially, the service fees
were paid upon release of the eggs and by-products to respondents. But as their business went along, respondents' delays on
their payments were tolerated by San Juan, who just carried over the balance, as there may be, into the next delivery, out of
keeping goodwill with respondents.
From January 13 to February 3, 1993, respondents had delivered to San Juan a total of 101,3[50] 5 eggs, detailed as follows:6
Date Set SR Number No. of eggs delivered Date hatched/
Pick-up date
1/13/1993 SR 108 32,566 eggs February 3, 1993
1/20/1993 SR 109 21,485 eggs February 10, 1993
1/22/1993 SR 110 7,213 eggs February 12, 1993
1/28/1993 SR 111 14,495 eggs February 18, 1993
1/30/1993 SR 112 15,346 eggs February 20, 1993
2/3/1993 SR 113 10,24[5]7 eggs February 24, 1993
TOTAL 101,350 eggs
On February 3, 1993, respondent Efren went to the hatchery to pick up the chicks and by-products covered by Setting Report No.
108, but San Juan refused to release the same due to respondents' failure to settle accrued service fees on several setting reports
starting from Setting Report No. 90. Nevertheless, San Juan accepted from Efren 10,245 eggs covered by Setting Report No. 113
and P15,000.008 in cash as partial payment for the accrued service fees.
On February 10, 1993, Efren returned to the hatchery to pick up the chicks and by-products covered by Setting Report No. 109,
but San Juan again refused to release the same unless respondents fully settle their accounts. In the afternoon of the same day,
respondent Maura, with her son Anselmo, tendered P15,000.009 to San Juan, and tried to claim the chicks and by-products. She
explained that she was unable to pay their balance because she was hospitalized for an undisclosed ailment. San Juan accepted
the P15,000.00, but insisted on the full settlement of respondents' accounts before releasing the chicks and by-products.
Believing firmly that the total value of the eggs delivered was more than sufficient to cover the outstanding balance, Maura
promised to settle their accounts only upon proper accounting by San Juan. San Juan disliked the idea and threatened to impound
their vehicle and detain them at the hatchery compound if they should come back unprepared to fully settle their accounts with
him.
On February 11, 1993, respondents directed their errand boy, Allan Blanco, to pick up the chicks and by-products covered by
Setting Report No. 110 and also to ascertain if San Juan was still willing to settle amicably their differences. Unfortunately, San
Juan was firm in his refusal and reiterated his threats on respondents. Fearing San Juan's threats, respondents never went back
to the hatchery.
The parties tried to settle amicably their differences before police authorities, but to no avail. Thus, respondents filed with the
RTC an action for damages based on petitioners' retention of the chicks and by-products covered by Setting Report Nos. 108 to
113.
On July 8, 1996, the RTC ruled in favor of respondents and made the following findings: (1) as of Setting Report No. 107,
respondents owed petitioners P102,336.80;10 (2) petitioners withheld the release of the chicks and by-products covered by
Setting Report Nos. 108-113;11 and (3) the retention of the chicks and by-products was unjustified and accompanied by threats
and intimidations on respondents.12 The RTC disregarded the corporate fiction of ASJ Corp.,13 and held it and San Juan solidarily
liable to respondents for P529,644.80 as actual damages, P100,000.00 as moral damages, P50,000.00 as attorney's fees, plus
interests and costs of suit. The decretal portion of the decision reads:
WHEREFORE, based on the evidence on record and the laws/jurisprudence applicable thereon, judgment is hereby rendered
ordering the defendants to pay, jointly and severally, unto the plaintiffs the amounts of P529,644.80, representing the value of
the hatched chicks and by-products which the plaintiffs on the average expected to derive under Setting Reports Nos. 108 to 113,
inclusive, with legal interest thereon from the date of this judgment until the same shall have been fully paid, P100,000.00 as
moral damages and P50,000.00 as attorney's fees, plus the costs of suit.
SO ORDERED.14
Both parties appealed to the Court of Appeals. Respondents prayed for an additional award of P76,139.00 as actual damages for
the cost of other unreturned by-products and P1,727,687.52 as unrealized profits, while petitioners prayed for the reversal of the
trial court's entire decision.
On April 30, 2003, the Court of Appeals denied both appeals for lack of merit and affirmed the trial court's decision, with the
slight modification of including an award of exemplary damages of P10,000.00 in favor of respondents. The Court of Appeals,
applying the doctrine of piercing the veil of corporate fiction, considered ASJ Corp. and San Juan as one entity, after finding that
there was no bona fide intention to treat the corporation as separate and distinct from San Juan and his wife Iluminada.
The fallo of the Court of Appeals' decision reads:
WHEREFORE, in view of the foregoing, the Decision appealed from is hereby AFFIRMED, with the slight modification that
exemplary damages in the amount of P10,000.00 are awarded to plaintiffs.
Costs against defendants.
SO ORDERED.15
Hence, the instant petition, assigning the following errors:
I.
THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN HOLDING, AS DID THE COURT A QUO, THAT PETITIONERS
WITHHELD/OR FAILED TO RELEASE THE CHICKS AND BY-PRODUCTS COVERED BY SETTING REPORT NOS. 108 AND 109.
II.
THE HONORABLE COURT OF APPEALS ERRED IN ADMITTING THE HEARSAY TESTIMONY OF MAURA EVANGELISTA SUPPORTIVE
OF ITS FINDINGS THAT PETITIONERS WITHHELD/OR FAILED TO RELEASE THE CHICKS AND BY-PRODUCTS COVERED BY
SETTING REPORT NOS. 108 AND 109.
III.
THE HONORABLE COURT OF APPEALS, AS DID THE COURT A QUO, ERRED IN NOT FINDING THAT RESPONDENTS FAILED TO
RETURN TO THE PLANT TO GET THE CHICKS AND BY-PRODUCTS COVERED BY SETTING REPORT NOS. 110, 111, 112 AND 113.
IV.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING, AS DID THE COURT A QUO, THAT THE PIERCING OF THE VEIL OF
CORPORATE ENTITY IS JUSTIFIED, AND CONSEQUENTLY HOLDING PETITIONERS JOINTLY AND SEVERALLY LIABLE TO PAY
RESPONDENTS THE SUM OF P529,644.[80].
V.
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONERS HAVE VIOLATED THE PRINCIPLES ENUNCIATED IN
ART. 19 OF THE NEW CIVIL CODE AND CONSEQUENTLY IN AWARDING MORAL DAMAGES, EXEMPLARY DAMAGES AND
ATTORNEY'S FEES.
VI.
THE HONORABLE COURT OF APPEALS ERRED IN NOT AWARDING PETITIONERS' COUNTERCLAIM.16
Plainly, the issues submitted for resolution are: First, did the Court of Appeals err when (a) it ruled that petitioners withheld or
failed to release the chicks and by-products covered by Setting Report Nos. 108 and 109; (b) it admitted the testimony of Maura;
(c) it did not find that it was respondents who failed to return to the hatchery to pick up the chicks and by-products covered by
Setting Report Nos. 110 to 113; and (d) it pierced the veil of corporate fiction and held ASJ Corp. and Antonio San Juan as one
entity? Second, was it proper to hold petitioners solidarily liable to respondents for the payment of P529,644.80 and other
damages?cralawred
In our view, there are two sets of issues that the petitioners have raised.
The first set is factual. Petitioners seek to establish a set of facts contrary to the factual findings of the trial and appellate courts.
However, as well established in our jurisprudence, only errors of law are reviewable by this Court in a Petition for Review under
Rule 45.17 The trial court, having had the opportunity to personally observe and analyze the demeanor of the witnesses while
testifying, is in a better position to pass judgment on their credibility.18 More importantly, factual findings of the trial court, when
amply supported by evidence on record and affirmed by the appellate court, are binding upon this Court and will not be disturbed
on appeal.19 While there are exceptional circumstances20 when these findings may be set aside, none of them is present in this
case.
Based on the records, as well as the parties' own admissions, the following facts were uncontroverted: (1) As of Setting Report
No. 107, respondents were indebted to petitioners for P102,336.80 as accrued service fees for Setting Report Nos. 90 to
107;21 (2) Petitioners, based on San Juan's own admission,22 did not release the chicks and by-products covered by Setting
Report Nos. 108 and 109 for failure of respondents to fully settle their previous accounts; and (3) Due to San Juan's threats,
respondents never returned to the hatchery to pick up those covered by Setting Report Nos. 110 to 113.23
Furthermore, although no hard and fast rule can be accurately laid down under which the juridical personality of a corporate
entity may be disregarded, the following probative factors of identity justify the application of the doctrine of piercing the veil of
corporate fiction24 in this case: (1) San Juan and his wife own the bulk of shares of ASJ Corp.; (2) The lot where the hatchery
plant is located is owned by the San Juan spouses; (3) ASJ Corp. had no other properties or assets, except for the hatchery plant
and the lot where it is located; (4) San Juan is in complete control of the corporation; (5) There is no bona fide intention to treat
ASJ Corp. as a different entity from San Juan; and (6) The corporate fiction of ASJ Corp. was used by San Juan to insulate himself
from the legitimate claims of respondents, defeat public convenience, justify wrong, defend crime, and evade a corporation's
subsidiary liability for damages.25 These findings, being purely one of fact,26 should be respected. We need not assess and
evaluate the evidence all over again where the findings of both courts on these matters coincide.
On the second set of issues, petitioners contend that the retention was justified and did not constitute an abuse of rights since it
was respondents who failed to comply with their obligation. Respondents, for their part, aver that all the elements on abuse of
rights were present. They further state that despite their offer to partially satisfy the accrued service fees, and the fact that the
value of the chicks and by-products was more than sufficient to cover their unpaid obligations, petitioners still chose to withhold
the delivery.
The crux of the controversy, in our considered view, is simple enough. Was petitioners' retention of the chicks and by-products on
account of respondents' failure to pay the corresponding service fees unjustified? While the trial and appellate courts had the
same decisions on the matter, suffice it to say that a modification is proper. Worth stressing, petitioners' act of withholding the
chicks and by-products is entirely different from petitioners' unjustifiable acts of threatening respondents. The retention had legal
basis; the threats had none.
To begin with, petitioners' obligation to deliver the chicks and by-products corresponds to three dates: the date of hatching, the
delivery/pick-up date and the date of respondents' payment. On several setting reports, respondents made delays on their
payments, but petitioners tolerated such delay. When respondents' accounts accumulated because of their successive failure to
pay on several setting reports, petitioners opted to demand the full settlement of respondents' accounts as a condition precedent
to the delivery. However, respondents were unable to fully settle their accounts.
Respondents' offer to partially satisfy their accounts is not enough to extinguish their obligation. Under Article 124827 of the Civil
Code, the creditor cannot be compelled to accept partial payments from the debtor, unless there is an express stipulation to that
effect. More so, respondents cannot substitute or apply as their payment the value of the chicks and by-products they expect to
derive because it is necessary that all the debts be for the same kind, generally of a monetary character. Needless to say, there
was no valid application of payment in this case.
Furthermore, it was respondents who violated the very essence of reciprocity in contracts, consequently giving rise to petitioners'
right of retention. This case is clearly one among the species of non-performance of a reciprocal obligation. Reciprocal obligations
are those which arise from the same cause, wherein each party is a debtor and a creditor of the other, such that the performance
of one is conditioned upon the simultaneous fulfillment of the other.28 From the moment one of the parties fulfills his obligation,
delay by the other party begins.29
Since respondents are guilty of delay in the performance of their obligations, they are liable to pay petitioners actual damages
of P183,416.80, computed as follows: From respondents' outstanding balance of P102,336.80, as of Setting Report No. 107, we
add the corresponding services fees of P81,080.0030 for Setting Report Nos. 108 to 113 which had remain unpaid.
Nonetheless, San Juan's subsequent acts of threatening respondents should not remain among those treated with impunity.
Under Article 1931 of the Civil Code, an act constitutes an abuse of right if the following elements are present: (a) the existence of
a legal right or duty; (b) which is exercised in bad faith; and (c) for the sole intent of prejudicing or injuring another.32 Here,
while petitioners had the right to withhold delivery, the high-handed and oppressive acts of petitioners, as aptly found by the two
courts below, had no legal leg to stand on. We need not weigh the corresponding pieces of evidence all over again because
factual findings of the trial court, when adopted and confirmed by the appellate court, are binding and conclusive and will not be
disturbed on appeal.33
Since it was established that respondents suffered some pecuniary loss anchored on petitioners' abuse of rights, although the
exact amount of actual damages cannot be ascertained, temperate damages are recoverable. In arriving at a reasonable level of
temperate damages of P408,852.10, which is equivalent to the value of the chicks and by-products, which respondents, on the
average, are expected to derive, this Court was guided by the following factors: (a) award of temperate damages will cover only
Setting Report Nos. 109 to 113 since the threats started only on February 10 and 11, 1993, which are the pick-up dates for
Setting Report Nos. 109 and 110; the rates of (b) 41% and (c) 17%, representing the average rates of conversion of broiler
eggs into hatched chicks and egg by-products as tabulated by the trial court based on available statistical data which was
unrebutted by petitioners; (d) 68,784 eggs,34 or the total number of broiler eggs under Setting Report Nos. 109 to 113;
and (e) P14.00 and (f) P1.20, or the then unit market price of the chicks and by-products, respectively.
Thus, the temperate damages of P408,852.10 is computed as follows:
[b X (d X e) + c X (d X f)] = Temperate Damages

41% X (68,784 eggs X P14) = P394,820.16

17% X (68,784 eggs X P1.20) = P 14,031.94

[P394,820.16 + P14,031.94] = P408,852.10

At bottom, we agree that petitioners' conduct flouts the norms of civil society and justifies the award of moral and exemplary
damages. As enshrined in civil law jurisprudence: Honeste vivere, non alterum laedere et jus suum cuique tribuere. To live
virtuously, not to injure others and to give everyone his due.35 Since exemplary damages are awarded, attorney's fees are also
proper. Article 2208 of the Civil Code provides that:
In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
xxx
WHEREFORE, the petition is PARTLY GRANTED. The Decision dated April 30, 2003 of the Court of Appeals in CA-G.R. CV No.
56082 is hereby MODIFIED as follows:
A. Respondents are ORDERED to pay petitioners P183,416.80 as actual damages, with interest of 6% from the date of filing of
the complaint until fully paid, plus legal interest of 12% from the finality of this decision until fully paid.
b. The award of actual damages of P529,644.80 in favor of respondents is hereby REDUCED to P408,852.10, with legal interest
of 12% from the date of finality of this judgment until fully paid.
c. The award of moral damages, exemplary damages and attorney's fees of P100,000.00, P10,000.00, P50,000.00, respectively,
in favor of respondents is hereby AFFIRMED.
d. All other claims are hereby DENIED.
No pronouncement as to costs.
SO ORDERED.

Case Digest:

ASJ Corporation and Antonio San Juan vs Spouses Efren and Maura Evangelista
G.R. No. 158086 Feb. 14, 2008
FACTS
This case is a petition for review on certiorari on the decision of the Court of Appeals affirming the decision of the Regional Trial Court of Malolos,
Bulacan Branch 9 in Civil Case No. 745-M-93.
Respondents Efren and Maura Evangelista are owners of R.M. Sy Chicks, a business engaged in selling chicks and egg by-products. For hatching
and incubation of eggs, they availed the services of ASJ Corp., owned by San Juan and his family.
After years of doing business with the ASJ Corp., the respondents delayed payments for the services of ASJ Corp, prompting owner San Juan to
refuse the release of the hatched egg. The respondents tendered Php 15,000 to San Juan for partial payment which San Juan accepted but he still
insisted on the full settlement of respondents’ accounts before releasing the chicks and by-products. He also threated the respondents that he would
impound their vehicle and detain them at the hatchery compound if they should come back unprepared to fully settle their accounts with him.
The parties tried to settle amicably before police authorities but failed. The respondents then filed with the RTC an action for damages based on the
retention of the chicks and by-products by the petitioners.
The RTC held ASJ Corp. and San Juan solidarily liable for the actual and moral damages and attorney’s fees. On appeal, the Court of Appeals
affirmed the decision and added exemplary damages. Hence, this petition.
ISSUE
Whether or not the petitioner’s retention of the chicks and by-products on account of respondents’ failure to pay the corresponding fees justified.
HELD
Yes. The retention has legal basis, although the threats had none. Under Article 1248 of the Civil Code, the creditor cannot be compelled to accept
partial payments from the debtor, unless there is an express stipulation to that effect. It was the respondents who violated the reciprocity in contracts,
hence, the petitioners have the right of retention. This case is a case on non-performance of reciprocal obligation.
Reciprocal obligations are those which arise from the same cause, wherein each party is a debtor and a creditor of the other such that the
performance of one is conditioned upon the simultaneous fulfillment of the other.
Since respondents are guilty of delay in the performance of their obligations, they are liable to pay petitioners actual damages.
The petition was partly granted. The respondents were ordered to pay petitioners for actual damages. The actual, exemplary and moral damages
laid down by the Court of Appeals were retained.

Full Text:

[G.R. No. L-56170. January 31, 1984.]

HILARIO JARAVATA, Petitioner, v. THE HON. SANDIGANBAYAN and THE PEOPLE OF THE PHILIPPINES, Respondents.

SYLLABUS

1. CRIMINAL LAW; ANTI-GRAFT AND CORRUPT PRACTICES ACT; SECTION 3 (b) THEREOF; OFFICIAL INTERVENTION BY PUBLIC
OFFICER MUST BE REQUIRED BY LAW; CASE AT BAR. — Section 3(b) of Republic Act No. 3019, refers to a public officer whose
official intervention is required by law in a contract or transaction. There is no law which invests the petitioner with the power to
intervene in the payment of the salary differentials of the complainants or anyone for that matter. Far from exercising any power,
the petitioner played the humble role of a supplicant whose mission was to expedite payment of the salary differentials. In his
official capacity as assistant principal, he is not required by law to intervene in the payment of the salary differentials.
Accordingly, he cannot be said to have violated the law afore-cited although he exerted efforts to facilitate the payment of the
salary differentials.

DECISION

ABAD SANTOS, J.:

This is a petition to review the decision of the Sandiganbayan in Criminal Case No. 873.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph

Hilario Jaravata was accused of violating Section 3(b) of Republic Act No. 3019, as amended, said to have been committed in the
following manner:jgc:chanrobles.com.ph

"That on or about the period from April 30, 1979 to May 25, 1979, in the Municipality of Tubao, Province of La Union, Philippines,
and within the jurisdiction of this Honorable Court, the abovenamed accused, being then the Assistant Principal of the Leones,
Tubao, La Union Barangay High School and with the use of his influence as such public official, and taking advantage of his moral
and official ascendancy over his classroom teachers, with deliberate intent did then and there wilfully, unlawfully and feloniously
made demand and actually received payments from other classroom teachers, ROMEO DACAYANAN, DOMINGO LOPEZ, MARCELA
BAUTISTA, and FRANCISCO DULAY various sums of money, namely: P118.00, P100.00, P50.00 and P70.00 out of their salary
differentials, in consideration of accused having officially intervened in the release of the salary differentials of the six classroom
teachers, to the prejudice and damage of the said classroom teachers, in the total amount of THREE HUNDRED THIRTY EIGHT
(P338.00) PESOS, Philippine Currency." (Decision, p.1-2.)

After trial, the Sandiganbayan rendered the following judgment:jgc:chanrobles.com.ph

"WHEREFORE, Accused is hereby found guilty beyond reasonable doubt for Violation of Section 3(b), Republic Act No. 3019, as
amended, and he is hereby sentenced to suffer an indeterminate imprisonment ranging from ONE (1) YEAR, as minimum, to
FOUR (4) YEARS, as maximum, to further suffer perpetual special disqualification from public office and to pay the costs.

"No pronouncement as to the civil liability it appearing that the money given to the accused was already refunded by him." (Id.,
pp. 16-17.)

The petition raises factual and legal issues but for obvious reasons Our decision shall deal with the legal issue only.

The Sandiganbayan states in its decision the following:jgc:chanrobles.com.ph

"A perusal of the conflicting versions of the prosecution and the defense shows that there is no dispute that [complainants]
Ramos, Lloren, Lopez, Dacayanan, Dulay and Bautista are classroom teachers of the Leones Barangay High School with accused
as their assistant principal and [Conrado] Baltazar as the administrator; that on January 5, 1979, Accused informed the classroom
teachers of the approval of the release of their salary differentials for 1978 and to facilitate its payment accused and the
classroom teachers agreed that accused follow-up the papers in Manila with the obligation on the part of the classroom teachers
to reimburse the accused of his expenses; that accused incurred expenses in the total amount of P220.00 and there being six
classroom teachers, he divided said amount by six or at the rate of P36.00 each; that the classroom teachers actually received
their salary differentials and pursuant to said agreement, they, with the exception of Lloren and Ramos, gave the accused varying
amounts but as Baltazar did not approve it, he ordered the accused to return the money given to him by Lopez, Dacayanan,
Dulay and Bautista, and accused complied." (Pp. 7-8.)

The decision also recites that "the evidence is overwhelming to show that accused received more than the rightful contribution of
P36.00 from four classroom teachers, namely: Lopez, Dulay, Dacayanan and Bautista. Lopez categorically declared that he gave
the accused P100.00 (TSN, p. 5, August 21, 1980 hearing) after he received his salary differential or an excess of P64.00. So with
Dulay, that he gave P70.00 to the accused (TSN, p. 16, supra) or an excess of P34.00; Dacayanan, that he gave to the accused
P118.00 (TSN, p. 26, supra) or an excess of P82.00, and Bautista, that he gave to the accused P50.00 (TSN, p. 38, supra) or an
excess of P14.00. In short, the total amount received by the accused in excess of the share of the classroom teachers in the
reimbursement of his expenses is P194.00." (P.9.)

Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act provides, inter alia, the
following:jgc:chanrobles.com.ph

"Sec. 3. Corrupt practices of public officers. — In addition to acts or omissions of public officers already penalized by existing law,
the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:chanrob1es virtual 1aw
library
x x x

(b) Directly or indirectly requesting or receiving any gift, present, share, percentage, or benefit, for himself or for any other
person in connection with any contract or transaction between the Government and any other party, wherein the public officer in
his official capacity has to intervene under the law.
x x x

The legal issue is whether or not, under the facts stated, petitioner Jaravata violated the above-quoted provision of the statute.

A simple reading of the provision has to yield a negative answer.

There is no question that Jaravata at the time material to the case was a "public officer" as defined by Section 2 of R.A. No. 3019,
i.e. "elective and appointive officials and employees, permanent or temporary, whether in the classified or unclassified or exempt
service receiving compensation, even nominal, from the government." It may also be said that any amount which Jaravata
received in excess of P36.00 from each of the complainants was in the concept of a gift or benefit. The pivotal question, however,
is whether Jaravata, an assistant principal of a high school in the boondocks of Tubao, La Union, "in his official capacity has to
intervene under the law" in the payment of the salary differentials for 1978 of the complainants. It should be noted that the
arrangement was "to facilitate its [salary differential] payment accused and the classroom teachers agreed that accused follow-up
the papers in Manila with the obligation on the part of the classroom teachers to reimburse the accused of his
expenses." chanrobles law library : red

In Our opinion, Sec. 3(b) of R.A. No. 3019, refers to a public officer whose official intervention is required by law in a contract or
transaction.

There is no law which invests the petitioner with the power to intervene in the payment of the salary differentials of the
complainants or anyone for that matter. Far from exercising any power, the petitioner played the humble role of a supplicant
whose mission was to expedite payment of the salary differentials. In his official capacity as assistant principal, he is not required
by law to intervene in the payment of the salary differentials. Accordingly, he cannot be said to have violated the law afore-cited
although he exerted efforts to facilitate the payment of the salary differentials.

WHEREFORE, the petition is hereby granted and the judgment of the Sandiganbayan convicting the petitioner is set aside. Costs
de oficio.

SO ORDERED.

Case Digest:

Jaravata vs. Sandiganbayan

G.R. No. L-56170 January 31, 1984
HILARIO JARAVATA petitioner,
vs.
THE HON. SANDIGANBAYAN and THE PEOPLE OF THE PHILIPPINES, respondents.
Franco L. Loyola and Sabas Cacananta for petitioner.
The Solicitor General for respondents.
ABAD SANTOS, J.:
FACTS
On or about the period from April 30, 1979 to May 25, 1979, in the Municipality of Tubao, Province of La Union, Philippines, and within the
jurisdiction of this Honorable Court, Hilario Jaravata, being then the Assistant Principal of the Leones Tubao, La Union Barangay High School and
with the use of his influence as such public official and taking advantage of his moral and official ascendancy over his classroom teachers, with
deliberate intent did then and there wilfully, unlawfully and feloniously made demand and actually received payments from other classroom teachers,
ROMEO DACAYANAN, DOMINGO LOPEZ, MARCELA BAUTISTA, and FRANCISCO DULAY various sums of money, namely: P118.00, P100.00,
P50.00 and P70.00 out of their salary differentials, in consideration of accused having officially intervened in the release of the salary differentials of
the six classroom teachers, to the prejudice and damage of the said classroom teachers, in the total amount of THREE HUNDRED THIRTY EIGHT
(P338.00) PESOS, Philippine Currency. (Decision, p.1-2.)
After trial, the Sandiganbayan rendered the following judgment:
WHEREFORE, accused is hereby found guilty beyond reasonable doubt for Violation of Section 3(b), Republic Act No. 3019, as amended, and he is
hereby sentenced to suffer an indeterminate imprisonment ranging from ONE (1) YEAR, is minimum, to FOUR (4) YEARS, as maximum, to further
suffer perpetual special disqualification from public office and to pay the costs.
No pronouncement as to the civil liability it appearing that the money given to the accused was already refunded by him. (Id. pp, 16-17.)
Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act provides, inter alia the following:
Sec. 3. Corrupt practices of public officers. — In addition to acts or omissions of public officers already penalized by existing law, the following shall
constitute corrupt practices of any public officer and are hereby declared to be unlawful:
xxx xxx xxx
(b) Directly or indirectly requesting or receiving any gift, present, share, percentage, or benefit, for himself or for any other person in connection with
any contract or transaction between the Government and any other party, wherein the public officer in his official capacity has to intervene under the
law.
xxx xxx xxx
ISSUE
The legal issue is whether or not, under the facts stated, petitioner Jaravata violated the above-quoted provision of the statute.
HELD
A simple reading of the provision has to yield a negative answer.
There is no question that Jaravata at the time material to the case was a “public officer” as defined by Section 2 of R.A. No. 3019, i.e. “elective and
appointive officials and employees, permanent or temporary, whether in the classified or unclassified or exempt service receiving compensation,
even normal from the government.” It may also be said that any amount which Jaravata received in excess of P36.00 from each of the complainants
was in the concept of a gift or benefit. The pivotal question, however, is whether Jaravata, an assistant principal of a high school in the boondocks of
Tubao, La Union, “in his official capacity has to intervene under the law” in the payment of the salary differentials for 1978 of the complainants. It
should be noted that the arrangement was “to facilitate its [salary differential] payment accused and the classroom teachers agreed that accused
follow-up the papers in Manila with the obligation on the part of the classroom teachers to reimburse the accused of his expenses.
There is no law which invests the petitioner with the power to intervene in the payment of the salary differentials of the complainants or anyone for
that matter. Far from exercising any power, the petitioner played the humble role of a supplicant whose mission was to expedite payment of the
salary differentials. In his official capacity as assistant principal he is not required by law to intervene in the payment of the salary differentials.
Accordingly, he cannot be said to have violated the law afore-cited although he exerted efforts to facilitate the payment of the salary differentials.

Full Text:

G.R. No. L-13660 November 13, 1918

E. M. BACHRACH, Plaintiff-Appellee, vs. VICENTE GOLINGCO, Defendant-Appellant.
STREET, J.:
This is a suit for the recovery of a sum of money claimed as a balance due to the plaintiff on a promissory note. From a judgment
in favor of the plaintiff for the sum of P8461, as principal, with interest thereon at the rate of 8 per cent per annum from the 10th
day of July, 1916, until paid, and for the further sum of P2,115.25, as a stipulated attorney's fee, the defendant has
appealed.chanroblesvirtualawlibrary chanrobles virtual law library
The note in question represents the purchase price of an automobile truck which the plaintiff sold to the defendant at the time the
note was executed. As security for the payment of said indebtedness, the plaintiff took a chattel mortgage on the truck; and after
the note had matured this chattel mortgage was foreclosed. At the foreclosure sale the plaintiff himself became the purchaser for
the sum of P539, which amount was credited upon the indebtedness.chanroblesvirtualawlibrary chanrobles virtual law library
Of the questions raised by the defense only two in our opinion require serious consideration. The first has reference to
irregularities in the foreclosure of the chattel mortgage; the second to the validity of the agreement for 25 per cent as an
attorney's fee for collection.chanroblesvirtualawlibrary chanrobles virtual law library
We find that the requirements of section 14 of Act No. 1508 (the Chattel Mortgage of Law) were not observed in the sale of the
truck. The irregularity consists in the fact the truck was brought by Bachrach from Albay (which was the place of residence of the
mortgagor) to the city of Manila and here sold by the sheriff of the city at the instance of the plaintiff. There is no evidence that
the mortgagor consented to the removal of the truck to Manila or to the sale that was effected in the city; and it must therefore
be held that the sale was improperly accomplished. The statute requires that the mortgage chattel shall be sold in the
municipality where the mortgagor resides, or where the property is situated; and the latter expression has reference to the place
where the thing is being kept for use by the mortgagor, not any place where the mortgagee may choose to carry it when he takes
it out of the custody of the mortgagor. It is admitted that notice of the same was not posted anywhere in the municipality of
Albay, as required in the section cited; and of course publication there would have of little or no value when the sale was to be
made in Manila.chanroblesvirtualawlibrary chanrobles virtual law library
The effect of this irregularity was, in our opinion, to make the plaintiff liable to the defendant for the full value of the truck at the
time the plaintiff thus carried it off to be sold; and of course the burden is on the defendant to prove the amount of the damage
to which he was thus subjected. With reference to the condition of the truck when it was sold, we find the following statement in
the testimony of Bachrach:
Q. What was the condition of the truck at the time it was sold? - At the time of the sale, everything that wasn't actually built on
the truck was removed; tires removed, generator, lamps, dynamo, everything that could be taken off with a monkeywrench was
removed. It was in a criminal condition.chanroblesvirtualawlibrary chanrobles virtual law library
Q. Was the body of the truck, or the chassis, and the motor on at the time you purchased it at the sheriff's sale? - A.
No.chanroblesvirtualawlibrary chanrobles virtual law library
Q. Had it been removed? - A. Yes. We had a telegram from the sheriff of Tabaco, saying that the day he was to load the truck for
Manila, he had a protest from Golingco demanding the body, and I telegraphed the sheriff to deliver the body to Golingco, and
send the truck.
There is no evidence to contradict Bachrach's testimony on this point; and we are bound to credit him when he states his
conclusion that the value of the truck at the time it was sold was the amount he paid for it. In the absence of proof to the
contrary this must also be taken to be its value at the time it was brought away from Albay. It results that the defendant has
failed to prove that he suffered any damage whatever by the irregular manner in which the sale was
conducted.chanroblesvirtualawlibrary chanrobles virtual law library
This brings us to the question of the amount of the attorney's fee allowed by the trial court. It is provided in the note given by the
defendant for the purchase price of the truck that, in the event it becoming necessary to employ counsel to enforce its collection,
the maker is to pay an additional twenty-five per cent "as fees for the attorney collecting the same." The trial court gave
judgment for the full amount due on the note and for an additional sum of P2,115.25, for attorney's fees. The appellant assigns
this as error and argues that the agreement to pay an attorney's fee, in addition to the principal and stipulated interest, is void as
usurious and as being grossly excessive.chanroblesvirtualawlibrary chanrobles virtual law library
We are of the opinion that it may lawfully be stipulated in favor of the creditor, whether the obligation be evidenced by
promissory note or otherwise, that in the event that it becomes necessary, by reason of the delinquency of the debtor, to employ
counsel to enforce payment of the obligation, a reasonable attorney's fee shall be paid by the debtor, in addition to the amount
due for principal and interest. The legality of such a stipulation, when annexed to a negotiate instrument is expressly recognized
by the Negotiable Instruments Law ((Act No. 2031, sec. 2, par. E). Inasmuch as the statutory allowance for attorney's fees, as
costs, is notoriously less than the amount which attorneys are entitled to receive from their clients, unless such a stipulation is
made and enforced, it follows that a creditor may be compelled to pay, out of the money due him, a considerable sum as the
necessary cost of enforcing payment by the delinquent debtor.chanroblesvirtualawlibrary chanrobles virtual law library
Such a stipulation is not void as usurious, even when added to a contract for the payment of the highest rate of interest
permissible. The purpose of such a stipulation is not to increase in any respect the benefits ultimately to accrue to the creditor. It
is true that such a stipulation may be made for the purpose of concealing usury; but that is a matter of proof to be determined in
each case upon the evidence.chanroblesvirtualawlibrary chanrobles virtual law library
We cite, with approval, the ruling of the supreme court of Georgia upon this question, as follows:
A contract to pay attorney's fees for collecting, in addition to principal and interest, is not, on its face, usurious; nor does it
become usurious by reducing the debt to judgment, and including in the judgment ten per cent for attorney's
fees.chanroblesvirtualawlibrary chanrobles virtual law library
The law . . . recognizes the validity of such a stipulation, and it meets the justice of the case very frequently for the debtor to pay
for the collection rather than the creditor, . . . We do not mean to intimate that usury might not be covered up by such a
stipulation, that it might not be a disguise, or contrivance for the concealment of usury; but there is no such indication in this
case. There is no evidence that it was not a bona fide stipulation to cover the contingency of having to incur expense in collecting
this debt. (National bank of Athens vs. Danforth, 80 Ga., 55.)
But the principle that it may be lawfully stipulated that the legal expense involved in the collection of a debt shall be defrayed by
the debtor does not imply that such stipulations must be enforced in accordance with their terms, no matter how injurious or
oppressive they may be. The lawful purpose to be accomplished by such a stipulation is to permit the creditor to receive the
whole amount due him under his contract without the deduction of the expenses caused by the delinquency of the debtor. It
should not be permitted for him to convert such a stipulation into a source of speculative profit at the expense of the
debtor.chanroblesvirtualawlibrary chanrobles virtual law library
Contracts for attorney's services in this jurisdiction stand upon an entirely different footing from contracts for the payment of
compensation for any other services. By the express provision of section 29 of the Code of Civil Procedure, an attorney is not
entitled in the absence of express contract to recover more than a reasonable compensation for his services; and even where an
express contract is made the court can ignore it and limit the recovery to reasonable compensation if the amount of the stipulated
fee is found by the court to be unreasonable. This is a very different rule from that announced in section 1091 of the Civil Code
with reference to the obligation of contract in general, where it is said that such obligation has the force of law between the
contracting parties. Had the plaintiff herein made an express contract to pay his attorney an uncontingent fee of P2,115.25, for
the services to be rendered in reducing the note here in suit to judgment, it would not have been enforceable against him had he
seen fit to oppose it, as such a fee is obviously far greater than is necessary to remunerate the attorney for the work involved and
is therefore unreasonable. In order to enable the court to ignore an express contract for an attorney's fees, it is not necessary to
show, as in other contracts, that it is contrary to morality or public policy (art. 1255, Civil Code). It is enough that it is
unreasonable or unconscionable.chanroblesvirtualawlibrary chanrobles virtual law library
We are not unmindful of the fact that the question as to the propriety of the stipulation for attorney's fee does not here arise
directly between the creditor in this note and the attorney into whose hands he might place the note for collection. The stipulation
is contained in the contract between the creditor and his debtor; and the attorney could not be held bound thereby. Nevertheless
we think the same rule applies as if the question had arisen directly between attorney and client. As the court has power to fix
the fee as between the attorney and the client, it must necessarily have the right to say whether a stipulation, like this, inserted
in a promissory note is valid. A different ruling, as may be readily seen, would make it exceedingly easy to evade the usury laws.
As stated at the beginning of this discussion, the lawful purpose to be accomplished by such stipulation is to permit the creditor to
receive the amount due without the deduction of the expenses caused by the delinquency of the debtor. It must not be used as a
cloak for an exorbitant exaction.virtual law library
We are therefore of the opinion that we are authorized to reduce the amount in question to a sum which will enable the plaintiff
to pay a reasonable compensation to his attorney; and we think that P800 is sufficient for this purpose. It is possible that, as a
matter of fact, the plaintiff may have contracted with his attorney for the performances of the services to be rendered him in this
matter for a sum less than P800, and had it been so made to appear, we would have reduced the amount recoverable, under this
particular clause of the note, to the corresponding sum. No evidence having been adduced upon this point, however, we are
compelled to exercise our discretion and make use of our professional knowledge as to the reasonable compensation to which an
attorney would be entitled for the performance of such services as those which the plaintiff in this case has had occasion to
require from his counsel.
 Wherefore it is ordered that the plaintiff have and recover of the defendant the sum of P8,461, with interest thereon at the rate of
8 per centum per annum, from the tenth day of July, 1916, until paid, and for the further sum of P800 as attorney's fees, and for
the statutory costs of both instances, exclusive of the statutory allowance for attorney's fees. So ordered.

Case Digest:
Bachrach vs. Golingco
Case Digest
G.R. No. L-13660 November 13, 1918
1. M. BACHRACH,plaintiff-appellee,
vs.
VICENTE GOLINGCO, defendant-appellant.
STREET, J.:

Facts: Bachrach entered into a contract with Golingco, he sold a truck with the latter which was secured by a promissory note and a chattel
mortgage on the truck. The promissory note provided that there would be payment of 25% attorney’s fees.

ISSUE: If there is an express written contract for fees between an attorney and his client, may the court still disregard the contract?

HELD: Yes, because a contract for attorney’s fees is different from other contracts. It may be disregarded if the amount fixed is unconscionable or
unreasonable, considering the value of the work accomplished.(NOTE:
A claim for attorney’s fees may be asserted either in the very action in which the services in question have been rendered, or in a separate action. If
the
first alternative is chosen, the court may pass upon said claim even if its amount were less than the minimum prescribed by law for the jurisdiction of
the court over the subject matter of the case for so long as the main action is within the jurisdiction of said court, upon the theory that the right to
recover attorney’s fees is but an INCIDENT of the case in which the services of counsel have been rendered.

Full Text:

[G.R. No. 1299. November 16, 1903. ]

VICENTE PEREZ, Plaintiff-Appellee, v. EUGENIO POMAR, Agent of the Compania-General de Tabacos, Defendant-
Appellant.
SYLLABUS
1. CONTRACTS; CONSENT. — Contracts resulting from an implied consent of the parties are valid and enforceable.

2. ID.; ID.; HIRING. — Where one has rendered services to another, and these services are accepted by the latter, in the absence
of proof that the service was rendered gratuitously, an obligation results to pay the reasonable worth of the services rendered
upon the implied contract of hiring.

3. ID.; ID.; ID. — Although no fixed amount may have been determined as the consideration for the contract of hiring, the
contract is nevertheless valid if the amount of the implied compensation can be determined by custom or frequent use in the
place where the services were rendered.

DECISION

TORRES, J. :

In a decision dated February 9, 1903, the judge of the Sixth Judicial District, deciding a case brought by the plaintiff against the
defendant for the recovery of wages due and unpaid, gave judgment against the latter for the sum of $600 and the costs of suit,
less the sum of $50, Mexican.

On August 27, 1902, Don Vicente Perez filed in the Court of First Instance of Laguna a complaint, which was amended on the
17th of January of this year, asking that the court determine the amount due the plaintiff, at the customary rate of compensation
for interpreting in these Islands, for services rendered the Tabacalera Company, and that, in view of the circumstances of the
case, judgment be rendered in his favor for such sum. The complaint also asked that the defendant be condemned to the
payment of damages in the sum of $3,200, gold, together with the costs of suit. In this complaint it was alleged that Don Eugenio
Pomar, as general agent of the Compania General de Tabacos in the said province, verbally requested the plaintiff on the 8th of
December, 1901, to act as interpreter between himself and the military authorities, that after the date mentioned the plaintiff
continued to render such services up to and including May 31, 1902; that he had accompanied the defendant, Pomar during that
time at conferences between the latter and the colonel commanding the local garrison, and with various officers and doctors
residing in the capital, and at conferences with Captain Lemen in the town of Pilar, and with the major in command at the town of
Pagsanjan, concerning the shipment of goods from Manila, and with respect to goods shipped from the towns of Santa Cruz, Pilar,
and Pagsanjan to this city; that the plaintiff during this period of time was at the disposal of the defendant, Pomar, and held
himself in readiness to render services whenever required; that on this account his private business, and especially a soap factory
established in the capital, was entirely abandoned; that to the end that such services might be punctually rendered, the agent,
Pomar, assured him that the Tabacalera Company always generously repaid services rendered it, and that he therefore did not
trouble himself about his inability to devote the necessary amount of time to his business, the defendant going so far as to make
him flattering promises of employment with the company, which he did not accept; that these statements were made in the
absence of witnesses and that therefore his only proof as to the same was Mr. Pomar’s word as a gentleman; that the employees
of the company did not understand English, and by reason of the plaintiff’s mediation between the agent and the military
authorities large profits were obtained, as would appear from the account and letterpress books of the agency corresponding to
those dates. In the amended complaint it was added that the defendant, on behalf of the company, offered to remunerate the
plaintiff for the services rendered in the most advantageous manner in which such services are compensated, in view of the
circumstances under which they were requested; and that the plaintiff, by rendering the company such services, was obliged to
abandon his own business, the manufacture of soap, and thereby suffered damages in the sum of $3,200, United States currency.

The defendant, on the 25th of September, 1902, filed an answer asking for the dismissal of the complaint, with costs to the
plaintiff. In his answer the defendant denied the allegation in the first paragraph of the complaint, stating that it was wholly
untrue that the company, and the defendant as its agent, had solicited the services of the plaintiff as interpreter before the
military authorities for the period stated, or for any other period, or that the plaintiff had accompanied Pomar at the conferences
mentioned, concerning shipments from Manila and exports from some of the towns of the province to this capital. He stated that
he especially denied paragraph 2 of the complaint, as it was absolutely untrue that the plaintiff had been at the disposal of the
defendant for the purpose of rendering such services; that he therefore had not been obliged to abandon his occupation or his
soap factory, and that the statement that an offer of employment with the company had been made to him was false. The
defendant also denied that through the mediation of the plaintiff the company and himself had obtained large profits. The
statements in paragraphs 6, 7, 8, and 9 of the complaint were also denied. The defendant stated that, on account of the friendly
relations which sprang up between the plaintiff and himself, the former borrowed from him from time to time money amounting
to $175 for the purposes of his business, and that he had also delivered to the plaintiff 36 arrobas of oil worth $106, and three
packages of resin for use in coloring his soap; that the plaintiff accompanied the defendant to Pagsanjan, Pilar, and other towns
when the latter made business trips to them for the purpose of extending his business and mercantile relations therein; that on
these excursions, as well as on private and official visits which he had to make, the plaintiff occasionally accompanied him
through motives of friendship, and especially because of the free transportation given him, and not on behalf of the company of
which he was never interpreter and for which he rendered no services; that the plaintiff in these conferences acted as interpreter
of his own free will, without being requested to do so by the defendant and without any offer of payment or compensation; that
therefore there existed no legal relation whatever between the company and the plaintiff, and that the defendant, when accepting
the spontaneous voluntary, and officious services of the plaintiff, did so in his private capacity and not as agent of the company,
and that it was for this reason that he refused to enter into negotiations with the plaintiff, he being in no way indebted to the
latter. The defendant concluded by saying that he answered in his individual capacity.

A complaint having been filed against the Compania General de Tabacos and Don Eugenio Polmar, its agent in the Province of
Laguna, the latter, having been duly summoned, replied to the complaint, which was subsequently amended, and stated that he
made such reply in his individual capacity and not as agent of the company, with which the plaintiff had no legal relations. The
suit was instituted between the plaintiff and Pomar, who, as such, accepted the issue and entered into the controversy without
objection, opposed the claim of the plaintiff, and concluded by asking that the complaint be dismissed, with the costs to the
plaintiff. Under these circumstances and construing the statutes liberally, we think it proper to decide the case pending between
both parties in accordance with law and the strict principles of justice.

From the oral testimony introduced at the trial, it appears that the plaintiff, Perez, did on various occasions render Don Eugenio
Pomar services as interpreter of English; and that he obtained passes and accompanied the defendant upon his journeys to some
of the towns in the Province of Laguna. It does not appear from the evidence, however, that the plaintiff was constantly at the
disposal of the defendant during the period of six months or that he rendered services as such interpreter continuously and daily
during that period of time.

It does not appear that any written contract was entered into between the parties for the employment of the plaintiff as
interpreter, or that any other innominate contract was entered into; but whether the plaintiff’s services were solicited or whether
they were offered to the defendant for his assistance, inasmuch as these services were accepted and made use of by the latter,
we must consider that there was a tacit and mutual consent as to the rendition of the services. This gives rise to the obligation
upon the person benefited by the services to make compensation therefor, since the bilateral obligation to render service as
interpreter, on the one hand, and on the other to pay for the services rendered, is thereby incurred. (Arts. 1088, 1089, and 1262
of the Civil Code). The supreme court of Spain in its decision of February 12, 1889, holds, among other things, "that not only is
there an express and tacit consent which produces real contracts but there is also a presumptive consent which is the basis of
quasi contracts, this giving rise to the multiple juridical relations which result in obligations for the delivery of a thing or the
rendition of a service."cralaw virtua1aw library

Notwithstanding the denial of the defendant, it is unquestionable that it was with his consent that the plaintiff rendered him-
services as interpreter, thus aiding him at a time when, owing to the existence of an insurrection in the province, the most
disturbed conditions prevailed. It follows, hence, that there was consent on the part of both in the rendition of such services as
interpreter. Such service not being contrary to law or to good custom, it was a perfectly licit object of contract, and such a
contract must necessarily have existed between the parties, as alleged by the plaintiff. (Art. 1271, Civil Code.)

The consideration for the contract is also evident, it being clear that a mutual benefit was derived in consequence of the service
rendered. It is to be supposed that the defendant accepted these services and that the plaintiff in turn rendered them with the
expectation that the benefit would be reciprocal. This shows the concurrence of the three elements necessary under article 1261
of the Civil Code to constitute a contract of lease of service, or other innominate contract, from which an obligation has arisen and
whose fulfillment is now demanded.

Article 1254 of the Civil Code provides that a contract exists the moment that one or more persons consent to be bound. With
respect to another or others, to deliver some thing or to render some service. Article 1255 provides that the contracting parties
may establish such covenants, terms, and conditions as they deem convenient, provided they are not contrary to law, morals, or
public policy. Whether the service was solicited or offered, the fact remains that Perez rendered to Pomar services as interpreter.
As it does not appear that he did this gratuitously, the duty is imposed upon the defendant, he having accepted the benefit of the
service, to pay a just compensation therefor, by virtue of the innominate contract of facio ut des implicitly established.
The obligations arising from this contract are reciprocal, and, apart from the general provisions with respect to contracts and
obligations, the special provisions concerning contracts for lease of services are applicable by analogy.

In this special contract, as determined by article 1544 of the Civil Code, one of the parties undertakes to render the other a
service for a price certain. The tacit agreement and consent of both parties with respect to the service rendered by the plaintiff,
and the reciprocal benefits accruing to each, are the best evidence of the fact that there was an implied contract sufficient to
create a legal bond, from which arose enforceable rights and obligations of a bilateral character.

In contracts the will of the contracting parties is law, this being a legal doctrine based upon the provisions of articles 1254, 1258,
1262, 1278, 1281, 1282, and 1289 of the Civil Code. If it is a fact sufficiently proven that the defendant, Pomar, on various
occasions consented to accept an interpreter’s services, rendered in his behalf and not gratuitously, it is but just that he should
pay a reasonable remuneration therefor, because it is a well-known principle of law that no one should be permitted to enrich
himself to the damage of another.

With respect to the value of the services rendered on different occasions, the most important of which was the first, as it does not
appear that any salary was fixed upon by the parties at the time the services were accepted, it devolves upon the court to
determine, upon the evidence presented, the value of such services, taking into consideration the few occasions on which they
were rendered. The fact that no fixed or determined consideration for the rendition of the services was agreed upon does not
necessarily involve a violation of the provisions of article 1544 of the Civil Code, because at the time of the agreement this
consideration was capable of being made certain. The discretionary power of the court, conferred upon it by the law, is also
supported by the decisions of the supreme court of Spain, among which may be cited that of October 18, 1899, which holds as
follows: "That as stated in the article of the Code cited, which follows the provisions of law 1 title 8, of the fifth partida, the
contract for lease of services is one in which one of the parties undertakes to make some thing or to render some service to the
other for a certain price, the existence of such a price being understood, as this court has held not only when the price has been
expressly agreed upon but also when it may be determined by the custom and frequent use of the place in which such services
were rendered."cralaw virtua1aw library

No exception was taken to the judgment below by the plaintiff on account of the rejection of his claim for damages. The decision
upon this point is, furthermore, correct.

Upon the supposition that the recovery of the plaintiff should not exceed 200 Mexican pesos, owing to the inconsiderable number
of times he acted as interpreter, it is evident that the contract thus implicitly entered into was not required to be in writing and
that therefore it does not fall within article 1280 of the Civil Code; nor is it included within the provisions of section 335 of the
Code of Civil Procedure, as this innominate contract is not covered by that section. The contract of lease of services is not
included in any of the cases expressly designated by that section of the procedural law, as affirmed by the Appellant. The
interpretation of the other articles of the Code alleged to have been infringed has also been stated fully in this opinion.

For the reasons stated, we are of the opinion that judgment should be rendered against Don Eugenio Pomar for the payment to
the plaintiff of the sum of 200 Mexican pesos, from which will be deducted the sum of 50 pesos due the defendant by the plaintiff.
No special declaration is made as to the costs of this instance. The judgment below is accordingly affirmed in so far as it agrees
with this opinion, and reversed in so far as it may be in conflict therewith. Judgment will be entered accordingly twenty days after
this decision is filed.

Case Digest:

Perez vs Pomar 2 Phil. 682 (1903)

FACTS
Perez filed in the Court of First Instance of Laguna a complaint asking the Court to determine the amount due him for services rendered as an
interpreter for Pomar and for judgement to be rendered in his favor.
Pomar, on his part, denied having sought the services of Perez, contending that, Perez being his friend, he only accepted the services for they were
rendered in a spontaneous, voluntary and officious manner.
ISSUE
Whether or not consent has been given by the other party.
HELD
Yes. It does not appear that any written contract was entered into between the parties for the employment of the plaintiff as interpreter, or that any
other innominate contract was entered into, but whether the plaintiff’s services were solicited or whether they were offered to the defendant for his
assistance, inasmuch as these services were accepted and made use of by the latter, there was a tacit and mutual consent as to the rendition of
services. This gives rise to the delegation upon the person benefited by the services to make compensation thereof, since the bilateral obligation to
render services as interpreter, on the one hand, and on the other to pay for the services rendered is thereby incurred.
As was held in the Supreme Court of Spain in its decision of February 12, 1889, it stated that “not only is there an express and tacit consent which
produces real contract but there is also a presumptive consent which is the basis of quasi-contracts this giving rise to the multiple judicial relations
which result in obligations for the delivery of a thing or the rendition of a service.

Full Text:
G.R. No. 34840 September 23, 1931
NARCISO GUTIERREZ, Plaintiff-Appellee, vs. BONIFACIO GUTIERREZ, MARIA V. DE GUTIERREZ, MANUEL GUTIERREZ,
ABELARDO VELASCO, and SATURNINO CORTEZ, Defendants-Appellants.
MALCOLM, J.:
This is an action brought by the plaintiff in the Court of First Instance of Manila against the five defendants, to recover damages
in the amount of P10,000, for physical injuries suffered as a result of an automobile accident. On judgment being rendered as
prayed for by the plaintiff, both sets of defendants appealed.chanroblesvirtualawlibrary chanrobles virtual law library
On February 2, 1930, a passenger truck and an automobile of private ownership collided while attempting to pass each other on
the Talon bridge on the Manila South Road in the municipality of Las Piñas, Province of Rizal. The truck was driven by the
chauffeur Abelardo Velasco, and was owned by Saturnino Cortez. The automobile was being operated by Bonifacio Gutierrez, a
lad 18 years of age, and was owned by Bonifacio's father and mother, Mr. and Mrs. Manuel Gutierrez. At the time of the collision,
the father was not in the car, but the mother, together will several other members of the Gutierrez family, seven in all, were
accommodated therein. A passenger in the autobus, by the name of Narciso Gutierrez, was en route from San Pablo, Laguna, to
Manila. The collision between the bus and the automobile resulted in Narciso Gutierrez suffering a fracture right leg which
required medical attendance for a considerable period of time, and which even at the date of the trial appears not to have healed
properly.chanroblesvirtualawlibrary chanrobles virtual law library
It is conceded that the collision was caused by negligence pure and simple. The difference between the parties is that, while the
plaintiff blames both sets of defendants, the owner of the passenger truck blames the automobile, and the owner of the
automobile, in turn, blames the truck. We have given close attention to these highly debatable points, and having done so, a
majority of the court are of the opinion that the findings of the trial judge on all controversial questions of fact find sufficient
support in the record, and so should be maintained. With this general statement set down, we turn to consider the respective
legal obligations of the defendants.chanroblesvirtualawlibrary chanrobles virtual law library
In amplification of so much of the above pronouncement as concerns the Gutierrez family, it may be explained that the youth
Bonifacio was in incompetent chauffeur, that he was driving at an excessive rate of speed, and that, on approaching the bridge
and the truck, he lost his head and so contributed by his negligence to the accident. The guaranty given by the father at the time
the son was granted a license to operate motor vehicles made the father responsible for the acts of his son. Based on these facts,
pursuant to the provisions of article 1903 of the Civil Code, the father alone and not the minor or the mother, would be liable for
the damages caused by the minor.chanroblesvirtualawlibrary chanrobles virtual law library
We are dealing with the civil law liability of parties for obligations which arise from fault or negligence. At the same time, we
believe that, as has been done in other cases, we can take cognizance of the common law rule on the same subject. In the United
States, it is uniformly held that the head of a house, the owner of an automobile, who maintains it for the general use of his
family is liable for its negligent operation by one of his children, whom he designates or permits to run it, where the car is
occupied and being used at the time of the injury for the pleasure of other members of the owner's family than the child driving
it. The theory of the law is that the running of the machine by a child to carry other members of the family is within the scope of
the owner's business, so that he is liable for the negligence of the child because of the relationship of master and servant. (Huddy
On Automobiles, 6th ed., sec. 660; Missell vs. Hayes [1914], 91 Atl., 322.) The liability of Saturnino Cortez, the owner of the
truck, and of his chauffeur Abelardo Velasco rests on a different basis, namely, that of contract which, we think, has been
sufficiently demonstrated by the allegations of the complaint, not controverted, and the evidence. The reason for this conclusion
reaches to the findings of the trial court concerning the position of the truck on the bridge, the speed in operating the machine,
and the lack of care employed by the chauffeur. While these facts are not as clearly evidenced as are those which convict the
other defendant, we nevertheless hesitate to disregard the points emphasized by the trial judge. In its broader aspects, the case
is one of two drivers approaching a narrow bridge from opposite directions, with neither being willing to slow up and give the
right of way to the other, with the inevitable result of a collision and an accident.chanroblesvirtualawlibrary chanrobles virtual law
library
The defendants Velasco and Cortez further contend that there existed contributory negligence on the part of the plaintiff,
consisting principally of his keeping his foot outside the truck, which occasioned his injury. In this connection, it is sufficient to
state that, aside from the fact that the defense of contributory negligence was not pleaded, the evidence bearing out this theory
of the case is contradictory in the extreme and leads us far afield into speculative matters.chanroblesvirtualawlibrary chanrobles
virtual law library
The last subject for consideration relates to the amount of the award. The appellee suggests that the amount could justly be
raised to P16,517, but naturally is not serious in asking for this sum, since no appeal was taken by him from the judgment. The
other parties unite in challenging the award of P10,000, as excessive. All facts considered, including actual expenditures and
damages for the injury to the leg of the plaintiff, which may cause him permanent lameness, in connection with other
adjudications of this court, lead us to conclude that a total sum for the plaintiff of P5,000 would be fair and reasonable. The
difficulty in approximating the damages by monetary compensation is well elucidated by the divergence of opinion among the
members of the court, three of whom have inclined to the view that P3,000 would be amply sufficient, while a fourth member has
argued that P7,500 would be none too much.chanroblesvirtualawlibrary chanrobles virtual law library
In consonance with the foregoing rulings, the judgment appealed from will be modified, and the plaintiff will have judgment in his
favor against the defendants Manuel Gutierrez, Abelardo Velasco, and Saturnino Cortez, jointly and severally, for the sum of
P5,000, and the costs of both instances.

Case Digest:
Gutierrez vs Gutierrez
G.R. NO. 34840
FACTS
On February 2, 1930, a passenger truck and an automobile of private ownership collided while attempting to pass each other on a bridge. The truck
was driven by the chauffeur Abelardo Velasco, and was owned by saturnine Cortez. The automobile was being operated by Bonifacio Gutierrez, a
lad 18 years of age, and was owned by Bonifacio’s father and mother, Mr. and Mrs. Manuel Gutierrez. At the time of the collision, the father was not
in the car, but the mother, together with several other members of the Gutierrez family were accommodated therein.
The collision between the bus and the automobile resulted in Narciso Gutierrez suffering a fractured right leg which required medical attendance for
a considerable period of time.
ISSUE
Whether or not both the driver of the truck and automobile are liable for damages and indemnification due to their negligence. What are the legal
obligations of the defendants?
HELD
Bonifacio Gutierrez’s obligation arises from culpa aquiliana. On the other hand, Saturnino Cortez’s and his chauffeur Abelardo Velasco’s obligation
rise from culpa contractual.
The youth Bonifacio was na incompetent chauffeur, that he was driving at an excessive rate of speed, and that, on approaching the bridge and the
truck, he lost his head and so contributed by his negligence to the accident. The guaranty given by the father at the time the son was granted a
license to operate motor vehicles made the father responsible for the acts of his son. Based on these facts, pursuant to the provisions of Art. 1903 of
the Civil Code, the father alone and not the minor or the mother would be liable for the damages caused by the minor. The liability of Saturnino
Cortez, the owner of the truck, and his chauffeur Abelardo Velasco rests on a different basis, namely, that of contract.
Full Text:
G.R. No. L-6913 November 21, 1913
THE ROMAN CATHOLIC BISHOP OF JARO, Plaintiff-Appellee, vs. GREGORIO DE LA PEÑA, administrator of the estate of
Father Agustin de la Peña, Defendant-Appellant.
MORELAND, J.:
This is an appeal by the defendant from a judgment of the Court of First Instance of Iloilo, awarding to the plaintiff the sum of
P6,641, with interest at the legal rate from the beginning of the action.chanroblesvirtualawlibrary chanrobles virtual law library
It is established in this case that the plaintiff is the trustee of a charitable bequest made for the construction of a leper hospital
and that father Agustin de la Peña was the duly authorized representative of the plaintiff to receive the legacy. The defendant is
the administrator of the estate of Father De la Peña.chanroblesvirtualawlibrary chanrobles virtual law library
In the year 1898 the books Father De la Peña, as trustee, showed that he had on hand as such trustee the sum of P6,641,
collected by him for the charitable purposes aforesaid. In the same year he deposited in his personal account P19,000 in the
Hongkong and Shanghai Bank at Iloilo. Shortly thereafter and during the war of the revolution, Father De la Peña was arrested by
the military authorities as a political prisoner, and while thus detained made an order on said bank in favor of the United States
Army officer under whose charge he then was for the sum thus deposited in said bank. The arrest of Father De la Peña and the
confiscation of the funds in the bank were the result of the claim of the military authorities that he was an insurgent and that the
funds thus deposited had been collected by him for revolutionary purposes. The money was taken from the bank by the military
authorities by virtue of such order, was confiscated and turned over to the Government.chanroblesvirtualawlibrary chanrobles
virtual law library
While there is considerable dispute in the case over the question whether the P6,641 of trust funds was included in the P19,000
deposited as aforesaid, nevertheless, a careful examination of the case leads us to the conclusion that said trust funds were a
part of the funds deposited and which were removed and confiscated by the military authorities of the United
States.chanroblesvirtualawlibrary chanrobles virtual law library
That branch of the law known in England and America as the law of trusts had no exact counterpart in the Roman law and has
none under the Spanish law. In this jurisdiction, therefore, Father De la Peña's liability is determined by those portions of the Civil
Code which relate to obligations. (Book 4, Title 1.) chanrobles virtual law library
Although the Civil Code states that "a person obliged to give something is also bound to preserve it with the diligence pertaining
to a good father of a family" (art. 1094), it also provides, following the principle of the Roman law, major casus est, cui humana
infirmitas resistere non potest, that "no one shall be liable for events which could not be foreseen, or which having been foreseen
were inevitable, with the exception of the cases expressly mentioned in the law or those in which the obligation so declares." (Art.
1105.) chanrobles virtual law library
By placing the money in the bank and mixing it with his personal funds De la Peña did not thereby assume an obligation different
from that under which he would have lain if such deposit had not been made, nor did he thereby make himself liable to repay the
money at all hazards. If the had been forcibly taken from his pocket or from his house by the military forces of one of the
combatants during a state of war, it is clear that under the provisions of the Civil Code he would have been exempt from
responsibility. The fact that he placed the trust fund in the bank in his personal account does not add to his responsibility. Such
deposit did not make him a debtor who must respond at all hazards.chanroblesvirtualawlibrary chanrobles virtual law library
We do not enter into a discussion for the purpose of determining whether he acted more or less negligently by depositing the
money in the bank than he would if he had left it in his home; or whether he was more or less negligent by depositing the money
in his personal account than he would have been if he had deposited it in a separate account as trustee. We regard such
discussion as substantially fruitless, inasmuch as the precise question is not one of negligence. There was no law prohibiting him
from depositing it as he did and there was no law which changed his responsibility be reason of the deposit. While it may be true
that one who is under obligation to do or give a thing is in duty bound, when he sees events approaching the results of which will
be dangerous to his trust, to take all reasonable means and measures to escape or, if unavoidable, to temper the effects of those
events, we do not feel constrained to hold that, in choosing between two means equally legal, he is culpably negligent in selecting
one whereas he would not have been if he had selected the other.chanroblesvirtualawlibrary chanrobles virtual law library
The court, therefore, finds and declares that the money which is the subject matter of this action was deposited by Father De la
Peña in the Hongkong and Shanghai Banking Corporation of Iloilo; that said money was forcibly taken from the bank by the
armed forces of the United States during the war of the insurrection; and that said Father De la Peña was not responsible for its
loss.chanroblesvirtualawlibrary chanrobles virtual law library
The judgment is therefore reversed, and it is decreed that the plaintiff shall take nothing by his complaint.

Case Digest:
The Roman Catholic Bishop of Jaro vs. Gregorio De La PeÑa
G.R. No. L-6913 November 21, 1913
THE ROMAN CATHOLIC BISHOP OF JARO, plaintiff-appellee,
vs.
GREGORIO DE LA PEÑA, administrator of the estate of Father Agustin de la Peña, defendant-appellant.
MORELAND, J.:
FACTS: In 1898 Fr. De la Peña assigned as trustee of the sum of P6,641, collected by him for the charitable purposes he deposited in his personal
account P19,000 in the Hongkong and Shanghai Bank at Iloilo. During the war of the revolution, Father De la Peña was arrested by the military
authorities as a political prisoner. The arrest of Father De la Peña and the confiscation of the funds in the bank were the result of the claim of the
military authorities that he was an insurgent and that the funds deposited had been collected by him is for revolutionary purposes. The money was
taken from the bank by the military authorities by virtue of such order, was confiscated and turned over to the Government.
ISSUES: Whether or not Father De la Peña is liable for the loss of the funds?
RULLING: No, he is not liable because there is no negligent act on the part of Fr. De la Peña. It was so happened that during that time the money
was taken from him by the U.S. military forces which is unforeseen event. Although the Civil Code states that “a person obliged to give something is
also bound to preserve it with the diligence pertaining to a good father of a family”, it also provides, following the principle of the Roman law that “no
one shall be liable for events which could not be foreseen, or which having been foreseen were inevitable, with the exception of the cases expressly
mentioned in the law or those in which the obligation so declares.”
Full Text:

G.R. No. L-12342 August 3, 1918

A. A. ADDISON, Plaintiff-Appellant, vs. MARCIANA FELIX and BALBINO TIOCO, Defendants-Appellees.
Thos. D. Aitken for appellant.
Modesto Reyes and Eliseo Ymzon for appellees.
FISHER, J.:
By a public instrument dated June 11, 1914, the plaintiff sold to the defendant Marciana Felix, with the consent of her husband,
the defendant Balbino Tioco, four parcels of land, described in the instrument. The defendant Felix paid, at the time of the
execution of the deed, the sum of P3,000 on account of the purchase price, and bound herself to pay the remainder in
installments, the first of P2,000 on July 15, 1914, and the second of P5,000 thirty days after the issuance to her of a certificate of
title under the Land Registration Act, and further, within ten years from the date of such title P10, for each coconut tree in
bearing and P5 for each such tree not in bearing, that might be growing on said four parcels of land on the date of the issuance of
title to her, with the condition that the total price should not exceed P85,000. It was further stipulated that the purchaser was to
deliver to the vendor 25 per centum of the value of the products that she might obtain from the four parcels "from the moment
she takes possession of them until the Torrens certificate of title be issued in her favor." chanrobles virtual law library
It was also covenanted that "within one year from the date of the certificate of title in favor of Marciana Felix, this latter may
rescind the present contract of purchase and sale, in which case Marciana Felix shall be obliged to return to me, A. A. Addison,
the net value of all the products of the four parcels sold, and I shall obliged to return to her, Marciana Felix, all the sums that she
may have paid me, together with interest at the rate of 10 per cent per annum." chanrobles virtual law library
In January, 1915, the vendor, A. A. Addison, filed suit in Court of First Instance of Manila to compel Marciana Felix to make
payment of the first installment of P2,000, demandable in accordance with the terms of the contract of sale aforementioned, on
July 15, 1914, and of the interest in arrears, at the stipulated rate of 8 per cent per annum. The defendant, jointly with her
husband, answered the complaint and alleged by way of special defense that the plaintiff had absolutely failed to deliver to the
defendant the lands that were the subject matter of the sale, notwithstanding the demands made upon him for this purpose. She
therefore asked that she be absolved from the complaint, and that, after a declaration of the rescission of the contract of the
purchase and sale of said lands, the plaintiff be ordered to refund the P3,000 that had been paid to him on account, together with
the interest agreed upon, and to pay an indemnity for the losses and damages which the defendant alleged she had suffered
through the plaintiff's non-fulfillment of the contract.chanroblesvirtualawlibrary chanrobles virtual law library
The evidence adduced shows that after the execution of the deed of the sale the plaintiff, at the request of the purchaser, went to
Lucena, accompanied by a representative of the latter, for the purpose of designating and delivering the lands sold. He was able
to designate only two of the four parcels, and more than two-thirds of these two were found to be in the possession of one Juan
Villafuerte, who claimed to be the owner of the parts so occupied by him. The plaintiff admitted that the purchaser would have to
bring suit to obtain possession of the land (sten. notes, record, p. 5). In August, 1914, the surveyor Santamaria went to Lucena,
at the request of the plaintiff and accompanied by him, in order to survey the land sold to the defendant; but he surveyed only
two parcels, which are those occupied mainly by the brothers Leon and Julio Villafuerte. He did not survey the other parcels, as
they were not designated to him by the plaintiff. In order to make this survey it was necessary to obtain from the Land Court a
writ of injunction against the occupants, and for the purpose of the issuance of this writ the defendant, in June, 1914, filed an
application with the Land Court for the registration in her name of four parcels of land described in the deed of sale executed in
her favor by the plaintiff. The proceedings in the matter of this application were subsequently dismissed, for failure to present the
required plans within the period of the time allowed for the purpose.chanroblesvirtualawlibrary chanrobles virtual law library
The trial court rendered judgment in behalf of the defendant, holding the contract of sale to be rescinded and ordering the return
to the plaintiff the P3,000 paid on account of the price, together with interest thereon at the rate of 10 per cent per annum. From
this judgment the plaintiff appealed.chanroblesvirtualawlibrary chanrobles virtual law library
In decreeing the rescission of the contract, the trial judge rested his conclusion solely on the indisputable fact that up to that time
the lands sold had not been registered in accordance with the Torrens system, and on the terms of the second paragraph of
clause ( h) of the contract, whereby it is stipulated that ". . . within one year from the date of the certificate of title in favor of
Marciana Felix, this latter may rescind the present contract of purchase and sale . . . ."chanrobles virtual law library
The appellant objects, and rightly, that the cross-complaint is not founded on the hypothesis of the conventional rescission relied
upon by the court, but on the failure to deliver the land sold. He argues that the right to rescind the contract by virtue of the
special agreement not only did not exist from the moment of the execution of the contract up to one year after the registration of
the land, but does not accrue until the land is registered. The wording of the clause, in fact, substantiates the contention. The one
year's deliberation granted to the purchaser was to be counted "from the date of the certificate of title ... ." Therefore the right to
elect to rescind the contract was subject to a condition, namely, the issuance of the title. The record show that up to the present
time that condition has not been fulfilled; consequently the defendant cannot be heard to invoke a right which depends on the
existence of that condition. If in the cross-complaint it had been alleged that the fulfillment of the condition was impossible for
reasons imputable to the plaintiff, and if this allegation had been proven, perhaps the condition would have been considered as
fulfilled (arts. 1117, 1118, and 1119, Civ. Code); but this issue was not presented in the defendant's
answer.chanroblesvirtualawlibrary chanrobles virtual law library
However, although we are not in agreement with the reasoning found in the decision appealed from, we consider it to be correct
in its result. The record shows that the plaintiff did not deliver the thing sold. With respect to two of the parcels of land, he was
not even able to show them to the purchaser; and as regards the other two, more than two-thirds of their area was in the hostile
and adverse possession of a third person.chanroblesvirtualawlibrary chanrobles virtual law library
The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered when it is
placed "in the hands and possession of the vendee." (Civ. Code, art. 1462.) It is true that the same article declares that the
execution of a public instruments is equivalent to the delivery of the thing which is the object of the contract, but, in order that
this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over the
thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the
purchaser the ownership and the right of possession. The thing sold must be placed in his control. When there is no impediment
whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery
through the execution of a public instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser
cannot have the enjoyment and material tenancy of the thing and make use of it himself or through another in his name, because
such tenancy and enjoyment are opposed by the interposition of another will, then fiction yields to reality - the delivery has not
been effected.chanroblesvirtualawlibrary chanrobles virtual law library
As Dalloz rightly says (Gen. Rep., vol. 43, p. 174) in his commentaries on article 1604 of the French Civil code, "the word
"delivery" expresses a complex idea . . . the abandonment of the thing by the person who makes the delivery and the taking
control of it by the person to whom the delivery is made."chanrobles virtual law library
The execution of a public instrument is sufficient for the purposes of the abandonment made by the vendor; but it is not always
sufficient to permit of the apprehension of the thing by the purchaser.chanroblesvirtualawlibrary chanrobles virtual law library
The supreme court of Spain, interpreting article 1462 of the Civil Code, held in its decision of November 10, 1903, (Civ. Rep., vol.
96, p. 560) that this article "merely declares that when the sale is made through the means of a public instrument, the execution
of this latter is equivalent to the delivery of the thing sold: which does not and cannot mean that this fictitious tradition
necessarily implies the real tradition of the thing sold, for it is incontrovertible that, while its ownership still pertains to the vendor
(and with greater reason if it does not), a third person may be in possession of the same thing; wherefore, though, as a general
rule, he who purchases by means of a public instrument should be deemed . . . to be the possessor in fact, yet this presumption
gives way before proof to the contrary."chanrobles virtual law library
It is evident, then, in the case at bar, that the mere execution of the instrument was not a fulfillment of the vendors' obligation to
deliver the thing sold, and that from such non-fulfillment arises the purchaser's right to demand, as she has demanded, the
rescission of the sale and the return of the price. (Civ. Code, arts. 1506 and 1124.)chanrobles virtual law library
Of course if the sale had been made under the express agreement of imposing upon the purchaser the obligation to take the
necessary steps to obtain the material possession of the thing sold, and it were proven that she knew that the thing was in the
possession of a third person claiming to have property rights therein, such agreement would be perfectly valid. But there is
nothing in the instrument which would indicate, even implicitly, that such was the agreement. It is true, as the appellant argues,
that the obligation was incumbent upon the defendant Marciana Felix to apply for and obtain the registration of the land in the
new registry of property; but from this it cannot be concluded that she had to await the final decision of the Court of Land
Registration, in order to be able to enjoy the property sold. On the contrary, it was expressly stipulated in the contract that the
purchaser should deliver to the vendor one-fourth "of the products ... of the aforesaid four parcels from the moment when she
takes possession of them until the Torrens certificate of title be issued in her favor." This obviously shows that it was not forseen
that the purchaser might be deprived of her possession during the course of the registration proceedings, but that the transaction
rested on the assumption that she was to have, during said period, the material possession and enjoyment of the four parcels of
land.chanroblesvirtualawlibrary chanrobles virtual law library
Inasmuch as the rescission is made by virtue of the provisions of law and not by contractual agreement, it is not the conventional
but the legal interest that is demandable.chanroblesvirtualawlibrary chanrobles virtual law library
It is therefore held that the contract of purchase and sale entered into by and between the plaintiff and the defendant on June 11,
1914, is rescinded, and the plaintiff is ordered to make restitution of the sum of P3,000 received by him on account of the price of
the sale, together with interest thereon at the legal rate of 6 per annum from the date of the filing of the complaint until
payment, with the costs of both instances against the appellant. So ordered.

Case Digest:
Addison vs. Felix, 38 Phil. 404 (August 3, 1918)
FACTS
Petitioner Addison sold four parcels of land to Defendant spouses Felix and Tioco located in LucenaCity. Respondents paid P3,000.00 for the
purchase price and promised to pay the remaining by installment. The contract provides that the purchasers may rescind the contract within one year
after the issuance of title on their name.
The petitioner went to Lucena for the survey designaton and delivery of the land but only 2 parcels were designated and 2/3 of it was in possession
of a Juan Villafuerte.
The other parcels were not surveyed and designated by Addison.
Addison demanded from petitioner the payment of the first installment but the latter contends that there was no delivery and as such, they are
entitled to get back the 3K purchase price they gave upon the execution of the contract.
ISSUE
WON there was a valid delivery.
HELD
The record shows that the plaintiff did not deliver the thing sold. With respect to two of the parcels of land, he was not even able to show them to the
purchaser; and as regards the other two, more than two-thirds of their area was in the hostile and adverse possession of a third person.
It is true that the same article declares that the execution of a public instruments is equivalent to the delivery of the thing which is the object of the
contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over
the thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the
ownership and the right of possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold
passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufficient.
But if there is an impediment, delivery cannot be deemed effected.

Full Text:
G.R. No. 187013, April 22, 2015
SPOUSES MAGDALINO AND CLEOFE BADILLA, Petitioners, v. FE BRAGAT, Respondent.
DECISION
PERALTA, J.:
This is a petition for review on certiorari, under Rule 45 of the Rules of Court, assailing the Decision dated October 9, 2008 and
Resolution dated February 12, 2009 of the Court of Appeals rendered in CA-G.R. CV No. 70423-MIN.

The case involves the issue of ownership of the subject real property.

The facts follow.

Azur Pastrano and his wife Profitiza Ebaning (Spouses Pastrano) were the original owners of Lot No. 19986 (subject property),
located at Tablon, Cagayan de Oro City. Its Original Certificate of Title (OCT) No. P-2035, consisting of 1,015 sq. m. was issued
on November 18, 1980.1 The OCT was in the name of Azur Pastrano.2redarclaw
Before the issuance of the OCT, however, the Spouses Pastrano, on November 18, 1968, sold the lot to Eustaquio P. Ledesma, Jr.
(Ledesma), as evidenced by a Deed of Definite Sale of Unregistered Coconut and Residential Land.3redarclaw

The petitioners, the spouses Magdalino and Cleofe Badilla (Spouses Badilla) claimed that in 1970, Ledesma sold to them, "on
installment" basis, a portion amounting to 200 sq. m. of Lot No. 19986 (subject property). The sale was not reduced in writing,
however, possession of the portion sold was transferred to the Badillas, which portion the Badillas claim was designated as Lot
No. 19986-B.4redarclaw

On April 18, 1978, the spouses Florito Bragat and Fe Bragat (Spouses Bragat) bought 991 sq. m. of the property from Ledesma
and his wife, via a Deed of Absolute Sale of a Residential Lot.5 Two (2) tax declarations were allegedly issued as a result of the
sale: one designated a lot as Lot No. 19986-A with an area of 642 sq. m.,6 while another designated the other lot as Lot No.
19986-B with an area of 349 sq. m.7redarclaw

On May 5, 1984, the Spouses Pastrano executed another Deed of Absolute Sale of Registered Land in favor of herein petitioner Fe
Bragat (Bragat), covered by OCT No. P-2035 and with an area of 1,015 sq. m.8 On the same date, Azur Pastrano executed an
Affidavit of Loss reporting the loss of the owner's duplicate copy of OCT No. P-2035.9redarclaw

It was Bragat, however, who petitioned the court for the issuance of a new owner's duplicate copy of OCT No. P-2035. Thus, on
July 24, 1987, the RTC ordered the issuance of a new owner's copy of OCT No. P-2035.10redarclaw

On October 2, 1987, the Spouses Pastrano executed yet another Deed of Sale of Registered Land in favor of Bragat, which land is
again covered by OCT No. P-2035 with an area of 1,015 sq. m.11 As a result, OCT No. P-2035 was canceled and TCT No. T-47759
was issued in the name of Bragat.12redarclaw

On March 7, 1991, Bragat, through her counsel, made a written demand to vacate against the Spouses Badilla. In response, the
Spouses Badilla, also through their counsel's letter, refused the demand and raised the earlier sale made by the Spouses Pastrano
to Ledesma and the subsequent sale by Ledesma to the Badillas.13redarclaw

Hence, the parties filed their respective complaints within days of each other.

Bragat filed her Complaint for Recovery of Posession and Damages against the spouses Magdalino and Cleofe Badilla on June 5,
1992, alleging therein that she is the absolute owner of Lot No. 19986, covered by TCT No. T-47759. She claimed to have
purchased the property, first, from Eustaquio Ledesma, Jr., but later, when she found out that Ledesma was "unauthorized" to
sell, she again allegedly made another purchase of the same property from Azur Pastrano, on May 5, 1984. This led to the
cancellation of Pastrano's OCT No. P-2035 and the issuance of Bragat's TCT No. T-47759. Thus, she prays for the Spouses Badilla
to be ordered to vacate the around 149-square-meter portion that they occupy in the property.14redarclaw

Just six days later, on June 11, 1992, the Spouses Badilla filed their own Complaint for Quieting of Title, Declaration of Nullity of
TCT No. T-47759 and Damages against Bragat, claiming that the Spouses Badilla are the lawful owners and possessors of Lot No.
19986-B (a portion of Lot No. 19986), having acquired it in 1970 from Ledesma. The latter, on his part, allegedly bought the
bigger Lot No. 19986 from Pastrano earlier on November 18, 1968. The Spouses Badilla alleged that they took possession of and
built a house on the property upon their purchase thereof from Ledesma and has since remained in possession. However, they
claimed that Pastrano was subsequently able to obtain a free patent and a title, OCT No. P-2035, over Lot No. 19986. According
to the Badillas, Pastrano made a sale to Bragat on October 2, 1987, but such sale is not valid since Pastrano was no longer the
owner of the property on that date. Consequently, the Spouses Badilla prayed that TCT No. T-47759 issued to Bragat pursuant to
that sale be declared null and void.15redarclaw

After Answers were filed for both complaints, the two cases were consolidated and heard by one court, Branch 25 of the RTC of
Cagayan de Oro City, as they involved exactly the same parties and subject lot.

After trial, the RTC found for Bragat, noting that the sketch map shows the 152-square-meter portion occupied by the Spouses
.Badilla is within the titled property of Bragat.16 It also found Bragat's title as valid for what it saw as the result of a purchase in
good faith and. for value.17 In contrast, the trial court observed a lack of evidence of the Spouses Badilla. The latter allegedly
presented handwritten and typewritten receipts which were purportedly signed by Ledesma, dated March 5, 1989, March 1, 1991
and March 23, 1991 acknowledging Ledesma's receipt of certain amounts, but the court claimed that it found no evidence of
(Ledesma's) absolute ownership on these dates. The court noted that Ledesma had sold previously to the Spouses Bragat via a
Deed of Absolute Sale of Residential Land dated April 18, 1978. Hence, in the trial court's view, on March 5, 1989, March 1, 1991
and March 23, 1991, Ledesma no longer owned the land and transferred nothing to the Badillas.18 The dispositive portion of the
RTC decision states:LawlibraryofCRAlaw
IN THE LIGHT OF THE FOREGOING, by preponderance of evidence, judgment is hereby rendered in favor of Spouses Fe Bragat
and Florito Bragat and against Spouses Magdalino and Cleofe Badilla and dismissing Civil Case No. 92-287 for failure of Spouses
Magdalino and Cleofe Badilla to substantiate their complaint and for lack of merit and ordering defendants Cleofe Badilla and
Magdalino Badilla in Civil Case No. 92-273:LawlibraryofCRAlaw
a) to vacate immediately the 152-square-meter property they are occupying as shown in Exh. N-2-A, P;
b) to pay Twenty Thousand Pesos (P20,000.00) by way of moral damages;
c) to pay a reasonable rental of One Hundred Pesos (P100.00) a month from March 1, 1991 at 6% legal interest until they
vacate the premises;
d) to reimburse Ten Thousand Pesos (P10,000.00) attorney's fees and Five Thousand Pesos (P5,000.00) as expenses for
litigation as part of consequential damages; and
e) pay the costs.
SO ORDERED.19
Upon appeal to the CA, the appellate court affirmed the RTC's decision but modified the same on a finding that Ledesma sold only
991 sq. of the property to Bragat in 1978; hence, it held that the remaining 24 sq. of the 1,015-sq.-m. property was validly sold
to the Badillas in 1991 and, therefore, must be reconveyed to the latter.20 It also removed the award of damages. The dispositive
portion of the CA's decision is as follows:LawlibraryofCRAlaw
WHEREFORE, the instant appeal is PARTIALLY GRANTED. The January 14, 2001 Judgment (of the RTC) is MODIFIED in
that:LawlibraryofCRAlaw
a) appellants are ordered to VACATE 128 square meters of the disputed lot and appellee is ordered to RECONVEY 24 square
meters of the disputed lot to appellants, and
b) the reimbursement of attorney's fees and expenses of litigation and the payment of costs are DELETED.
This case is REMANDED to the court of origin for the purpose of determining the 24-square-meter lot to be reconveyed to
appellants.

SO ORDERED.21
Hence, this petition.

Petitioners Spouses Badijla contend that ownership of the 200-sq.-m. portion was transferred to them when they purchased the
same and possession was delivered to them by Ledesma in 1970.22 They also contend that when OCT No. P-2035 was actually
issued in 1980, it was first delivered by Pastrano to Ledesma and, the latter delivered the same to them (the Badillas).23 Thus,
Bragat allegedly falsely claimed the "loss" of the title when she petitioned the court for a new duplicate original, because such title
was not lost but had been with the Badillas all along.24 Another fraud that Bragat allegedly committed was the Deed of Sale dated
October 2, 1987, in which Profitiza Pastrano signed (in marital consent) although she had been dead since March 30,
1985.25redarclaw

In her Comment, Bragat claims that the sale of October 2, 1987 was only a "re-execution" of the sale of May 5, 1984, in order to
avoid tax surcharges.26 Further, she alleges that the Badillas1 documentary evidence were all executed only after she had the
property titled to her name.27redarclaw

The Court resolves to GRANT the petition.

The issue is one of ownership of the subject property.

This Court notes that the arguments raised call for a re-examination of the factual findings of the trial court and the appellate
court. It must be stressed that it is a time-honored rule that in a petition for review on certiorari under Rule 45, only questions of
law may be raised.28 Certainly, it is equally observed that factual findings of the Court of Appeals, affirming those of the trial
court, are binding on this Court.29redarclaw

However, these rules admit of certain exceptions, such as when the judgment of the Court of Appeals is premised on a
misapprehension of facts, or is belied by the evidence on record, or fails to notice certain relevant facts which, if properly
considered, will justify a different conclusion.30 After a thorough examination of the findings of the trial court and Court of
Appeals, this Court concludes that the case falls under these exceptional situations. Such findings must be reversed.

The error of the courts below is in misapprehending the fact that ownership' passed to the Spouses Badilla upon their purchase of
the subject property from Eustaquio Ledesma.

It is not disputed that the spouses Azur and Profitiza Pastrano had previously sold on November 18, 1968, via a Deed of Definite
Sale of Unregistered Coconut and Residential Land, the property to Eustaquio Ledesma.31 Therefore, as early as such date, it is
established that the Pastranos no longer had ownership over the property.

Then, as Ledesma subsequently sold, in 1970, a portion of the property to the petitioner Spouses Badilla, who immediately took
delivery and possession, ownership of this portion had also been transferred to the said spouses. Although that sale appears to be
merely verbal, and payment therefor was to be made on installment, it is a partially consummated sale, with the Badillas paying
the initial purchase price and Ledesma surrendering possession.32 That the parties intended for ownership to be transferred may
be inferred from their lack of any agreement stipulating that ownership of the property is reserved by the seller and shall not pass
to the buyer until the latter has fully paid the purchase price.33 The fact is, Ledesma even delivered to the Badillas the owner's
duplicate copy of OCT No. P-2035.34 The Civil Code states that ownership of the thing sold is transferred to the vendee upon the
actual or constructive delivery of the same.35 And the thing is understood as delivered when it is placed in the control and
possession of the vendee.36 Payment of the purchase price is not essential to the transfer of ownership as long as the property
sold has been delivered; and such delivery (traditio) operated to divest the vendor of title to the property which may not be
regained or recovered until and unless the contract is resolved or rescinded in accordance with law.37redarclaw

The same is true even if the sale is a verbal one, because it is held that when a verbal contract has been completed, executed or
partially consummated, its enforceability will not be barred by the Statute of Frauds, which applies only to an executory
agreement.38 Thus, where a party has performed his obligation, oral evidence will be admitted to prove the agreement. And,
where it was proven that one party had delivered the thing sold to another, then the contract was partially executed and the
Statute of Frauds does not apply.39redarclaw

Therefore, with the Spouses Bad ilia owning and occupying the said 152-square-meter portion since 1970, it may be concluded
that TCT No. T-47759 (which canceled OCT No. P-2035) covering the said portion has been wrongfully issued.40redarclaw

In addition, TCT No. T-47759 was issued to Fe Bragat on the strength of a Deed of Sale of Registered Land dated October 2,
1987.41 This deed of sale, however, is void for being simulated, since both the vendor (Pastrano) and the vendee (Bragat) knew
at the time of its execution of the vendor's lack of ownership over Lot No. 19986, the property being sold. At that time, it was not
Pastrano but Ledesma who was absolute owner of the property by virtue of the latter's earlier purchase of Lot No. 19986 from the
Spouses Pastrano on November 18, 1968, via a Deed of Definite Sale of Unregistered Coconut and Residential Land. 42 Bragat
herself knew this, as she and her husband themselves first bought the property from Ledesma through a Deed of Absolute Sale of
Residential Land dated April 18, 1978.43redarclaw

In fact, it is from this sale in 1978 that Fe Bragat derives title on the property and not from tjhe Deeds of Sale dated May 5, 1984
and October 2, 1987 executed between her as vendee and Pastrano as vendor. Pastrano could no longer sell any part of the
property to Bragat on such later dates since he had already sold the same as early as November 18, 1968 to Ledesma. Well-
settled is the rule that no one can give what one does not have - nemodat quod non habet - and, accordingly, one can sell only
what one owns or is authorized to sell, and the buyer acquires no better title than the seller.44 Thus, the sales made on the dates
May 5, 1984 and October 2, 1987 are void for being [simulated and for lack of a subject matter. On these sales, Bragat cannot
clajim good faith as she herself knew of Pastrano's lack of ownership.

It needs emphasis, however, that Bragat's property bought from Ledesma in 1978 does not include the 152-sq.-m. portion that
was already bought by the Badillas.

Therefore, Fe Bragat is entitled to a new transfer certificate of title issued in her name, but on the basis of the Deed of Absolute
Sale dated April 18, 1978, and excluding the 152 sq. m. in area that the Spouses Badilla have already bought and have been
occupying since 1970, but which are currently covered by Bragat's existing title, TCT No. T-47759. Hence, Bragat's TCT No. T-
47759 (which canceled OCT No. P-2035), covering 1,015 sq. m., should be declared void and cancelled and, in its place, two (2)
new ones should be issued: (1) in the name of the spouses Magdalino and Cleofe Badilla, covering the 152 sq. m. that they are
occupying, and (2) in the name of Fe Bragat, covering [the remaining 863 sq. m. The metes and bounds of these two lots are to
be based on the survey plans already submitted by appointed commissioners to the lower court during trial, which are: the
Commissioner's Relocation Survey Report (Exhibit "N")45 signed by Engr. Benigno B. Manlangiti et al., as well as the
accompanying Relocation Sketch Plan (Exhibit "N-2")46 prepared by the same commissioner.

This ruling is compelled by the involvement in this case of not just one instance of double sales but a series of such sales made by
two different vendors. First, it is admitted that Pastrano sold the property to Ledesma in 1968; then, Pastrano sold it again to
Bragat in 1984 and 1987. But Ledesma, too, sold part of the property to the Spouses Badilla in 1970 and then the entire lot to
the Spouses; Bragat in 1978. In such a situation of multiple sales, Article 1544 of the Civil Code relates that ownership shall
belong to the person acquiring the property who, in good faith, first recorded such acquisition. 47 Presently, however, it cannot be
said that Bragat's recording of her 1987 purchase was in good faith because that sale was simulated and Bragat was aware of
other persons who have an interest on the property. That the 1987 sale is void is further revealed by evidence to show that one
of its signatories, Profitiza Pastrano was already dead when it was executed.48 Bragat herself also admitted that she knew of the
Spouses Badillas' occupation prior to her purchase.49 In that case, the same Article 1544 of the Civil Code provides that when
neither buyer registered, in good faith, the sale of the properties with the register of deeds, the one who took prior possession of
the properties shall be the lawful owner thereof.50 Such prior possessors, at least with respect to the 152-sq.-m. portion, are
indisputably the Spouses Badilla.

WHEREFORE, premises considered, the petition is GRANTED. The assailed Decision dated October 9, 2008 and Resolution dated
February 12, 2009 of the Court of Appeals in CA-G.R. CV No. 70423 -MM are hereby REVERSED and SET ASIDE. Transfer
Certificate of Title No. T-47759 is DECLARED VOID, and, in its place, two (2) new transfer certificates of titles are ORDERED
ISSUED, namely: (1) in the name of the Spouses Magdalino and Cleofe Badilla, covering the 152 sq. m. that they are occupying,
and (2) in the name of Fe Bragat, covering the remaining 863 sq. m. of the property, of which measurements are to be based on
Exhibits "N"51 and Exhibit "N-2".52redarclaw

SO ORDERED.

Case Digest:
MAGDALINO, Petitioner vs. BRAGAT, Respondent
G.R. No. 187013, April 22, 2015
FACTS:

- Spouses Pastrano were the original owners of lot no. 19986 (subject property) with OCT no. P-2035, consisting of 1, 015 sq.mtrs. issued on Nov.
18, 1980.

- Before the issuance of OCT spouses Pastrano sold Eustaquio Ledesma by Deed of Definite sale of Unregistered Coconut and Residential Land.

- In 1970, Ledesma verbally sold to Spouses Badillas 200 sq.mtrs. of the subject property on installment basis. The possession was then transferred
to Badillas which they claimed as designated lot no. 19986-B.

- On April 18, 1978, the spouses Bragat- Florito and Fe bought 991 sq.m of the property from Ledesma and his wife via Deed of Absolute Sale of a
residential lot.

- On May 5, 1984, Spouses Pastrano executed another Absolute sale of registered Land in favor herein respondent Fe Bragat over the subject
property. On the same date Pastrano executed an affidavit of loss of OCT P-2035. Bragat petitioned the court of issuances of Owner’s duplicate
copy and the RTC granted.

- On October 2, 1987, Spouses Pastrano executed yet another Deed of Sale of Registered Land in favor of Bragat over subject property the original
OCT P-2035 was cancelled and the new TCT no. T-477759 issued to Bragat.

- On March 7, 1991, Bragat made written demand to vacate against Spouses Badillas and the latter refused the demand and raised the earlier sale
made by spouses Pastrano to Ledesma and subsequent sale by Ledesma to Badillas.
- The RTC decision was in favor of spouses Bragat since spouses Badillas lack of proof but later they presented handwritten and type written
receipts.
- RTC said that Ledesma has no longer own the land and transferred nothing to Badillas.
- The CA affirmed the RTC decision but modified the same on the finding that Ledesma sold only 991 sq.m. to Bragat in 1978, henc, it held that the
remaining 24 sq.m. rom 1,015 sq.m. property was validly sold to Badillas in 1991and therefore recovered by Badillas.

- This case is remanded to the court of origin for the purpose of determining the 24 sq. m. lot to be reconveyed to the appellants.

ISSUE: Whether or not spouses Badillas have ownership over the subject matter?

HELD:

This ruling is compelled by the involvement in this case of not just one instance of double sales but a series of such sales made by two different
vendors. Art. 1544 of NCC relates that ownership shall belong to the person acquiring the property who, in good faith, first recorded such
acquisition. Thus, the petition is GRANTED. The assailed decision of the RTC and resolution of CA REVERSED and SET ASIDE. TCT no. T-47759
is declared VOID and its place two titles are ORDERED ISSUED namely, 1.) in the name of Spouses Magdalino and Cleofe Badilla , covering the
152 sq.m that they occupying, and 2.) in the name of Fe Bragat, covering the remaning 863 sq.m.

Full Text:
[G.R. No. L-27454. April 30, 1970.]

ROSENDO O. CHAVES, Plaintiff-Appellant, v. FRUCTUOSO GONZALES, Defendant-Appellee.

SYLLABUS

1. CIVIL LAW; CONTRACTS; BREACH OF CONTRACT FOR NON-PERFORMANCE; FIXING OF PERIOD BEFORE FILING OF
COMPLAINT FOR NON-PERFORMANCE, ACADEMIC.— Where the time for compliance had expired and there was breach of contract
by non-performance, it was academic for the plaintiff to have first petitioned the court to fix a period for the performance of the
contract before filing his complaint.

2. ID.; ID.; ID.; DEFENDANT CANNOT INVOKE ARTICLE 1197 OF THE CIVIL CODE OF THE PHILIPPINES.— Where the defendant
virtually admitted non-performance of the contract by returning the typewriter that he was obliged to repair in a non-working
condition, with essential parts missing, Article 1197 of the Civil Code of the Philippines cannot be invoked. The fixing of a period
would thus be a mere formality and would serve no purpose than to delay.

3. ID.; ID.; ID.; DAMAGES RECOVERABLE; CASE AT BAR.— Where the defendant-appellee contravened the tenor of his obligation
because he not only did not repair the typewriter but returned it "in shambles,’’ he is liable for the cost of the labor or service
expended in the repair of the typewriter, which is in the amount of P58.75, because the obligation or contract was to repair it. In
addition, he is likewise liable under Art. 1170 of the Code, for the cost of the missing parts, in the amount of P31.10, for in his
obligation to repair the typewriter he was bound, but failed or neglected, to return it in the same condition it was when he
received it.

4. ID.; ID.; ID.; CLAIMS FOR DAMAGES OR ATTORNEY’S FEES NOT RECOVERABLE; NOT ALLEGED OR PROVED IN INSTANT
CASE.— Claims for damages and attorney’s fees must be pleaded, and the existence of the actual basis thereof must be proved.
As no findings of fact were made on the claims for damages and attorney’s fees, there is no factual basis upon which to make an
award therefor.

5. REMEDIAL LAW; APPEALS; APPEAL FROM COURT OF FIRST INSTANCE TO SUPREME COURT; ONLY QUESTIONS OF LAW
REVIEWABLE.— Where the appellant directly appeals from the decision of the trial court to the Supreme Court on questions of
law, he is bound by the judgment of the court a quo on its findings of fact.

DECISION

REYES, J.B.L., J.:

This is a direct appeal by the party who prevailed in a suit for breach of oral contract and recovery of damages but was
unsatisfied with the decision rendered by the Court of First Instance of Manila, in its Civil Case No. 65138, because it awarded
him only P31.10 out of his total claim of P690 00 for actual, temperate and moral damages and attorney’s fees.

The appealed judgment, which is brief, is hereunder quoted in full:jgc:chanrobles.com.ph

"In the early part of July, 1963, the plaintiff delivered to the defendant, who is a typewriter repairer, a portable typewriter for
routine cleaning and servicing. The defendant was not able to finish the job after some time despite repeated reminders made by
the plaintiff. The defendant merely gave assurances, but failed to comply with the same. In October, 1963, the defendant asked
from the plaintiff the sum of P6.00 for the purchase of spare parts, which amount the plaintiff gave to the defendant. On October
26, 1963, after getting exasperated with the delay of the repair of the typewriter, the plaintiff went to the house of the defendant
and asked for the return of the typewriter. The defendant delivered the typewriter in a wrapped package. On reaching home, the
plaintiff examined the typewriter returned to him by the defendant and found out that the same was in shambles, with the
interior cover and some parts and screws missing. On October 29, 1963. the plaintiff sent a letter to the defendant formally
demanding the return of the missing parts, the interior cover and the sum of P6.00 (Exhibit D). The following day, the defendant
returned to the plaintiff some of the missing parts, the interior cover and the P6.00.

"On August 29, 1964, the plaintiff had his typewriter repaired by Freixas Business Machines, and the repair job cost him a total of
P89.85, including labor and materials (Exhibit C).

"On August 23, 1965, the plaintiff commenced this action before the City Court of Manila, demanding from the defendant the
payment of P90.00 as actual and compensatory damages, P100.00 for temperate damages, P500.00 for moral damages, and
P500.00 as attorney’s fees.

"In his answer as well as in his testimony given before this court, the defendant made no denials of the facts narrated above,
except the claim of the plaintiff that the typewriter was delivered to the defendant through a certain Julio Bocalin, which the
defendant denied allegedly because the typewriter was delivered to him personally by the plaintiff.

"The repair done on the typewriter by Freixas Business Machines with the total cost of P89.85 should not, however, be fully
chargeable against the defendant. The repair invoice, Exhibit C, shows that the missing parts had a total value of only P31.10.

"WHEREFORE, judgment is hereby rendered ordering the defendant to pay the plaintiff the sum of P31.10, and the costs of suit.

"SO ORDERED."cralaw virtua1aw library

The error of the court a quo, according to the plaintiff-appellant, Rosendo O. Chaves, is that it awarded only the value of the
missing parts of the typewriter, instead of the whole cost of labor and materials that went into the repair of the machine, as
provided for in Article 1167 of the Civil Code, reading as follows:jgc:chanrobles.com.ph

"ART. 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost.

This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore it may be decreed that
what has been poorly done he undone."cralaw virtua1aw library

On the other hand, the position of the defendant-appellee, Fructuoso Gonzales, is that he is not liable at all, not even for the sum
of P31.10, because his contract with plaintiff-appellant did not contain a period, so that plaintiff-appellant should have first filed a
petition for the court to fix the period, under Article 1197 of the Civil Code, within which the defendant appellee was to comply
with the contract before said defendant-appellee could be held liable for breach of contract.

Because the plaintiff appealed directly to the Supreme Court and the appellee did not interpose any appeal, the facts, as found by
the trial court, are now conclusive and non-reviewable. 1

The appealed judgment states that the "plaintiff delivered to the defendant . . . a portable typewriter for routine cleaning and
servicing" ; that the defendant was not able to finish the job after some time despite repeated reminders made by the plaintiff" ;
that the "defendant merely gave assurances, but failed to comply with the same" ; and that "after getting exasperated with the
delay of the repair of the typewriter", the plaintiff went to the house of the defendant and asked for its return, which was done.
The inferences derivable from these findings of fact are that the appellant and the appellee had a perfected contract for cleaning
and servicing a typewriter; that they intended that the defendant was to finish it at some future time although such time was not
specified; and that such time had passed without the work having been accomplished, far the defendant returned the typewriter
cannibalized and unrepaired, which in itself is a breach of his obligation, without demanding that he should be given more time to
finish the job, or compensation for the work he had already done. The time for compliance having evidently expired, and there
being a breach of contract by non-performance, it was academic for the plaintiff to have first petitioned the court to fix a period
for the performance of the contract before filing his complaint in this case. Defendant cannot invoke Article 1197 of the Civil Code
for he virtually admitted non-performance by returning the typewriter that he was obliged to repair in a non-working condition,
with essential parts missing. The fixing of a period would thus be a mere formality and would serve no purpose than to delay (cf.
Tiglao. Et. Al. V. Manila Railroad Co. 98 Phil. 18l).

It is clear that the defendant-appellee contravened the tenor of his obligation because he not only did not repair the typewriter
but returned it "in shambles", according to the appealed decision. For such contravention, as appellant contends, he is liable
under Article 1167 of the Civil Code. jam quot, for the cost of executing the obligation in a proper manner. The cost of the
execution of the obligation in this case should be the cost of the labor or service expended in the repair of the typewriter, which is
in the amount of P58.75. because the obligation or contract was to repair it.

In addition, the defendant-appellee is likewise liable, under Article 1170 of the Code, for the cost of the missing parts, in the
amount of P31.10, for in his obligation to repair the typewriter he was bound, but failed or neglected, to return it in the same
condition it was when he received it.

Appellant’s claims for moral and temperate damages and attorney’s fees were, however, correctly rejected by the trial court, for
these were not alleged in his complaint (Record on Appeal, pages 1-5). Claims for damages and attorney’s fees must be pleaded,
and the existence of the actual basis thereof must be proved. 2 The appealed judgment thus made no findings on these claims,
nor on the fraud or malice charged to the appellee. As no findings of fact were made on the claims for damages and attorney’s
fees, there is no factual basis upon which to make an award therefor. Appellant is bound by such judgment of the court, a quo, by
reason of his having resorted directly to the Supreme Court on questions of law.

IN VIEW OF THE FOREGOING REASONS, the appealed judgment is hereby modified, by ordering the defendant-appellee to pay,
as he is hereby ordered to pay, the plaintiff-appellant the sum of P89.85, with interest at the legal rate from the filing of the
complaint. Costs in all instances against appellee Fructuoso Gonzales.

Case Digest
Chavez vs. Gonzales
G.R. No. L-27454 April 30, 1970
Rosendo O. Chavez, plaintiff-appellant
vs.
Fructuoso Gonzales, defendant-appellee
REYES, J.B.L., J.:

Facts: On July 1963, Rosendo Chavez brought his typewriter to Fructuoso Gonzales a typewriter repairman for the cleaning and servicing of the
said typewriter but the latter was not able to finish the job. During October 1963, the plaintiff gave the amount of P6.00 to the defendant which the
latter asked from the plaintiff for the purchase of spare parts, because of the delay of the repair the plaintiff decided to recover the typewriter to the
defendant which he wrapped it like a package. When the plaintiff reached their home he opened it and examined that some parts and screws was
lost. That on October 29, 1963 the plaintiff sent a letter to the defendant for the return of the missing parts, the interior cover and the sum of P6.00
(Exhibit D). The following day, the defendant returned to the plaintiff some of the missing parts, the interior cover and the P6.00. The plaintiff brought
his typewriter to Freixas Business Machines and the repair cost the amount of P89.85. He commenced this action on August 23, 1965 in the City
Court of Manila, demanding from the defendant the payment of P90.00 as actual and compensatory damages, P100.00 for temperate damages,
P500.00 for moral damages, and P500.00 as attorney’s fees. The defendant made no denials of the facts narrated above, except the claim of the
plaintiff that the cost of the repair made by Freixas Business Machines be fully chargeable against him.

Issue: Whether or not the defendant is liable for the total cost of the repair made by Freixas Business Machines with the plaintiff typewriter?

Ruling: No, he is not liable for the total cost of the repair made by Freixas Business Machines instead he is only liable for the cost of the missing
parts and screws. The defendant contravened the tenor of his obligation in repairing the typewriter of the plaintiff that he fails to repair it and returned
it with the missing parts, he is liable under “ART. 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost.
This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore it may be decreed that what has been
poorly done he undone.”