A.

TITLE AND DATE OF THE CASE

Nikko Hotel Manila Garden & Ruby Lim vs. Reyes
G.R. No. 154259. February 28, 2005
B. FACTS
Robeto Reyes known as Amay Bisaya saw in a hotel lobby his friend Dr. Violeta
Filart who he said to have invite him the party of the hotels outgoing manager. So
Reyes carried the fruit basket of Filart to the penthuse where the party is. However,
Ruby Lim, the coordinator of the party asked him to leave since it is an exclusive
party and he is not one of those invited. Reyes did not leave the party as was
instructed but created a scene, thereby he was escorted out. He sued the hotel and
Ruby Lim for damages.
C. ISSUES
Whether or not Ruby Lim acted abusively in asking Roberto Reyes, a.k.a. Amay
Bisaya, to leave the party where he was not invited by the celebrant thereof thereby
becomes liable under Articles 19 and 21 of the Civil Code.
D. RULING OF THE COURT
The Supreme Court ruled that Ruby Lim did not act abusively in asking Roberto
Reyes in leaving the party to which he is not invited. In the absence of any proof of
motive on the part of Ms. Lim to humiliate Mr. Reyes and expose him to ridicule and
shame, it is highly unlikely that she would shout at him from a very close distance.
Ms. Lim having been in the hotel business for twenty years wherein being polite and
discreet are virtues to be emulated, the testimony of Mr. Reyes that she acted to the
contrary does not inspire belief and is indeed incredible. Thus, the lower court was
correct in observing that Considering the closeness of defendant Lim to plaintiff
when the request for the latter to leave the party was made such that they nearly
kissed each other, the request was meant to be heard by him only and there could
have been no intention on her part to cause embarrassment to him. It was plaintiffs
reaction to the request that must have made the other guests aware of what
transpired between them, had plaintiff simply left the party as requested; there was
no
need
for
the
police
to
take
him
out.
Article 19 involves a legal wrong committed for which the wrongdoer must be
responsible. The object of this article, therefore, is to set certain standards which
must be observed not only in the exercise of ones rights but also in the performance
of ones duties. Its elements are the following: (1) There is a legal right or duty; (2)
which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring
another. When Article 19 is violated, an action for damages is proper under Articles
20 or 21 of the Civil Code. Article 20 pertains to damages arising from a violation of
law which does not obtain herein as Ms. Lim was perfectly within her right to ask Mr.
Reyes to leave. Article 21refers to acts contra bonus mores and has the following
elements: (1) There is an act which is legal; (2) but which is contrary to morals, good
custom, public order, or public policy; and (3) it is done with intent to injure. Under
the above mentioned articles the act must be intentional. Absent such intention and
as the Court observed the conduct of Lim of asking Reyes to leave was in an
exemplary manner, there can be no damages to be awarded. Any damage suffered
by Reyes must be borne by him alone.

A. TITLE AND DATE OF THE CASE

PHIL. COMMUNICATIONS SATELLITE CORP. V. GLOBE TELECOM, INC.
G.R. No. 147324, May 25, 2004
B. FACTS
Globe Telecom, Inc. (Globe), had been engaged in the coordination of the
provision of various communication facilities for the military bases of the US in Clark
Air Base and Subic Naval Base. Philcomsat and Globe entered into an Agreement
whereby Philcomsat obligated itself to establish, operate and provide an IBS
Standard B earth station (earth station) within Cubi Point for the exclusive use of the
USDCA. The term of the contract was for 60 months, or 5 years. In turn, Globe
promised to pay Philcomsat monthly rentals for each leased circuit involved. At the
time of the execution of the Agreement, both parties knew that the RP-US Military
Bases Agreement, which was the basis for the occupancy of the Clark Air Base and
Subic Naval Base in Cubi Point, was to expire in 1991. Subsequently, Philcomsat
installed and established the earth station at Cubi Point and the USDCA made use
of the same Globe notified Philcomsat of its intention to discontinue the use of the
earth station in view of the withdrawal of US military personnel from Subic Naval
Base after the termination of the RP-US Military Bases Agreement. Globe invoked
as basis for the letter of termination Section 8 (Default) of the Agreement, which
provides: Neither party shall be held liable or deemed to be in default for any failure
to perform its obligation under this Agreement if such failure results directly or
indirectly from force majeure or fortuitous event. Either party is thus precluded from
performing its obligation until such force majeure or fortuitous event shall terminate.
For the purpose of this paragraph, force majeure shall mean circumstances beyond
the control of the party involved including, but not limited to, any law, order,
regulation, direction or request of the Government of the Philippines, strikes or other
labor difficulties, insurrection riots, national emergencies, war, acts of public
enemies, fire, floods, typhoons or other catastrophies or acts of God. Philcomsat
sent a reply letter, stating that "we expect [Globe] to know its commitment to pay the
stipulated rentals for the remaining terms of the Agreement even after [Globe] shall
have discontinue[d] the use of the earth station after November 08, 1992," citing
Section 7 of the Agreement. After the US military forces left Subic Naval Base,
Philcomsat demanded payment from Globe of its outstanding obligations under the
Agreement. However, Globe refused to heed Philcomsats demand. Philcomsat filed
a Complaint against Globe, praying that the latter be ordered to pay liquidated
damages under the Agreement, with legal interest, exemplary damages, attorneys
fees and costs of suit.
C. ISSUES
WHETHER OR NOT THE TERMINATION OF THE RP-US MILITARY BASES
AGREEMENT WAS A FORTUITOUS EVENT?
D. RULING OF THE COURT
YES. There is no merit is Philcomsats argument that Section 8 of the Agreement
cannot be given effect because the enumeration of events constituting force majeure
therein unduly expands the concept of a fortuitous event under Article 1174 of the
Civil Code and is therefore invalid. In support of its position, Philcomsat contends
that under Article 1174 of the Civil Code, an event must be unforeseen in order to
exempt a party to a contract from complying with its obligations therein. It insists that
since the expiration of the RP-US Military Bases Agreement, the nonratification of
the Treaty of Friendship, Cooperation and Security and the withdrawal of US military
forces and personnel from Cubi Point were not unforeseeable, but were possibilities
known to it and Globe at the time they entered into the Agreement, such events
cannot exempt Globe from performing its obligation of paying rentals for the entire
five-year term thereof.
From the foregoing, the Court finds that the defendant is exempted from paying the
rentals for the facility for the remaining term of the contract. Moreover, it would be
unjust to require Globe to continue paying rentals even though Philcomsat cannot be
compelled to perform its corresponding obligation under the Agreement.

A. TITLE AND DATE OF THE CASE

ELNORA R. CORTES V. C.A. & F. S. MGT AND DEVT CORP.
G.R. No. 121772. January 13, 2003
B. FACTS
The controversy stemmed from a civil case for specific performance with
damages filed by F.S. Management and Development Corporation (FSMDC) against
spouses Edmundo and Elnora Cortes involving the sale of the parcel of land owned
by the said spouses. Spouses Cortes retained the professional services of Atty. Felix
Moya. However, they did not agree on the amount of compensation for the services
to be rendered by Atty. Moya. Before a full-blown trial could be had, defendants
spouses Cortes and plaintiff FSMDC decided to enter into a compromise agreement.
Defendants spouses received from plaintiff FSMDC, three checks totaling P2.7M.
Thereafter, Atty. Moya filed an Urgent Motion to Fix Attorneys Fees, Etc. praying
that he be paid a sum equivalent to 35% of the amount received by the defendants
spouses which the latter opposed contending that the amount Atty. Moya seeks to
recover is utterly excessive and is not commensurate to the nature, extent and
quality of the services he had rendered. Later, the Cortes spouses and Atty. Moya
settled their differences by agreeing in open court that the former will pay the latter
the amount of P100k as his attorneys fees. About six months after the compromise,
Atty. Moya filed an Ex-Parte Manifestation praying that his Motion to Fix Attorneys
Fees be resolved on the basis of the agreement of the parties in chambers. The
Cortes spouses filed their Comment claiming: (1) That they agreed to the settlement
of P100,000k attorneys fees expecting that the checks paid by FSMDC will be good
but it turned out that they were all dishonored, and no compromise agreement was
pushed through; (2) That defendants are willing to pay Atty. Moya as additional
compensation for his services only in the amount of P50k subject to the condition
that same shall be paid after the case is terminated in their favor and/or the property
involved is sold; and (3) That defendants shall compensate Atty. Moya said amount
in addition to what they have paid before. The trial court issued an Order directing
the spouses to pay Atty. Moya the sum of P100,000.00 as and by way of attorneys
fees.
C. ISSUES
WETHER OR NOT THE P100K AWARD ATTORNEYS FEES WAS PROPER?
D. RULING OF THE COURT
NO. The reasonableness of the amount of attorneys fees awarded to private
respondent should be properly gauged on the basis of the long-standing rule of
quantum meruit, meaning, as much as he deserves. Where a lawyer is employed
without agreement as to the amount to be paid for his services, the courts shall fix
the amount on quantum meruit basis. In such a case, he would be entitled to receive
what he merits for his services. In the present case, aside from invoking his
professional standing, private respondent claims that he was the one responsible in
forging the initial compromise agreement wherein FSMDC agreed to pay P2.7M.
The fact remains, however, that such agreement was not consummated because the
checks given by FSMDC were all dishonored. It was not the private respondent who
was responsible in bringing into fruition the subsequent compromise agreement
between petitioners and FSMDC. Nonetheless, it is undisputed that private
respondent has rendered services as counsel for the petitioners. He prepared
petitioners Answer and Pre- Trial Brief, appeared at the Pre-Trial Conference, CIV
LAW REVIEW - OBLICON DIGESTS attended a hearing held on July 13, 1990,
cross-examined the witness of FSMDC, and was present in the conference at the
Manila Hotel between the parties and their respective counsels. All these services
were rendered in the years 1990 and 1991 where the value of a peso is higher.
Thus, we find the sum of P100,000.00 awarded to private respondent as his
attorneys fees to be disproportionate to the services rendered by him to
petitioners.The amount of P50,000.00 as compensation for the services rendered by
Atty. Moya is just and reasonable. Besides, the imposition of legal interest on the
amount payable to private respondent is unwarranted.

A. TITLE AND DATE OF THE CASE

CONCEPCION R. AINZA, substituted by her legal heirs, DR. NATIVIDAD A.
TULIAO, CORAZON A. JALECO and LILIA A. OLAYON vs. SPOUSES ANTONIO
PADUA and EUGENIA PADUA
G.R. No. 165420. June 30, 2005
B. FACTS
Spouses Eugenia and Antonio Padua owned a 216.40 sq. m. lot with an
unfinished residential house Thereafter, Concepcion Ainza bought one-half of an
undivided portion of the property from her daughter, Eugenia and the latters
husband, Antonio, for P100,000.00. No Deed of Absolute Sale was executed to
evidence the transaction, but cash payment was received by the respondents, and
ownership was transferred to Concepcion through physical delivery to Natividad
Tuliao. However, respondents caused the subdivision of the property into three
portions and registered it in their names in violation of the restrictions annotated at
the back of the title. Antonio claimed that his wife, Eugenia, admitted that
Concepcion offered to buy 1/3 of the property who gave her small amounts over
several years which totaled P100,000.00 by 1987 and for which she signed a
receipt.
C. ISSUES
Whether there was a valid contract of sale between Eugenia and Concepcion.
D. RULING OF THE COURT
There was a perfected contract of sale between Eugenia and Concepcion. The
records show that Eugenia offered to sell a portion of the property to Concepcion,
who accepted the offer and agreed to pay P100,000.00 as consideration. The
contract of sale was consummated when both parties fully complied with their
respective obligations. Eugenia delivered the property to Concepcion, who in turn,
paid Eugenia the price of P100,000.00, as evidenced by the receipt. The verbal
contract of sale between Eugenia and Concepcion did not violate the provisions of
the Statute of Frauds. When a verbal contract has been completed, executed or
partially consummated, as in this case, its enforceability will not be barred by the
Statute of Frauds, which applies only to an executory agreement. However, the sale
of the conjugal property by Eugenia without the consent of her husband is voidable.
It is undisputed that the subject property was conjugal and sold by Eugenia in April
1987 or prior to the effectivity of the Family Code on August 3, 1988. Thus, the
contract of sale between Eugenia and Concepcion being an oral contract, the action
to annul the same must be commenced within six years from the time the right of
action accrued. It is binding unless annulled. Antonio failed to exercise his right to
ask for the annulment within the prescribed period, hence, he is now barred from
questioning the validity of the sale between his wife and Concepcion.

A. TITLE AND DATE OF THE CASE

HEIRS OF SOFIA QUIRONG, Represented by ROMEO P.QUIRONG,
Petitioners, Present:Carpio, J.,Chairperson,-versus- Leonardo-De
Castro,Brion,Peralta,* and Abad, JJ. DEVELOPMENT BANK OF
THE PHILIPPINES, Promulgated: Respondent.
G.R. No. 173441 December 3, 2009
B. FACTS
When the late Emilio Dalope died, he left a 589-square meter untitled lot in Sta.
Barbara, Pangasinan, to his wife, Felisa Dalope (Felisa) and their nine children, one of
whom was Rosa Dalope-Funcion. To enable Rosa and her husband Antonio Funcion
(the Funcions) get a loan from respondent Development Bank of the Philippines (DBP),
Felisa sold the whole lot to the Funcions. With the deed of sale in their favor and the tax
declaration transferred in their names, the Funcions mortgaged the lot with the DBP. On
February 12, 1979, after the Funcions failed to pay their loan, the DBP foreclosed the
mortgage on the lot and consolidated ownership in its name on June 17, 1981.But,
because the heirs failed to file a formal offer of evidence, the trial court did not rule on
the merits of their claim to the lot and, alternatively, to relief from the DBP. On December
16, 1992 the RTC rendered a decision, declaring the DBPs sale to Sofia Quirong valid
only with respect to the shares of Felisa and Rosa Funcion in the property. It declared
Felisas sale to the Funcions, the latters mortgage to the DBP, and the latters sale to
Sofia Quirong void insofar as they prejudiced the shares of the eight other children of
Emilio and Felisa who were each entitled to a tenth share in the subject lot. But the DBP
failed to appeal supposedly because of excusable negligence and the withdrawal of its
previous counsel of record. On June 14, 2004, after hearing the case, the RTC
rendered a decision rescinding the sale between Sofia Quirong and the DBP and
ordering the latter to return to the Quirong heirs the P78,000.00 Sofia Quirong paid the
bank. On appeal by the DBP, the Court of Appeals (CA) reversed the RTC decision and
dismissed the heirs action on the ground of prescription. The CA concluded that,
reckoned from the finality of the December 16, 1992 decision in Civil Case D-7159, the
complaint filed on June 10, 1998 was already barred by the four-year prescriptive period
under Article 1389 of the Civil Code. The Quirong heirs filed a motion for
reconsideration of the decision but the appellate court denied it, thus, this petition.
C. ISSUES
In the negative, whether or not the heirs of Quirong were entitled to the
rescission of the DBPs sale of the subject lot to the late Sofia Quirong as a
consequence of her heirs having been evicted from it.
D. RULING OF THE COURT
With the conclusion that the Court has reached respecting the first issue presented
in this case, it would serve no useful purpose for it to further consider the issue of
whether or not the heirs of Quirong would have been entitled to the rescission of the
DBPs sale of the subject lot to Sofia Quirong as a consequence of her heirs having
been evicted from it. As the Court has ruled above, their action was barred by
prescription. The CA acted correctly in reversing the RTC decision and dismissing their
action. Parenthetically, the Quirong heirs were allowed by the RTC to intervene in the
original action for annulment of sale in Civil Case D-7159 that the Dalopes filed against
the DBP and the Funcions. Not only did the heirs intervene in defense of the sale, they
likewise filed a cross claim against the DBP. And they were apparently heard on their
defense and cross claim but the RTC did not adjudicate their claim for the reason that
they failed to make a formal offer of their documentary exhibits. Yet, they did not appeal
from this omission or from the judgment of the RTC, annulling the DBPs sale of the
subject lot to Sofia Quirong. This point is of course entirely academic but it shows that
the Quirong heirs have themselves to blame for the loss of whatever right they may
have in the case.
WHEREFORE, the Court DENIES the petition and AFFIRMS the November 30,
2005 decision of the Court of Appeals in CA-G.R. CV 83897.

A. TITLE AND DATE OF THE CASE

MANUEL O. FUENTES and LETICIA L. FUENTES, Petitioners, Present:
Puno, C.J.,Carpio,Corona,Carpio Morales,Velasco, Jr.,Nachura,- versus - Leonardo-De
Castro,Brion,Peralta,Bersamin,Del Castillo,Abad,Villarama, Jr.,Perez,
andMendoza, JJ.CONRADO G. ROCA, ANNABELLE R.JOSON, ROSE MARIE R.
CRISTOBALand PILAR MALCAMPO, Promulgated: Respondents.
G.R. No. 178902 April 21, 2010
B. FACTS
Sabina
Tarroza
owned
a
titled
358-square
meter
lot
in
Canelar, Zamboanga City. On October 11, 1982 she sold it to her son, Tarciano T. Roca
(Tarciano) under a deed of absolute sale. But Tarciano did not for the meantime have
the registered title transferred to his name. Six years later in 1988, Tarciano offered to
sell the lot to petitioners Manuel and Leticia Fuentes (the Fuentes spouses). They
arranged to meet at the office of Atty. Romulo D. Plagata whom they asked to prepare
the documents of sale. They later signed an agreement to sell that Atty. Plagata
prepared dated April 29, 1988, which agreement expressly stated that it was to take
effect in six months. The agreement required the Fuentes spouses to pay Tarciano a
down payment of P60,000.00 for the transfer of the lots title to him. And, within six
months, Tarciano was to clear the lot of structures and occupants and secure the
consent of his estranged wife, Rosario Gabriel Roca (Rosario), to the sale. Upon
Tarcianos compliance with these conditions, the Fuentes spouses were to take
possession of the lot and pay him an additional P140,000.00 or P160,000.00,
depending on whether or not he succeeded in demolishing the house standing on it. If
Tarciano was unable to comply with these conditions, the Fuentes spouses would
become owners of the lot without any further formality and payment. Since Tarciano and
Rosario were married in 1950, the CA concluded that their property relations were
governed by the Civil Code under which an action for annulment of sale on the ground
of lack of spousal consent may be brought by the wife during the marriage within 10
years from the transaction.Considering, however, that the sale between the Fuentes
spouses and Tarciano was merely voidable, the CA held that its annulment entitled the
spouses to reimbursement of what they paid him plus legal interest computed from the
filing of the complaint until actual payment. Since the Fuentes spouses were also
builders in good faith, they were entitled under Article 448 of the Civil Code to payment
of the value of the improvements they introduced on the lot.
C. ISSUES
1. Whether or not Rosarios signature on the document of consent to her husband
Tarcianos sale of their conjugal land to the Fuentes spouses was forged;
2. Whether or not the Rocas action for the declaration of nullity of that sale to the
spouses already prescribed
D. RULING OF THE COURT
The Court DENIES the petition and AFFIRMS WITH MODIFICATION the decision of
the Court of Appeals in CA-G.R. CV 00531 dated February 27, 2007as follows:
1. The deed of sale dated January 11, 1989 that Tarciano T. Roca executed in favor of
Manuel O. Fuentes, married to Leticia L. Fuentes, as well as the Transfer Certificate of
Title T-90,981 that the Register of Deeds of Zamboanga City issued in the names of the
latter spouses pursuant to that deed of sale are DECLARED void; 2. The Register of
Deeds of Zamboanga City is DIRECTED to reinstate Transfer Certificate of Title 3533 in
the name of Tarciano T. Roca, married to Rosario Gabriel; 3. Respondents Gonzalo G.
Roca, Annabelle R. Joson, Rose Marie R. Cristobal, and Pilar Malcampo
are ORDERED to pay petitioner spouses Manuel and Leticia Fuentes the P200,000.00
that the latter paid Tarciano T. Roca, with legal interest from January 11, 1989 until fully
paid, chargeable against his estate; 4. Respondents Gonzalo G. Roca, Annabelle R.
Joson, Rose Marie R. Cristobal, and Pilar Malcampo are further ORDERED, at their
option, to indemnify petitioner spouses Manuel and Leticia Fuentes with their expenses
for introducing useful improvements on the subject land or pay the increase in value
which it may have acquired by reason of those improvements, with the spouses entitled
to the right of retention of the land until the indemnity is made.

A. TITLE AND DATE OF THE CASE

OLIVERIO LAPERAL& FILIPINAS GOLF & COUNTRY CLUB INC. vs. SOLID
HOMES,INC.
G.R. No. 130913. June 21, 2005
B. FACTS
Filipinas Golf Sales and Development Corporation, predecessor-in-interest of
Filipinas Golf and Country Club, Inc., represented by its then President, Oliverio
Laperal, entered into a Development and Management Agreement with respondent
Solid Homes, Inc., a registered subdivision developer, involving several parcels of
land owned by Laperal and FGSDC. Under the terms and conditions of the
aforementioned Agreement and the Supplement, respondent undertook to convert at
its own expense the land subject of the agreement into a first-class residential
subdivision, in consideration of which respondent will get 45% of the lot titles of the
saleable area in the entire project. The aforementioned Agreement was cancelled by
the parties, and, in lieu thereof, two contracts identically denominated Revised
Development and Management Agreement were entered into by respondent with the
two successors-in-interest of FGSDC. Unlike the original agreement, both Revised
Agreements omitted the obligation of petitioners Laperal and FGCCI to make
available to respondent Solid Homes, Inc. the owners duplicate copies of the titles
covering the subject parcels of land. It appears, however, that even as the Revised
Agreements already provided for the non-surrender of the owners duplicate copies
of the titles, respondent persisted in its request for the delivery thereof .Then,
petitioners served on respondent notices of rescission of the Revised Agreements
with a demand to vacate the subject properties and yield possession thereof to
them.
C. ISSUES
Whether the termination of the Revised Agreement and Addendum, because of
the contractual breach committed by respondent solid homes, carried with it the
effect provided under Article 1385 of the New Civil Code.
D. RULING OF THE COURT
Mutual restitution is required in cases involving rescission under Article 1191.
Since Article 1385 of the Civil Code expressly and clearly states that rescission
creates the obligation to return the things which were the object of the contract,
together with their fruits, and the price with its interest, the Court finds no
justification to sustain petitioners position that said Article 1385 does not apply to
rescission under Article 1191.As a consequence of the resolution by petitioners,
rights to the lot should be restored to private respondent or the same should be
replaced by another acceptable lot. Applying the clear language of the law and the
consistent jurisprudence on the matter, therefore, the Court rules that rescission
under Article 1191 in the present case, carries with it the corresponding obligation of
restitution.

A. TITLE AND DATE OF THE CASE

METROPOLITAN MANILA DEVELOPMENT AUTHORITY VS. JANCOM
ENVIRONMENTAL CORPORATION
GR No. 147465, January 30, 2002
B. FACTS
A build-Operate-Transfer Contract for the waste-to energy project was signed
between JANCOM and the Philippine Government. The BOT Contract was
submitted to President Ramos for approval but was then too close to the end of his
term that his term expired without him signing the contract. He, however, endorsed
the same to incoming President Estrada. With the change in administration came
changes in policy and economic environment, thus the BOT contract was not
pursued and implemented. JANCOM appealed to the President for reconsideration
and despite the pendency of the appeal, MMDA caused the publication of an
invitation to pre-qualify and submit proposals for solid waste management.
C. ISSUES
Whether or not there is a valid and binding contract between the Republic of the
Philippines and JANCOM.
D. RULING OF THE COURT
There is a valid and binding contract between JANCOM and the Republic of the
Philippines. Under Articles 1305 of the Civil Code, A contract is a meeting of the
minds between two persons whereby one binds himself, with respect to the other, to
give something or to render some service. Art. 1315 of the Civil Code provides that
a contract is perfected by mere consent. Consent, on the other hand, is manifested
by the meeting of the offer and the acceptance upon the thing and the cause which
are to constitute the contract (Art. 1319, Civil Code). In the case at bar, the signing
and execution of the contract by the parties clearly show that, as between the
parties, there was a concurrence of offer and acceptance with respect to the material
details of the contract, thereby giving rise to the perfection of the absence of
Presidents signature is untenable. Significantly, the contract itself provides that the
signature of the President is necessary only for its effectivity, not its perfection.
There being a perfected contract, MMDA cannot revoke or renounce the same
without the consent of the other. From the moment of perfection, the parties are
bound not only to the fulfillment of what has been expressly stipulated but also to all
the consequences which, according to their nature, may be in keeping with good
faith, usage and law. (Art. 1315) It is a general principle of law that no one may be
permitted to change hid mind or disavow and go back upon his own acts, or to
proceed contrary thereto, to the prejudice of the other party.

A. TITLE AND DATE OF THE CASE

ANAMA VS. COURT OF APPEALS, ET AL.
GR. No. 128609. January 29, 2004
B. FACTS
The property was previously owned by Douglas Anamas parents, who
mortgaged it to Philippine Savings Bank and later was foreclosed. Douglas and the
PSBank entered into an agreement denominated as a Contract to Buy whereby the
bank agreed to sell to Douglas the said land with all the improvements thereon. The
Contract to Buy provides that Anama shall purchase the property of a certain amount
and shall pay to the PSBank; it also provides that (1) Anama shall apply with the
bank for a loan, the proceeds of which answer for the balance of the purchase price;
(2) should the petitioner fail to comply with any of the terms of contract, all amounts
paid are forfeited in favor of PSBank, the latter having the option either to demand
full
payment
of
total
price
or
to
rescind
the
contract.
Anama was able to pay the first and second installments; however, he failed to pay
the third installment when it became due. There were several transactions between
them to settle the amount due. But later, the bank executed an Affidavit of
Cancellation rescinding the contract, and forfeited the payments made by Anama
which were applied as rentals of the use of the property. Anama was then advised to
vacate the property despite his opposition to the rescission of the Contract to Buy.
The bank sold the property to spouses Co, in whose favor TCT was issued. Anama
then filed a case for Declaration of Nullity of Deed of Sale, Cancellation of TCT, and
Specific Performance with Damages.
C. ISSUES
Whether the rescission of the Contract to Buy was valid.
D. RULING OF THE COURT
Since Anama failed to pay the third installment, PSBank was entitled to rescind
the Contract to Buy. The contract provides the Bank two options in the event that
petitioner fails to pay any of the installments. This was either (1) to rescind the
contract outright and forfeit all amounts paid by the petitioner, or (2) to demand the
satisfaction of the contract and insist on the full payment of the total price. After
petitioner repeatedly failed to pay the third installment, the Bank chose to exercise
the
first
option.
The Contract to Buy is actually a contract to sell whereby the vendor reserves
ownership of the property and is not to pass until full payment. Such payment is a
positive suspensive condition, the failure of which is not a breach but simply an
event that prevents the obligation of the vendor to convey title from acquiring binding
force. Since ownership of the subject property was not pass to petitioner until fill
payment of the purchase price, his failure to pay on the date stipulated, or in the
extension granted, prevented the obligation for the Bank to pass title of the property
to Anama. The bank could validly sell the property to the spouses Co, the right of the
bank to sell the property being unequivocal.

A. TITLE AND DATE OF THE CASE

YHT Realty Corp, et al vs. Court of Appeals
G.R. No. 126780. February 17, 2005
B. FACTS
MAURICE McLaughlin is an Australian national who comes to the Philippines for
business. During his trips he stays in Tropicana, a hotel recommended to him by
Brunhilda Tan. McLaughlin deposited cash and jewelry to the safety deposit box of
the Hotel. The safety deposit box cannot be opened unless the key of the guest and
that of the management are present. Lainez and Payam are employees of Tropicana
who is charged with the custody of the keys. Thereafter, McLaughlin found out that
some of the money and jewelry he deposited were missing. Lainez and Payam
admitted that they assisted Tan to open his deposit box. Tan admitted that she stole
McLaughlins keys. Tan executed a promissory note to cover the amount of the
stolen money and jewelry. McLaughlin wanted to make the management liable.
C. ISSUES
Whether or not a hotel may evade liability for the loss of items left with it for
safekeeping by its guests, by having these guests execute written waivers holding
the establishment or its employees free from blame for such loss in light of Article
2003 of the Civil Code which voids such waivers.
D. RULING OF THE COURT
The issue of whether the Undertaking For The Use of Safety Deposit Box
executed by McLoughlin is tainted with nullity presents a legal question appropriate
for resolution in this petition. Notably, both the trial court and the appellate court
found the same to be null and void. We find no reason to reverse their common
conclusion.
Article
2003
is
controlling,
thus:
Art. 2003. The hotel-keeper cannot free himself from responsibility by posting
notices to the effect that he is not liable for the articles brought by the guest. Any
stipulation between the hotel-keeper and the guest whereby the responsibility of the
former as set forth in Articles 1998 to 2001[37] is suppressed or diminished shall be
void.
Article 2003 was incorporated in the New Civil Code as an expression of public
policy precisely to apply to situations such as that presented in this case. The hotel
business like the common carriers business is imbued with public interest. Catering
to the public, hotelkeepers are bound to provide not only lodging for hotel guests and
security to their persons and belongings. The twin duty constitutes the essence of
the business. The law in turn does not allow such duty to the public to be negated or
diluted by any contrary stipulation in so-called undertakings that ordinarily appear
in prepared forms imposed by hotel keepers on guests for their signature.