OLIVIA NAVOA AND ERNESTO NAVOA v. C.A.

, TERESITA DOMDOMA AND EDUARDO DOMDOMA (GR NO

59255, 20 DECEMBER 1995)

FACTS: On December 1977 Sps. Domdoma filed a case with the RTC for collection of various sums of
money based on loans given by them to Olivia Navoa. They cased was dismissed on the ground that
there was no cause of action and that the Domdoma’s do not have no capacity to sue. They appealed to
the C.A. and was granted a favourable decision.

There were 6 instances in which the Domdoma’s gave Navoa a loan. The first instance is when Teresita
gave Navoa a diamond ring valued at 15,000.00 which was secured by a PCIB check under the condition
that if the ring was not returned within 15 days from August 15, 1977 the ring is considered sold.
Teresita attempted to deposit the check on November 1977 but the check was not honored for lack of
funds. After this instance, there were other loans of various amounts that were extended by Teresita
Domdoma to Navoa, loans which were secured by PCIB checks, which were all dated to 1 month after
the loan. All these checks were not honoured under the same reason as the first loan.

ISSUE: Was the decision of the RTC to dismiss the case due to having no cause of action valid?

HELD:

- NO, A cause of action is the fact or combination of facts which affords a party a right to judicial
interference in his behalf.

- For the first loan it is a fact, that the ring was considered sold to Navoa 15 days after August 15, 1977,
and even then, Navoa failed to pay the price for the ring when the payment was due (check issued was
not honoured. Thus it is confirmed that Teresita’s right under the agreement was violated.

- As for the other loans extended by Teresita to Navoa, they were all secured by PCIB checks. It can be
inferred that since the checks were all dated to 1 month after the loan, it follows that the loans are then
payable 1 month after they were contracted, and also these checks were dishonoured by the bank for
lack of funds.

- Olivia and Ernesto Navoa failed to make good the checks that were issued as payment for their
obligations. Art 1169 of the Civil Code is explicit: those obliged to deliver or to do something incur in
delay from the time the obligee judicially or extra-judicially demands from them the fulfilment of the
obligations, the continuing refusal of Olivia and Ernesto Navoa to comply with the demand of payment
shows the existence of a cause of action.

The petition is DENIED and the decision of the C.A. remanding the case to the RTC for trial on the merits
is affirmed.

Obligations and Contracts terms:

Security- A means of ensuring the enforcement of an obligation or of protecting some interest in

property. It may be personal or property security.
Cause of Action- is the fact or combination of facts which affords a party a right to judicial interference
in his behalf. The requisites for a cause of action are: (a) a right in favour of the plaintiff by whatever
means and under whatever law it arises or created, (b) an obligation on the part of the defendant to
respect and not to violate such right; and, (c) an act or omission on the part of the defendant
constituting a violation of the plaintiff’s right or breach of the obligation of the defendant to the
plaintiff.