Ansay v.

DBP
GR L-13667, April 29, 1960 [
Per C.J. Paras

WHAT HAVE WE LEARNED ABOUT THE TOPIC?

Article 1423 of the New Civil Code classifies obligations into civil or natural. “Civil obligations are right of action to compel
their performance. Natural obligations, not being based on positive law but based on equity and natural law, which do not
grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the
retention of what has been delivered or rendered by reason thereof”. It is thus readily seen that an element of natural
obligation before it can be cognizable by the court is voluntary fulfillment by the obligor.

WHAT DOES THE CASE TEACH US?

ISSUE: Is the grant of Christmas bonus for the years 1954 and 1955 demandable based on natural or moral obligation?
FACTS: Ansay et al. filed against NDC a complaint praying for a 20% Christmas bonus for the years 1954 and 1955. The trial
court dismissed the complaint ratiocinating that a bonus is an act of liberality and the court takes it that it is not within its
judicial powers to command respondents to be liberal and that Ansay et al. admitted that NDC is not under legal duty to
give such bonus and that the court has no power to compel a party to comply with a moral obligation. Ansay et al.
appealed and argued that there exists a cause of action in their complaint because their claim rests on moral grounds or
what in brief is defined by law as a natural obligation.
RULING:
NO. Article 1423 of the New Civil Code classifies obligations into civil or natural. "Civil obligations are a right of action to
compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant
a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of
what has been delivered or rendered by reason thereof".
It is thus readily seen that an element of natural obligation before it can be cognizable by the court is voluntary fulfillment
by the obligor. Certainly retention can be ordered but only after there has been voluntary performance. But here there has
been no voluntary performance. In fact, the court cannot order the performance. In the case of Philippine Education Co.
vs. CIR and the Union of Philippine Education Co., Employees: From the legal point of view a bonus is not a demandable
and enforceable obligation. It is so when it is made a part of the wage or salary compensation.

CBK Power v. CIR

GR 198729-30, January 15, 2014
Per C.J. Sereno

WHAT HAVE WE LEARNED ABOUT THE TOPIC?

ART. 1162 the term quasi-delict refers to all of those obligations which do not arise from law, contracts, quasi-contracts or
criminal offenses. The civil code defined it as the fault or negligence of a person, who by his act or omission connected or
unconnected with, but independent from, any contractual relation, causes damage to another person.

WHAT DOES THE CASE TEACH US?

ISSUE:
Whether or not the BIR may add a requirement– prior application for an ITAD ruling – that is not found in the income tax
treaties signed by the Philippines before a taxpayer can avail of preferential tax rates under said treaties.
FACTS:
CBK Power is a limited partnership duly organized and existing under the laws of the Philippines, and primarily engaged in
the development and operation of hydro electric power generating plants in Laguna.
In February 2001, CBK Power borrowed money from Industrial Bank of Japan, Fortis-Netherlands, Raiffesen Bank, Fortis-
Belgium, and Mizuho Bank for which it remitted interest payments from May 2001 to May 2003. It allegedly withheld final
taxes from said payments based on the following rates: (a) fifteen percent (15%) for Fortis-Belgium, Fortis-Netherlands, and
Raiffesen Bank; and (b) twenty percent (20%) for Industrial Bank of Japan and Mizuho Bank.
However, according to CBK Power, under the relevant tax treaties between the Philippines and the respective countries in
which each of the banks is a resident, the interest income derived by the aforementioned banks are subject only to a
preferential tax rate of 10%
Accordingly, on April 14, 2003, CBK Power filed a claim for refund of its excess final withholding taxes allegedly erroneously
withheld and collected.
RULING:
NO. The Court held that the obligation to comply with a tax treaty must take precedence over the objective of RMO No. 1-
2000. Bearing in mind the rationale of tax treaties, the period of application for the availment of tax treaty relief as required
by RMO No. 1-2000 should not operate to divest entitlement to the relief as it would constitute a violation of the duty
required by good faith in complying with a tax treaty. The denial of the availment of tax relief for the failure of a taxpayer to
apply within the prescribed period under the administrative issuance would impair the value of the tax treaty. At most, the
application for a tax treaty relief from the BIR should merely operate to confirm the entitlement of the taxpayer to the relief.
Gutierrez v. Gutierrez
GR 34840, September 23, 1931
Per J. Malcolm

WHAT HAVE WE LEARNED ABOUT THE TOPIC?

Civil liability co-exists with criminal responsibility in negligence, there are two option, culpa criminal under Article 100 of RPC
and an action for recovery of damages based on Culpa aquiliana under Article 2177 of Civil code. The two concepts of
faults are so distinct from each other that exoneration from one does not result in exoneration from the other. They can be
prosecuted separately.

ISSUE:
How should civil liability be imposed upon the parties in the present case?
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 Abelardo Velasco, and was owned by Saturnine Cortez. The automobile was
being operated by Bonifacio Gutierrez, a guy,18 years of age, and was owned by his parents, 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. 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 fractured right leg which required medical attendance for a considerable period of time.
RULING: Bonifacio Gutierrez’s obligation arises from culpa aquiliana while Saturnino Cortez’s and his driver Abelardo
Velasco’s obligation rise from culpa contractual. Bonifacio was an incompetent driver, 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. Here, 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.
Philippine Banking v. Lui She
GR L-17587, September 12, 1967
Per J. Castro

WHAT HAVE WE LEARNED ABOUT THE TOPIC?

ART.1196 of the Civil code when a period is designated for the performance or fulfillment of an obligation, it is presumed to
have been established for the benefit of both creditor and debtor. The creditor cannot demand the performance of the
obligation before the expiration of the designated period, neither can the debtor perform the obligation before the
expiration of such period.

WHAT DOES THE CASE TEACH US?

ISSUE: Whether or not the provisions of contract makes it invalid?
FACTS: Justina Santos executed on a contract of lease in favor of Wong, covering the portion then already leased to him
and another portion fronting Florentino Torres street. The lease was for 50 years, although the lessee was given the right to
withdraw at any time from the agreement.
On December 21 she executed another contract giving Wong the option to buy the leased premises for P120,000, payable
within ten years at a monthly installment of P1,000. The option, written in Tagalog, imposed on him the obligation to pay for
the food of the dogs and the salaries of the maids in her household, the charge not to exceed P1,800 a month. It appears,
however, that this application for naturalization was withdrawn when it was discovered that he was not a resident of Rizal.
On October 28, 1958 she filed a petition to adopt him and his children on the erroneous belief that adoption would confer
on them Philippine citizenship. The error was discovered and the proceedings were abandoned. In two wills executed on
August 24 and 29, 1959, she bade her legatees to respect the contracts she had entered into with Wong, but in a codicil of
a later date (November 4, 1959) she appears to have a change of heart. Claiming that the various contracts were made
by her because of machinations and inducements practiced by him, she now directed her executor to secure the
annulment of the contracts.
HELD: No, the contracts show nothing that is necessarily illegal, but considered collectively. So is an option giving an alien
the right to buy real property on condition that he is granted Philippine citizenship.
But if an alien is given not only a lease of, but also an option to buy, a piece of land, by virtue of which the Filipino owner
cannot sell or otherwise dispose of his property, this to last for 50 years, then it becomes clear that the arrangement is a
virtual transfer of ownership whereby the owner divests himself in stages not only of the right to enjoy the land but also of the
right to dispose of it— rights the sum total of which make up ownership. Also at any rate, even if no term had been fixed in
the agreement, this case would at most justify the fixing of a period but not the annulment of the contract.

The case of Singson Encarnacion v. Baldomar cannot be cited in support of the claim of want of mutuality, because of a
difference in factual setting. In that case, the lessees argued that they could occupy the premises as long as they paid the
rent. This is of course untenable, for as this Court said, "If this defense were to be allowed, so long as defendants elected to
continue the lease by continuing the payment of the rentals, the owner would never be able to discontinue it; conversely,
although the owner should desire the lease to continue the lessees could effectively thwart his purpose if they should prefer
to terminate the contract by the simple expedient of stopping payment of the rentals." Here, in contrast, the right of the
lessee to continue the lease or to terminate it is so circumscribed by the term of the contract that it cannot be said that the
continuance of the lease depends upon his will. At any rate, even if no term had been fixed in the agreement, this case
would at most justify the fixing of a period but not the annulment of the contract.
PNB v. Independent Planters
GR L-11311, May 28, 1958
Per J. Ortega

WHAT HAVE WE LEARNED ABOUT THE TOPIC?

Article 1216 grants the creditor the substantive right to seek satisfaction of his credit from one, some or all of his solidary
debtors for the prosecution of his interest. The choice is undoubtedly left to the solidary creditor to determine against whom
he will enforce collection and in case of death of one of the solidary debtor the creditor may if he chooses proceed
against the surviving solidary debtor without necessity of filing claim in the estate of the deceased debtors.

Issue:
WON the action for collection of a sum of money based on contract against all the solidary debtors, the death of one
defendant deprives the court of jurisdiction to proceed with the case against the surviving defendants?
Facts:
PNB assails the order of the dismissal of the lower court dismissing its complaint against several solidary debtors on the
ground that one of the defendants died during the pendency of the case and therefore the complaint being a money
claim based on contract should be prosecuted in the estate and intestate proceeding for the settlement of the estate of
deceased.
HELD:
No. It is now settled that the quoted Article 1216 grants the creditor the substantive right to seek satisfaction of his credit
from one, some or all of his solidary debtors, as he deems fit or convenient for the protection of his interests; and if, after
instituting a collection suit based on contract against some or all of them and, during its pendency, one of the defendants
dies, the court retains jurisdiction to continue the proceedings and decide the case in respect of the surviving defendants.
Article 1216 of the New Civil Code would, in effect, be repealed since under the Rules of Court, petitioner has no choice
but to proceed against the estate of Manuel Barredo only. Obviously, this provision diminishes the Bank's right under the
New Civil, Code to proceed against any one, some or all of the solidary debtors. Such a construction is not sanctioned by
the principle, which is too well settled to require citation, that a substantive law cannot be amended by a procedural rule.
Otherwise stared, Section 6, Rule 86 of the Revised Rules of Court cannot be made to prevail over Article 1216 of the New
Civil Code, the former being merely procedural, while the latter, substantive.

Pamintuan v. CA
GR L-26339, December 14, 1979
Per J. Aquino

WHAT HAVE WE LEARNED FROM THE TOPIC?

In case of fraud the difference between the proven damages and the stipulated penalty may be recovered. The proven
damages supersede the stipulated liquidated damages. The second sentence of article 1226 itself provides that I
nevertheless, damages shall be paid if the obligor ... is guilty of fraud in the fulfillment of the obligation". "Responsibility arising
from fraud is demandable in all obligations" (Art. 1171, Civil Code). "In case of fraud, bad faith, malice or wanton attitude,
the obligor shall be responsible for an damages which may be reasonably attributed to the non-performance of the
obligation"

ISSUE:
WON Pamintuan can be made liable only for liquidated damages and on account of the rule that the penalty shall
substitute the indemnity for damages?
FACTS:
This is about the recovery compensatory, damages of breach of a contract of sale in addition to the liquidated damages.
Pamintuan and Yu Ping Kun were business partners. Pamintuan was a license barter who export corn flakes to Japan in
exchange of plastic sheetings. Yu Ping Kun complains in violation of their contract because although plastic sheetings were
delivered on the proper time and place. The quality of materials and overpricing the same violates their agreement.
HELD:
No, for actual damages only. Pamintuan relies on the rule that a penalty and liquidated damages are the same ,that "in
obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests in case
of non-compliance, if there is no stipulation to the contrary and, it is argued, there is no such stipulation to the contrary in
this case and that "liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach
thereof.” After a conscientious consideration of the facts of the case, as found by Court of Appeals and the trial court, and
after reflecting on the tenor of the stipulation for liquidated damages herein, the true nature of which is not easy to
categorize, we further hold that justice would be adequately done in this case by allowing Yu Ping Kun Co., Inc. to recover
only the actual damages proven and not to award to it the stipulated liquidated damages of ten thousand pesos for any
breach of the contract. The proven damages supersede the stipulated liquidated damages.
Rivera v. Spouses Chua
GR 184458, January 14, 2015
Per J. Perez

WHAT HAVE WE LEARNED FROM THE TOPIC?

Article 1169 of NCC explicitly provides that the demand by the creditor shall not be necessary in order that delay may exist
when the obligation or the law expressly so declare. It is not sufficient that the law or obligation fixes a date for
performance; it must further state expressly that after the period lapses, default will commence.

ISSUE:
Whether or not a demand from spouses Chua is needed to make Rivera liable.
FACTS:
Rivera and Spouses Chua were friends and kumpadres. Rivera obtained a loan from the Spouses Chua evidenced by a
Promissory Note agreeing to pay the amount of Php120,000.00 on December 31, 1995 and a 5% interest monthly from the
date of default until the entire obligation is fully paid for. Three years from the date of payment stipulated in the promissory
note, Rivera issued and delivered to Spouses Chua two (2) checks but upon presentment for payment, the two checks
were dishonored for the reason “account closed.” The Spouses Chua alleged that they have repeatedly demanded
payment from Rivera to no avail. On the other hand, Rivera claimed forgery of the Promissory Note and denied his
indebtedness thereunder and that there was no demand for payment of the amount of P120,000.00 prior to the
encashment of the checks.
HELD:
No, a demand from spouses Chua is not needed to make Rivera liable. Here, the clause in the Promissory Note expressly
requires Rivera to pay a 5% monthly interest from the “date of default” until the entire obligation is fully paid for. Rivera and
Spouses Chua evidently agreed that the maturity of the obligation at a date certain, 31 December 1995, will give rise to the
obligation to pay interest. Even without the demand from Spouses Chua, it is understood that Rivera should perform in the
date stated in the obligation, therefore making her liable.

Sanico v. Colipano
GR 209969, September 27, 2017
Per J. Caguioa

WHAT HAVE WE LEARNED FROM THE TOPIC?

Article 1170 of the Civil Code provides that those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. Contravening
the tenor of the obligation includes any illicit act or omission which impairs the strict and faithful fulfillment of the obligation
and every kind of defective performance.

Issue:
Whether or not Sanico is liable for damages?
Facts:
Colipano and her daughter were paying passengers in the jeepney operated by Sanico, which was driven by Castro.
Colipano was made to sit on an empty beer case at the edge of the rear entrance/exit of the jeepney with her sleeping
child on her lap. At an uphill incline, the jeepney slid backwards and Colipano pushed both her feet against the step board
but the step board was wet and her left foot slipped and got crushed between the step board and a coconut tree which
the jeepney bumped. Colipano’s leg was badly injured and was eventually amputated.
RULING:
Here, making Colipano sit on the empty beer case was a clear showing of how Sanico contravened the tenor of his
obligation to safety transport Colipano from the place of departure to the place of destination as far as human care and
foresight can provide. Therefore, Sanico is liable for damages. Since the cause of action is based on a breach of a contract
of carriage, the liability of Sanico is direct as the contract is between him and Colipano. Castro, being merely the driver of
Sanico's jeepney, cannot be made liable as he is not a party to the contract of carriage. Since Castro was not a party to
the contract of carriage, Colipano had no cause of action against him and the pomplaint against him should be dismissed.
Although he was driving the jeepney, he was a mere employee of Sanico, who was the operator and owner of the
jeepney. The obligation to carry Colipano safely to her destination was with Sanico. In fact, the elements of a contract of
carriage existeid between Colipano and Sanico: consent, as shown when Castro, as employee of Sanico, accepted
Colipano as a passenger when he allowed Colipano to board the jeepney, and as to Colipano, when she boarded the
jeepney; cause or consideration, when Colipano, for her part, paid her fare; and, object, the transportation of Colipano
from the place of departure to the place of destination.