Professional Documents
Culture Documents
- The Court of Appeals denied petitioner's motion for The decision of the CA is REVERSED insofar as it ordered the
reconsideration. Hence this petition. petitioner to immediately vacate the leased premises, without
prejudice, however, to the filing by the private respondents of
ISSUES an action for the recovery of possession of the subject
property.
1. WON the parties intended an automatic renewal of the
lease contract when they agreed that the lease shall be for a
period of fifteen years "subject to renewal for another ten (10)
years."
HELD
Country Bankers Insurance Corp. v. CA GR 85161, Sep.
11, 1991 The CA cor- rectly sustained the trial court in holding that the
bond shall and may answer only for damages which OVEC
FACTS: Lessor Ventanilla and Lessee Sy, entered into a lease may suffer as a result of the injunction. The arrears in rental,
agreement over a theater. The lease was for six years. After the unremit- ted amounts of the amusement tax delinquency,
more than two years of the operation of the theaters, the amount of P100,000 (P10,000 portions of each monthly
Ventanilla made demands for the repossession of the leased rental which were not deducted from plaintiffs cash deposit
properties in view of Sys arrears in monthly rentals and non- from Feb. to Nov. 1980 after the forfeiture of said cash deposit
payment of amusement taxes. In pursuance of their latter on Feb. 11, 1980) and attorneys fees which were all charged
agreement, Sys arrears in rental in the amount of P125,445 against Sy were correct and considered by the CA as damages
was reduced to P71,028. which OVEC sustained not as a result of the injunction.
Finally, the court held Sy thru the injunction bond liable to pay
P10,000 every month from Feb. to Nov. 1980. The amount
represents the supposed increase in rental from P50,000 to
P60,000 in view of the offer of someone to lease the three
theat- ers involved for P60,000 a month. The Court of Appeals
(CA) sustained the trial court.
HELD: The Supreme Court affirmed the CAs decision and held
that inasmuch as the forfeiture clause provides that the
deposit shall be deemed forfeited, without prejudice to any
other obligation still owing by the lessee to the lessor, the
penalty cannot substitute for the P100,000 supposed damage
resulting from the issuance of the injunction against the
P29,000 remain- ing cash deposit.
This opportunity cost which was duly proven before the trial
court, was correctly made chargeable by the said court
against the injunction bond posted by CISCO. The undertaking
assumed by CISCO under subject injunction refers to all such
damages as such party may sustain by reason of the PONCE DE LEON V SYJUCO
injunction if the Court should finally decide that the Plaintiff
was not entitled thereto.
FACTS: the consignation have been given to the person interested in
1. Philippine National Bank, was the owner of two parcels of the performance of the obligation;
land in Negros Occidental. On March 9, 1936 the Bank (4) that the amount due was placed at the disposal of the
executed a contract to sell the said properties to Jose Ponce court; and (5) that after the consignation had been made the
de Leon for the total price of P26,300. person interested was notified thereof.
2. Ponce de Leon obtained a loan from Santiago Syjuco, Inc., In the instant case, while it is admitted a debt
in the amount of P200,000 in Japanese Military Notes, payable existed, that the consignation was made because of the
within 1 year. It was also provided in said promissory note that refusal of the creditor to accept it, and the filing of the
Ponce de Leon could not pay, and Syjuco could not demand, complaint to compel its acceptance on the part of the creditor
the payment of said note except within the aforementioned can be considered sufficient notice of the consignation to the
period. To secure the payment of said obligation, Ponce de creditor, nevertheless, it appears that at least two of the
Leon mortgaged in favor of Syjuco the parcels of land which above requirements have not been complied with.
he agreed to purchase from PNB.
it appears that plaintiff, before making the consignation with
3. May 6, 1944: Ponce de Leon paid the Bank of the balance of the clerk of the court, failed to give previous notice thereof to
the purchase price amounting to P23,670 in Japanese Military the person interested in the performance of the obligation. It
notes and, on the same date, the Bank executed in favor of also appears that the obligation was not yet due and
Ponce de Leon, a deed of absolute sale of the aforementioned demandable when the money was consigned.
parcels of land.
it cannot be contended that plaintiff is justified in
4. July 31, 1944: Ponce de Leon obtained an additional loan accelerating the payment of the obligation because he was
from Syjuco in the amount of P16,000 in Japanese Military willing to pay the interests due up to the date of its maturity,
notes and executed a promissory note similar to the previous because in a monetary obligation contracted with a period,
one. the presumption is that the same is deemed constituted in
favor of both the creditor and the debtor unless from its tenor
5. October, 1944: Ponce de Leon tendered to Syjuco the or from other circumstances it appears that the period has
amount of P254,880 in Japanese military notes as full been established for the benefit of either one of them. No
payment of his debt. The amount tendered included the such exemption or special circumstance exists.
interest up to the time of the tender plus all the interest up to
May 5, 1948. Ponce de Leon also wrote to Syjuco a letter It may be argued that the creditor has nothing to lose but
tendering the payment of his indebtedness, including interests everything to gain by the acceleration of payment of the
up to May 5, 1948, Syjuco, however, refused to accept such obligation because the debtor has offered to pay all the
repeated tenders. interests up to the date it would become due, but this
argument loses force if we consider that the payment of
6. Because of Syjucos refusal to accept the payment, Ponce interests is not the only reason why a creditor cannot be
de Leon deposited with CFI Manila the amount of P254,880 forced to accept payment contrary to the stipulation. Unless
and filed a complaint consigning the amount so deposited to the creditor consents, the debtor has no right to accelerate
Syjuco. However, the records of this case were destroyed by the time of payment even if the premature tender "included
the war. an offer to pay principal and interest in full.
-On May 7, 1958, PSED filed a complaint against J. M. Tuason The contract shows that the parties were fully aware that the
& Co, Inc., and GAI in CFI Manila, seeking to compel the latter land described was occupied by squatters. As the parties must
to comply with their obligation and/or to pay damages in the have known that they could not take the law into their own
event they failed or refused to perform the obligation. hands and must resort to legal processes in evicting the
squatters, they must have realized that the duration of the
- Both defendants answered the complaint with GAI setting up suits to be brought would not be under their control nor could
the principal defense that the action was premature since its the same be determined in advance. The conclusion is thus
obligation to construct the streets in question was without a forced that the parties must have intended to defer the
definite period which needs to be fixed first by the court in a performance of the obligations under the contract until the
proper suit for that purpose before a complaint for specific squatters were duly evicted, as contended by the petitioner
performance will prosper. GAI.
ISSUE: WON the trial court and the CA erred in setting the
date for the performance of the contract
-Granting, however, that it lay within the Court's power to fix Facts: A Construction and Service Agreement was concluded
the period of performance, still the amended decision is by Nicencio Tan Quiombing and Dante Biscocho, as the First
defective in that no basis is stated to support the conclusion Party, jointly and severally bound themselves to construct a
that the period should be set at two years after finality of the house for private respondents Francisco and Manuelita Saligo,
as the Second Party, for the contract price of P137,940.00, ISSUE: WON Inciong and Pantanosas can be held liable with
which the latter agreed to pay. Manuelita Saligo then, in a Naybe, who allegedly employed fraud and misrepresentation
second agreement, acknowledge the completion of the project
and promised to pat plaintiffs the stipulated amount on or HELD: Yes. The stated points are factual, which should be
before December 31, 1984. On October 9, 1986, Quiombing determined in the lower court not in this court.
filed a complaint for recovery of the said amount, plus charges
and interests. Saligo, instead of filing an Answer, moved to - By alleging fraud in his answer, petitioner was in the right
dismiss the complaint contending that Biscocho was an direction towards proving that he agreed to a loan of P5k only.
indispensable party and therefore should have been included However, fraud must be established by clear and convincing
as a co-plaintiff.. The RTC dismissed the complaint. The CA evidence. Mere preponderance of evidence is not adequate -
upheld the RTC ruling. On his argument that since the complaint against Naybe was
dismissed, his should be dismissed as well: It is to be noted,
Issue: May one of the two solidary creditors sue by himself however, that petitioner signed the promissory note as a
alone for the recovery of amounts due to both of them without solidary co-maker and not as a guarantor. While a guarantor
joining the other creditor as a co-plaintiff? may bind himself solidarily with the principal debtor, the
liability of a guarantor is different from that of a solidary
Held: Yes. A solidary obligation is one in which each debtor is debtor
liable for the entire obligation, and each creditor is entitled to
demand the whole obligation; each creditor may enforce the When there are two or more debtors in one and the same
entire obligation, and each debtor may be obliged to pay it in obligation, the presumption is that the obligation is joint so
full. that each of the debtors is liable only for a proportionate part
of the debt. There is a solidarily liability only when the
The essence of active solidarity consists in the authority of obligation expressly so states, when the law so provides or
each creditor to claim and enforce the rights of all, with the when the nature of the obligation so requires.
resulting obligation of paying every one what belongs to him;
there is no merger, much less a renunciation of rights, but A solidary or joint and several obligation is one in which each
only mutual representation. debtor is liable for the entire obligation, and each creditor is
entitled to demand the whole obligation.
It would follow from these observations that the question of
who should sue the private respondents was a personal issue - Because the promissory note involved in this case expressly
between Quiombing and Biscocho in which the spouses Saligo states that the three signatories therein are jointly and
had no right to interfere; hence, it was not necessary for both severally liable, any one, some or all of them may be
Quiombing and Biscocho to file the complaint. Inclusion of proceeded against for the entire obligation
Biscocho as a co-plaintiff, when Quiombing was competent to
sue by himself alone, would be a useless formality. - The choice is left to the solidary creditor to determine
against whom he will enforce collection.
Article 1212 of the Civil Code provides:
(Tolentino) explains: "A guarantor who binds himself in
Each one of the solidary creditors may do whatever may be solidum with the principal debtor under the provisions of the
useful to the others, but not anything which may be prejudice second paragraph does not become a solidary co-debtor to all
to the latter. intents and purposes. There is a difference between a solidary
co- debtor, and a fiador in solidum (surely). The later, outside
Suing for the recovery of the contract price is certainly a of the liability he assumes to pay the debt before the property
useful act that Quiombing could do by himself alone. If of the principal debtor has been exhausted, retains all the
Quiombing eventually collects the amount due from the other rights, actions and benefits which pertain to him by
solidary debtors, Biscocho may later claim his share thereof. reason of the fiansa; while a solidary co-debtor has no other
As far as respondents are concerned, payment of the rights than those bestowed upon him in Section 4, Chapter 3,
judgment debt to the complainant will be considered payment title 1, Book IV of the Civil Code.
to the other solidary creditor even if the latter was not a party -
to the suit.
6. Inciong v CA
- Art 1144: "A creditor may sue any of the joint and several
(solidarios) debtors or all of them simultaneously. The claims
instituted against one shall not be an obstacle for those that
may be later presented against the others, as long as it does
not appear that the debt has been collected in full."
- Hermenegilda Rogero, and her estate after her death, was Sometime in July 1990, petitioner Continental Cement
liable absolutely for the whole obligation, under section 698 of Corporation (CCC), a corporation engaged in the business of
the Code of Civil Procedure; and if the claim had been duly producing cement, obtained the services of respondents Asea
presented to the committee for allowance it should have been Brown Boveri, Inc. (ABB) and BBC Brown Boveri, Corp. to
allowed, just as if the contract had been with her alone. repair its 160 KW Kiln DC Drive Motor (Kiln Drive Motor).
Andal was not able to build the house, and sold the same to
Juan Carlos n January 18, 1960. As neither Andal nor Juan
Carlos built a house on the lot within the stipulated period, the
Makati Development Corporation, on April 3, 1961, that is,
three days after the lapse of the two-year period, sent a
notice of claim to the Empire Insurance Co. advising it of
Andal's failure to comply with his undertaking. Demand for the
payment of P12,000 was refused, whereupon the Makati
Development Corporation filed a complaint in the Court of
First Instance of Rizal on May 22, 1961 against the Empire
Insurance Co. to recover on the bond in the full amount, plus
attorney's fees.
Hearing was held and, on March 28, 1963, the lower court
rendered judgment, sentencing the Empire Insurance Co. to
pay the Makati Development Corporation the amount of
P1,500, with interest at the rate of 12% from the time of the
filing of the complaint until the amount was fully paid, and to
pay attorney's fees in the amount of P500, and the
proportionate part of the costs. MDC appealed directly to the
SC.
Issue:
Here the trial court found that Juan Carlos had finished more
than 50 per cent of his house by April, 1961, or barely a
month after the expiration on March 31, 1961 of the stipulated
period. There was therefore a partial performance of the
obligation within the meaning and intendment of article 1229.
Indeed, it has been held that where there has been partial or
irregular compliance with the provisions in a contract for
special indemnification in the event of failure to comply with
its terms, courts will rigidly apply the doctrine of strict
construction against the enforcement in its entirety of the
indemnification, where it is clear from the contract that the
amount or character of the indemnity is fixed without regard YNCHAUSTI V YULO (1914)
with interest at 10% per annum, on that date
FACTS: aggregating to P42,944.76.
- Teodoro Yulo, a property owner of Iloilo, for the exploitation
and cultivation of his numerous haciendas in the province of - On May 12, 1911, Francisco, Manuel, and Carmen Yulo y
Negros Occidental, had been borrowing money from the firm Regalado executed in favor of Inchausti & Co. another notarial
of Inchausti & Company under specific conditions. instrument in recognition of the debt and the obligation of
payment in the following terms: "First, the debt is reduced
- On April 9, 1903, Teodoro Yulo died testate. His widow and for them to P225,000; second, the interest is likewise
children held the conjugal property in common and at the reduced for them to 6% per annum, from March 15,
death of Gregoria (wife), these children (Pedro, Francisco, 1911; third, the installments are increased to 8, the
Teodoro, Manuel, Gregorio, Mariano, Carmen, first of P20,000, beginning on June 30, 1911, and the
Concepcion, and Jose .Of these children Concepcion rest of P30,000 each on the same date of each
and Jose were minors, while Teodoro was mentally successive year until the total obligation shall be
incompetent. preserved the same relations under the finally and satisfactorily paid on June 30, 1919," it being
name of Hijos de T. Yulo continuing their current expressly agreed "that if any of the partial payments specified
account with Inchausti & Company until said balance in the foregoing clause be not paid at its maturity, the amount
amounted to P200,000 upon which the creditor firm tried to of the said partial payment together with its interest shall
obtain security for the payment of the money. bear interest at the rate of 15% per annum from the date of
said maturity, without the necessity of demand until its
- Gregorio Yulo, for himself and in representation of his complete payment;" that "if during two consecutive years
brothers Pedro, Francisco, Manuel, Mariano, and the partial payments agreed upon be not made, they
Carmen, executed on June 26, 1908, a notarial shall lose the right to make use of the period granted
document whereby all admitted their indebtedness to to them for the payment of the debt or the part thereof
Inchausti & Company in the sum of P203,221.27 and, in order which remains unpaid, and that Messrs. Inchausti & Co.
to secure the same with interest thereon at 10% per annum, may consider the total obligation due and demandable,
they especially mortgaged an undivided six-ninth of their 38 and proceed to collect the same together with the
rural properties, their remaining urban properties, lorchas, and interest for the delay above stipulated through all legal
family credits which were listed, obligating themselves to means."
make a formal inventory and finally to extend by the
necessary formalities the mortgage over the remaining three- - Stipulated in addition: Inchausti & Co. should include in their
ninths part of all the property and rights belonging to their suit brought in the CFI of Iloilo against Gregorio Yulo, his
other brothers, the incompetent Teodoro, and the minors brother and joint co-obligee, Pedro Yulo, and they will procure
Concepcion and Jose. by all legal means and in the least time possible a judgment in
their favor against Gregorio and Pedro, sentencing the latter
On January 11, 1909, Gregorio Yulo in representation of Hijos to pay the total amount of the obligation acknowledged by
de T. Yulo answered a letter of the firm of Inchausti & them in the instrument of August 12, 1909; with the
Company in these terms: "With your favor of the 2d inst. we understanding that if they should deem it convenient for their
have received an abstract of our current account with your interests, Francisco, Manuel, and Carmen Yulo may appoint an
important firm, closed on the 31st of last December, with attorney to cooperate with the lawyers of Inchausti & Co. in
which we desire to express our entire conformity as also with the proceedings of the said case. [Traitors!]
the balance in your favor of P271,863.12." On July 17, 1909,
Inchausti & Company informed Hijos de T. Yulo of the - On July 10, 1911, Gregorio Yulo answered the complaint and
reduction of the said balance to P253,445.42, with which alleged as defenses: first, that an accumulation of interest had
balance Hijos de T. Yulo expressed its conformity by means of taken place and that compound interest was asked for in
a letter of the 19th of the same month and year. Regarding Philippine currency at par with Mexican; second, that in the
this conformity a new document evidencing the mortgage instrument of August 12, 1909, two conditions were agreed
credit was formalized. one of which ought to be approved by the CFI, and the other
- ratified and confirmed by the other brother Mariano Yulo,
On August 12, 1909, Gregorio, for himself and in neither of which was complied with; third, that with regard to
representation of his brother Manuel, and in their own the same debt claims were presented before the
behalf Pedro, Francisco, Carmen, and Concepcion, the commissioners in the special proceedings over the
latter being of age at the time, ratified all the contents of inheritances of Teodoro Yulo and Gregoria Regalado, though
the prior document of June 26, 1908, severally and later they were dismissed, pending the present suit; fourth
jointly acknowledged and admitted their indebtedness and finally, that the instrument of August 12, 1909, was
to Inchausti & Company for the net amount of novated by that of May 12, 1911, executed by Manuel,
P253,445.42 which they obligated themselves to pay, Francisco and Carmen Yulo.
with interest at 10% per annum, in five installments at the
rate of P50,000. - The CFI of Iloilo decided the case "in favor of the defendant
- without prejudice to the plaintiff's bringing within the proper
- Among other clauses, they expressly stipulated the time another suit for his proportional part of the joint debt,
following: and that the plaintiff pay the costs."
- The default in payment of any of the installments or
the noncompliance of any of the other obligations will ISSUES
result in the maturity of all the said installments, and 1. WON the plaintiff can sue Gregorio Yulo alone, there being
Inchausti & Co. may exercise at once all the rights and other obligors
actions in order to obtain the immediate and total 2. WON plaintiff lost this right by the fact of its having agreed
payment of our debt. with the other obligors in the reduction of the debt, the
- All the obligations will be understood as having been proroguing of the obligation and the extension of the time for
contracted in solidum by all the Yulos, brothers and sisters. payment, in accordance with the instrument of May 12, 1911
- This instrument was neither ratified nor confirmed by 3. WON the contract with the three obligors constitutes a
Mariano Yulo. novation of that of August 12, 1999, entered into with the six
debtors who assumed the payment of P253,445.42
- The Yulos did not pay the first installment of the 4. If in the negative, WON it has any effect in the action
obligation. brought and in this present suit
- On March 27, 1911, Inchausti & Co. brought an
ordinary action in the CFI of Iloilo, against Gregorio HELD
Yulo for the payment of the balance of P253,445.42
1. Yes.. The debtors having obligated themselves in solidum, But as regards Francisco, Manuel, and Carmen Yulo, none of
the creditor can bring its action in toto against any one of the installments payable under their obligation, contracted
them. later, had as yet matured. The first payment, as already
This was surely the purpose in demanding that the obligation stated, was to mature on June 30, 1912. This exception or
contracted should be solidary having in mind the principle of personal defense of Francisco, Manuel, and Carmen Yulo "as to
law that, "when the obligation is constituted as a conjoint and that part of the debt for which they were responsible" can be
solidary obligation each one of the debtors is bound to set up by Gregorio Yulo as a partial defense to the action. The
perform in full the undertaking which is the subject matter of part of the debt for which these three are responsible is three-
such obligation." sixths of P225,000 or P112,500, so that Gregorio may claim
that, even acknowledging that the debt for which he is liable
2. No. Solidarity may exist even though the debtors are is P225,000, nevertheless not all of it can now be demanded
not bound in the same manner and for the same of him, for that part of it which pertained to his co-debtors is
periods and under the same conditions. Even though not yet due, a state of affairs which not only prevents any
the creditor may have stipulated with some of the action against the persons who were granted the term which
solidary debtors diverse installments and conditions, has not yet matured, but also against the other solidary
as in this case, Inchausti & Co. did with its debtors debtors who being ordered to pay could not now sue for a
Manuel, Francisco, and Carmen Yulo through the contribution, and for this reason the action will be only as to
instrument of May 12, 1911, this does not lead to the the P112,500.
conclusion that the solidarity stipulated in the
instrument of August 12, 1909 is broken. Against the propriety and legality of a judgment against
Gregorio Yulo for this sum, to wit, the three-sixths part of the
3. No. An obligation to pay a sum of money is not novated in a debt which forms the subject matter of the suit, we do not
new instrument wherein the old is ratified, by changing only think that there was any reason or argument offered which
the term of payment and adding other obligations not sustains an opinion that for the present it is not proper to
incompatible with the old one. First, because in order that an order him to pay all or part of the debt, the object of the
obligation may be extinguished by another which substitutes action.
it, it is necessary that it should be so expressly declared or
that the old and the new be incompatible in all points; and the Disposition We therefore sentence the defendant Gregorio
instrument of May 12, 1911, far from expressly declaring that Yulo to pay the plaintiff Inchausti & Co. P112,500, with the
the obligation of the three who executed it substitutes the interest stipulated in the instrument of May 12, 1911, from
former signed by Gregorio and the other debtors, expressly March 15, 1911, and the legal interest on this interest due,
and clearly stated that the said obligation of Gregorio to pay from the time that it was claimed, without any special finding
the P253,445.42 sued for exists, stipulating that the suit must as to costs. The judgment appealed from is reversed. So
continue its course and, if necessary, these three parties ordered.
would cooperate in order that the action against Gregorio
might prosper. It is always necessary to state that it is the
intention of the contracting parties to extinguish the former
obligation by the new one. There exist no incompatibility
between the old and the new obligation.