ESTANISLAO and AFRICA SINAMBAN, petitioners, vs.

CHINA BANKING
CORPORATION, respondent
G.R. No. 193890
March 11, 2015
The spouses Danilo and Magdalena Manalastas (spouses Manalastas) executed
a Real Estate Mortgage (REM) in favor of respondent China Banking
Corporation (Chinabank) over two real estate properties to secure a loan from
Chinabank as working capital in their rice milling business. During the next few
years, they executed several amendments to the mortgage contract
progressively increasing their credit line secured by the aforesaid mortgage. The
spouses Manalastas executed several promissory notes (PNs) in favor of
Chinabank. In two of the PNs, petitioners Estanislao and Africa Sinamban
(spouses Sinamban) signed as co-makers. Chinabank filed a Complaint for sum
of money against the spouses Manalastas and the spouses Sinamban
(collectively called the defendants) before the RTC. The complaint alleged that
they reneged on their loan obligations under the PNs which the spouses
Manalastas executed in favor of Chinabank on different dates. They averred that
they do not recall having executed two PN's and had no participation in the
execution of one of the PN. They however admitted that they signed some PN
forms as co-makers upon the request of the spouses Manalastas who are their
relatives; although they insisted that they derived no money or other benefits
from the loans. They denied knowing about the mortgage security provided by
the spouses Manalastas, or that the latter defaulted on their loans. They also
refused to acknowledge the loan deficiency of P1,758,427.87 on the PNs,
insisting that the mortgage collateral was worth more than P10,000,000.00,
enough to answer for all the loans, interests and penalties. They also claimed
that they were not notified of the auction sale, and denied that they knew about
the Certificate of Sale and the Statement of Account and insisted that Chinabank
manipulated the foreclosure sale to exclude them therefrom. By way of
counterclaim, the Spouses Sinamban prayed for damages and attorney's fees of

25%, plus litigation expenses and costs of suit

Issue:
Ruling
if a person binds himself solidarily with the principal debtor, the provisions of
Articles 1207 to 1222 of the Civil Code (Section 4, Chapter 3, Title I, Book IV) on
joint and solidary obligations shall be observed. Thus, where there is a
concurrence of two or more creditors or of two or more debtors in one and the
same obligation, Article 1207 provides that among them, "[t]here is a solidary
liability only when the obligation expressly so states, or when the law or the
nature of the obligation requires solidarity." It is settled that when the obligor or
obligors undertake to be "jointly and severally" liable, it means that the obligation
is solidary. 39 In this case, the spouses Sinamban expressly bound themselves
to be jointly and severally, or solidarily, liable with the principal makers of the
PNs, the spouses Manalastas Article 1216 of the Civil Code provides that "[t]he
creditor may proceed against any one of the solidary debtors or some or all of
them simultaneously. The demand made against one of them shall not be an
obstacle to those which may subsequently be directed against the others, so long
as the debt has not been fully collected." Article 1252 42 of the Civil Code does
not apply, as urged by the petitioners, because in the said article the situation
contemplated is that of a debtor with several debts due, whereas the reverse is
true, with each solidary debt imputable to several debtors. ut as the Court has
noted, by deducting the auction proceeds from the aggregate amount of the three
loans due, Chinabank in effect opted to apply the entire proceeds of the auction
simultaneously to all the three loans. This implies that each PN will assume a pro
rata portion of the resulting deficiency on the total indebtedness as bears upon
each PN's outstanding balance. Contrary to the spouses Sinamban's insistence,
none of the three PNs is more onerous than the others to justify applying the
proceeds according to Article 1254 of the Civil Code,in relation to Articles 1252
and 1253. 44 Since each loan, represented by each PN, was obtained under a
single credit line extended by Chinabank for the working capital requirements of

the spouses Manalastas' rice milling business, which credit line was secured also
by a single REM over their properties, then each PN is simultaneously covered
by the same mortgage security, the foreclosure of which will also benefit them
proportionately. No PN enjoys any priority or preference in payment over the
others, with the only difference being that the spouses Sinamban are solidarily
liable for the deficiency on two of them.

(Spouses Chin Kong Wong Choi v. United Coconut Planters Bank,

G.R. No. 207747,
[March 11, 2015])

Petitioner spouses Chin Kong Wong Choi and Ana O. Chua (Spouses Choi)
entered into a Contract to Sell with Primetown Property Group, Inc. (Primetown),
The Contract to Sell provided that Spouses Choi agreed to buy condominium
iniener Hills Cebu (Kiener) from Primetown for a consideration of P1,151,718.75,
with a down payment of P100,000.00 and the remaining balance payable in 40
equal monthly installments of P26,292.97
Rspondent United Coconut Planters Bank (UCPB), executed a Memorandum of
Agreement and Sale of Receivables and Assignment of Rights and Interests
(Agreement) with Primetown. The Agreement provided that Primetown, in
consideration of P748,000,000.00, "assigned, transferred, conveyed and set over
unto UCPB all Accounts Receivables accruing from Primetown's Kiener together
with assignment of all its rights, titles, interests and participation over the units
covered by or arising from the Contracts to Sell from which the Accounts
Receivables have arisen." Included in the assigned accounts receivable was the
account of Spouses Choi, who proved payment of one monthly amortization to
UCPB. 11 April 2006, the Spouses Choi filed a complaint for refund of money
with interest and damages against Primetown and UCPB before the Housing and

Land Use Regulatory Board (HLURB) Regional Field Office No. VI (RFO VI).
Spouses Choi alleged that despite their full payment of the purchase price,
Primetown failed to finish the construction of Kiener and to deliver the
condominium unit to them.

Issue: Whether or not UCPB and Primetown are solidarily liable for damages.

Ruling:
the Agreement between Primetown and UCPB provided that Primetown, in
consideration of P748,000,000.00, "assigned, transferred, conveyed and set
over unto [UCPB] all Accounts Receivables accruing from Primetown's Kiener
together with the assignment of all its rights, titles, interests and
participation over the units covered by or arising from the Contracts to Sell from
which the Accounts Receivables have arisen.The Agreement further stipulated
that "is sale/assignment is limited to the Receivables accruing to [Primetown]
from the buyers of the condominium units in Kiener the rsponding Assignment
of Rights and Interests arising from the pertinent Contract to Sell and does not
include except for the amount not exceeding 30,000,000.00, Philippine
currency, either singly or cumulatively any and all liabilities which
[Primetown] may have assumed under the individual Contract to Sell.
The Memorandum of Agreement's whereas clauses provided that Primetown
desired to settle its obligation with UCPB. Therefore, the tenor of the Agreement
is clearly in favor of UCPB. Considering that UCPB is a mere assignee of the
rights and receivables under the Agreement, UCPB did not assume the
obligations and liabilities of Primetown under its contract to sell with Spouses
Choi. Since there is no other ground to hold UCPB solidarily liable with
Primetown and there is no reason to depart from the ratio decidendi in UCPB v.
Ho, UCPB is only liable to refund Spouses Choi the amount it indisputably
received, which is P26,292.97 based on the evidence presented by Spouses
Choi.

Swire Realty Development Corp. v. Yu,

G.R. No. 207133,
[March 9, 2015])

Respondent Jayne Yu and petitioner Swire Realty Development Corporation

entered into a Contract to Sell covering one residential condominium unit in
Makati City for the total contract price of P7,519,371.80, payable in equal
monthly installments. Respondent likewise purchased a parking slot in the same
condominium building for P600,000.00.
The rndent paid the full purchase price of P7,519,371.80 for the unit while
making a down payment of P20,000.00 for the parking lot. However,
notwithstanding full payment of the contract price, petitioner failed to complete
and deliver the subject unit on time. This prompted respondent to file a Complaint
for Rescission of Contract with Damages before the Housing and Land Use
Regulatory Board (HLURB) Expanded National Capital Region Field Office
(ENCRFO). the HLURB ENCRFO rendered a Decision dismissing respondent's
complaint. It ruled that rescission is not permitted for slight or casual breach of
the contract but only for such breaches as are substantial and fundamental as to
defeat the object of the parties in making the agreement.
Issue:
Whether or not rescission of the contract is proper in the instant case.

Ruling:

Basic is the rule that the right of rescission of a party to an obligation under
Article 1191 of the Civil Code is predicated on a breach of faith by the other party
who violates the reciprocity between them. The breach contemplated in the said

provision is the obligor's failure to comply with an existing obligation. When the
obligor cannot comply with what is incumbent upon it, the obligee may seek
rescission and, in the absence of any just cause for the court to determine the
period of compliance, the court shall decree the rescission. it is evident that the
report on the ocular inspection conducted on the subject condominium project
and subject unit shows that the amenities under the approved plan have not yet
been provided as of May 3, 2002, and that the subject unit has not been
delivered to respondent as of August 28, 2002, which is beyond the period of
development of December 1999 under the license to sell. Incontrovertibly,
petitioner had incurred delay in the performance of its obligation amounting to
breach of contract as it failed to finish and deliver the unit to respondent within
the stipulated period. The delay in the completion of the project as well as of the
delay in the delivery of the unit are breaches of statutory and contractual
obligations which entitle respondent to rescind the contract, demand a refund
and payment of damages.

Unknown Owner of the Vessel M/V China Joy v. Asian Terminals, Inc.,
G.R. No. 195661 (Resolution),
[March 11, 2015])

Under the Charter Party Agreement over M/V "China Joy," ContiQuincyBunge
represented itself as the Charterer of the Vessel, with San Miguel Foods, Inc. as
Co-Charterer, and defendant [Samsun] represented itself as the Agent of the
Shipowners. Samsun is a foreign corporation not doing business in the
Philippines. On 3 February 1997[,] ATI used its Siwertell Unloader No. 2 to
unload the soybean meal from the Vessel's Hold No. 2. The Siwertell Unloader is
a pneumatic vacubator that uses compressed gas to vertically move heavy bulk
grain from within the hatch of the ship in order to unload it off the ship. DcHaET
The unloading operations were suddenly halted when the head of Unloader No. 2

hit a flat low-carbon or "mild" steel bar measuring around 8 to 10 inches in length,
4 inches in width, and 1 1/4 inch in thickness that was in the middle of the mass
of soybean meal. The flat steel bar lodged itself between the vertical screws of
Unloader No. 2, causing portions of screw numbers 2 and 3 to crack and be
sheared off under the torsional load.
According to the quotation of BMH Marine AB Sweden, the sole manufacturer of
Siwertell unloaders, the replacement cost of each screw is US$12,395.00 or
US$24,790.00 for the 2 screws plus freight. The labor cost to remove and reassemble the screws is estimated at US$2,000.00. ATI sent a Note of Protest to
the Master of the Vessel for the damages sustained by its unloading equipment
as a result of encountering the flat steel bar among the soybean meal. However,
the Vessel's Master wrote a note on the Protest stating that it is not responsible
for the damage because the metal piece came from the cargo and not from the
vessel itself.Defendants argued that since the metal foreign object was found in
the middle of the cargo, it could not have come from the bottom of the hatch
because the hatch had been inspected and found clean prior to loading.
Defendants further averred that neither could the metal bar have been part of the
Vessel that had broken off and fallen into the hatch because tests conducted on
the metal piece revealed that said metal bar was not part of the
Vessel.Defendants concluded that the metal bar could only have been already
co-mingled with the soybean meal upon loading by ContiQuincyBunge at
loadport, and, therefore, defendants are not liable for the damages sustained by
the unloader of ATI.
Issue: Whether or not tere is no contract of carriage
between the petitioners and ATI
Ruling:
There is no contract of carriage between ATI, on one hand, and the shipowner,
Samsun, ContiQuincyBunge L.L.C., and Inter-Asia, on the other. It likewise bears
stressing that the subject of the complaint, from which the instant petition arose,
is not the damage caused to the cargo, but to the equipment of an arrastre

operator. Further, ATI's contractual relation is not with the petitioners, but with the
consignee and with the Philippine Ports Authority (PPA).
In Insurance Company of North America v. Asian Terminals, Inc., 30 the Court
explained that the liabilities of the arrastre operator for losses and damages are
set forth in the contract for cargo handling services it had executed with the PPA.
Corollarily then, the rights of an arrastre operator to be paid for damages it
sustains from handling cargoes do not likewise spring from contracts of
carriage.However, in the instant petition, the contending parties make no
references at all to any provisions in the contract for cargo handling services ATI
had executed with the PPA.

ONOFRE V. MONTERO, EDGARDO N. ESTRAERO, RENING P. PADRE,

GABRIEL A. MADERA, HERMINIO T. TACLA, NELSON C. VILORIA,
DEMETRIO Q. PAJARILLO, ALFREDO R. AGANON, REYNALDO AVILA,
ALBERT T. RUIZ, NESTOR Y. YAGO, HARTY M. TUPASI, AGUSTIN R. AVILA,
JR. or MARCOS R. AVILA, BONIFACIO B. GAANO, JOSELITO D. CUENTA,
JONAS P. ESTILONG, DOMINADOR C. CANARIA, GENARO C. RONDARIS,
HERARDO M. DULAY, FRANKLIN A. RAVINA, JR., and RUBEN C. CABELLO,
petitioners, vs. TIMES TRANSPORTATION CO., INC., and SANTIAGO
RONDARIS, MENCORP TRANSPORT SYSTEMS, INC., VIRGINIA R.
MENDOZA and REYNALDO MENDOZA, respondents.
G.R. No. 190828.
March 16, 2015.

Respondent Times Transportation Co., Inc., (TTCI) is a company engaged in the

business of land transportation for passengers and goods serving the Ilocos
Region to Metro Manila route. TTCI employed the herein 21 petitioners as bus
drivers, conductors, mechanics, welders, security guards and utility personnel.

Sometime in 1995, the rank-and-file employees of TTCI formed a union named

as Times Employees Union (TEU) which was later certified as the sole and
exclusive bargaining unit within TTCI. The sale of 25 buses of TTCI, as well as
the Certificates of Public Convenience for the operation of the buses, were
likewise approved and subsequently transferred to respondent Mencorp
Transport Systems, Inc., (MENCORP) by virtue of a Deed of Sale dated
December 12, 1997. Thereafter, several union members received notices that
they were being retrenched effective 30 days from September 16, 1997.
Four years later, several complaints for unfair labor practice, illegal dismissal with
money claims, damages and attorney's fees were filed against TTCI.
In response, TTCI asserted that the petitioners' cause of action had already been
barred by prescription because the complaints were filed only in June 2002 or
after almost five years from the date of their dismissal. MENCORP, on the other
hand, raised the defense of lack of employer-employee relationship since it never
engaged the services of the petitioners when TTCI sold to them its buses and the
Certificates of Public Convenience.
Issue
Whether or not the petitioners' complaints for illegal dismissal have already
prescribed
Ruling
In the case at bar, October 26, 1997 and November 24, 1997 appear on record to
be the dates when the petitioners' employment were terminated by TTCI. The
antecedent facts that gave rise to the petitioners' dismissal from employment are
not disputed in this case. There is no question about the fact that the petitioners'
complaints for unfair labor practice and money claims have already prescribed.
The petitioners however argue that their complaints for illegal dismissal were duly
filed within the four-year prescriptive period since the period during which their
cases were pending should be deducted from the period of prescription. A
prudent review of the antecedents of the claim reveals that it has in fact
prescribed due to the petitioners' withdrawal of their labor case docketed as

NLRC RAB-I-01-1007. 40 Hence, while the filing of the said case could have
interrupted the running of the four-year prescriptive period, the voluntary
withdrawal of the petitioners effectively cancelled the tolling of the prescriptive
period within which to file their illegal dismissal case, leaving them in exactly the
same position as though no labor case had been filed at all. The running of the
four-year prescriptive period not having been interrupted by the filing of NLRC
RAB-I-01-1007, the petitioners' cause of action had already prescribed in four
years after their cessation of employment on October 26, 1997 and November
24, 1997. Consequently, when the petitioners filed their complaint for illegal
dismissal, separation pay, retirement benefits, and damages in 2002, their claim,
clearly, had already been barred by prescription.
Sadly, the petitioners have no one but themselves to blame for their own
predicament. By their own allegations in their respective complaints, they have
barred their remedy and extinguished their right of action.
G.R. No. 167134. March 18, 2015.]
COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. TRADERS ROYAL
BANK, respondent.

Commissioner of Internal Revenue v. Traders Royal Bank

G.R. No. 167134
March 18, 2015