DMRC Enterprise vs Este Del Sol Mountain Reserve

GR No. 57936 Sept. 26, 1984

FACTS: Petitioner leased a number of heavy equipment to respondent; with the further
condition that 30% of the payments due to the petitioner is to be invested in the
purchase of shares of stock of the defendant corporation. As a result of the agreement,
petitioner proceeded to perform what was incumbent upon it; however, despite repeated
demands, the respondent refused to pay its outstanding obligations to the former. Thus,
petitioner filed a complaint with the CFI, but was dismissed for supposedly being
beyond the jurisdiction of the court, and within that of the SEC. Hence, this petition.

ISSUE: Whether or not the regular courts have jurisdiction over the action for collection
of money representing unpaid obligations filed by the petitioner, rather than SEC

HELD: The expanded jurisdiction of the Securities and Exchange Commission under
PD 902-A extends only and exclusively to intra-corporate matters, which is not present
in this case. Jurisdiction over all other claims remains with the regular courts. Petitioner
now seeks to enforce the contract seeking payment for the lease of heavy equipment under
Article 1657 (1) of the Civil Code, which obliges the lessee to pay the price of the lease
according to terms stipulated. The fact that the case involves shares of stock to be used as
payment for lease rentals does not convert it into an intra-corporate controversy.

Central Bank vs CA and Sulpicio M. Tolentino

GR No. 45710 Oct. 3, 1985

FACTS: Island Savings Bank granted an P80, 000.00 loan, secured by a mortgage, to private
respondent. However, only a mere P17,000.00 partial release was actually received by the
respondent, the rest withheld due to lack of funds and liquidity problems. Respondent signed a
promissory note to pay the same within 3 years but failed to do so. In view of such, the bank
attempted to foreclose the real estate mortgage. An action for injunction, specific performance
or rescission and damages was filed by respondent, which was dismissed. It was likewise
dismissed on appeal in CA, but with a modified decision, that the bank can neither foreclose the
real estate mortgage nor collect the P17,000.00 loan.

ISSUE: Whether or not respondent’s action for specific performance prosper

HELD: Private respondent, under Article 1191 of the Civil Code, may choose between specific
performance or rescission with damages in either case. Since Island Savings Bank is now
prohibited from doing further business by Monetary Board Resolution No. 967, making specific
performance impossible, rescission is the only alternative remedy left. Since both parties were
in default in the performance of their respective reciprocal obligations, they are both liable for
damages. Article 1192 of the Civil Code provides that in case both parties have committed a
breach of their reciprocal obligations, the liability of the first infractor shall be equitably tempered
by the courts. The liability of Island Savings Bank for damages in not furnishing the entire loan is
offset by the liability of Sulpicio M. Tolentino for damages, in the form of penalties and
surcharges, for not paying his overdue P17,000.00 debt.

Ang et. al vs CA and Lee Chuy Realty Corp.

GR No. 80058 Feb. 13, 1989

FACTS: Petitioners, owners of 3 parcels of land, entered into a contract of sale of said
properties with private respondent, at the agreed total price of P1,600,000.00; the latter paying
P50,000.00 as down payment. However, due to petitioners’ failure to comply with their agreed
undertaking to clear obstructions on the subject lands, private respondent demanded the refund
of the down payment, which the former failed to do. Private respondent then filed a complaint for
the collection of a sum of money with damages. The trial court ruled in favor of petitioners, while
the CA reversed such decision.

ISSUE: Whether or not the petitioners breached the agreement so as to warrant its rescission

HELD: The Court held that it is the petitioners’ refusal to proceed with the sale, unless private
respondent agreed to pay the higher price of P2,340,000.00, which constitutes the serious
breach of the agreement. Thus, the private respondent had the right to rescind the agreement.
Moreover, it appears petitioners had already sold the subject properties to Dolora Chua; they
can no longer perform what was incumbent upon them under the terms of the agreement, that
is, to deliver the subject property to private respondent. This is another breach of their
agreement. As a consequence of the resolution of the contract of sale, the parties should be
restored to their original situation. Petitioners should, therefore, refund the P50,000.00 down
payment they received.

Filoil Marketing Corp. vs IAC et. al

GR No. 67115 Jan. 20, 1989

FACTS: This case arose from a sale of a piece of land, owned by private respondent, Pabalan,
in favor of Villa Rey Transit. Upon receipt of the title thereto, the land was immediately
mortgaged on behalf of Villa Rey Transit to the herein petitioner as security for a loan, from the
former defaulted; hence the mortgage was extrajudicially foreclosed and the land was sold at
public auction, in which petitioner is the highest bidder. Upon learning of such developments,
Pabalan filed a complaint in the CFI, asking for the rescission of the contract and for damages.
The court held in favor of complainant, later affirmed by the CA.

ISSUE: Whether or not the contract can still be rescinded despite the presence of a third party,
the petitioner, which is supposedly an innocent purchaser of the property

HELD: The Court of Appeals erred in holding that the contract of sale was subject to rescission
on the ground of non-compliance with one of its conditions, presumably the payment of the
purchase price, under Article 1191 of the said Code. That ground was merely assumed and not
established. In fact, it did not exist at the time of the filing of the complaint. It follows that if the
contract was not rescissible as to the other defendants, much less would it be rescissible as to
the petitioner, which was not even a party to that contract.
Angeles vs Calasanz et.al
GR No. 42283 March 18, 1985

FACTS: Defendants-appellants and plaintiffs-appellees entered into a contract to sell a piece of

land, for the amount of P3,920.00 plus 7% interest per annum. The plaintiffs-appellees paid the
monthly installments until July 1966, when their aggregate payment already amounted to P4,
533.38. The defendants-appellants requested the remittance of past due accounts, and
cancelled the said contract because the plaintiffs failed to do so for more than 4 months. Hence,
plaintiffs-appellees filed a case before the CFI to compel the defendants to execute in their favor
the final deed of sale.
ISSUE: Whether or not the contract to sell was validly cancelled by the defendants-appellants
HELD: The breach of the contract adverted to by the defendants-appellants is so slight and
casual when the plaintiffs-appellees had already paid the monthly installments for a period of
almost nine (9) years. Furthermore, although the principal obligation was only P 3,920.00
excluding the 7 percent interests, the plaintiffs- appellees had already paid an aggregate
amount of P 4,533.38. To sanction the rescission made by the defendants-appellants will work
injustice to the plaintiffs- appellees. It would unjustly enrich the defendants-appellants. Article
1234 of the Civil Code also provides that if the obligation has been substantially performed in
good faith, the obligor may recover as though there had been a strict and complete fulfillment,
less damages suffered by the obligee.
 Ouano vs CA
GR No. 95900 July 23, 1992

FACTS: Petitioner leased his motor vessel to respondent Rafols, subject to the condition that
the latter should operate the vessel for his own benefit and should not sublet or sub-charter the
same without the knowledge and written consent of the owner. Rafols later contracted with
respondent Market Developers, Inc. (MADE) through its group manager, respondent Chua, to
transport cement in the mentioned vessel for a freightage of P46, 150.00, without consent of
petitioner. The amount was paid to Rafols. Petitioner filed a complaint in the RTC, seeking
payment of P23,000.00 representing the freight charges for the cement cargo, with damages.

ISSUE: Whether or not MADE and Chua are liable for damages to petitioner by being bound by
the contract of lease between the latter and Rafols

HELD: The obligation of contracts is limited to the parties making them and, ordinarily, only
those who are parties to contracts are liable for their breach. Parties to a contract cannot
thereby impose any liability on one who, under its terms, is a stranger to the contract, and, in
any event, in order to bind a third person contractually, an expression of assent by such person
is necessary. The charter contract was entered into only by and between petitioner and
respondent Rafols, and the other private respondents were neither parties thereto nor were they
aware of the provisions thereof. The act of the charterer in sub-chartering the vessel, in spite of
a categorical prohibition may be a violation of the contract, but the owner's right of recourse is
against the original charterer, either for rescission or fulfillment, with the payment of damages in
either case.

Suria vs IAC
GR No. 73893 June 30, 1987

FACTS: Private respondents entered into a Deed of Sale with Mortgage with petitioners over a
parcel of land owned by the former. Petitioners failed to pay the stipulated installments, only one
installment was paid despite repeated demands, thus violating the terms and conditions of the
contract. Respondents then filed for the rescission of the contract, which was favorably granted
by the court.

ISSUE: Whether or not the subsidiary and equitable remedy of rescission is available in the
presence of the remedy of foreclosure in the light of Art. 1383

HELD: The parties had entered into a contract of sale where the vendor obligates himself to
transfer the ownership of and to deliver a determinate thing to the buyer, who is obligated to pay
a price certain in money or its equivalent. The respondents have complied with their part and
parted with the title. The buyer fulfilled his end of the bargain when he executed the deed of
mortgage. The relationship between the parties is no longer as buyer and seller because the
contract of sale has been perfected and consummated and it is already of a mortgagor and
mortgagee. The petitioner’s breach of obligation is not with respect to the perfected contract of
sale but in the obligations created by the mortgage contract. The remedy of rescission is not a
principal action retaliatory in character but becomes a subsidiary one; which by law is available
only in the absence of any other legal remedy. Foreclosure here is not a remedy accorded by
law, but is a specific provision found in the contract.
 Aparri vs CA
L-30057 Jan. 31, 1984

FACTS: Petitioner was appointed as General Manager of NARRA, through the approval of
Resolution No. 13 by the private respondent. On March 15, 1962, Resolution No. 24 was
approved by the Board of Directors, which states that the incumbent General Manager shall
perform his duty until March 31,1962. Petitioner filed a mandamus with preliminary injunction
with the CFI. The petition prays for the annulment of the resolution of NARRA board.
ISSUE: Whether or not Resolution No. 24 was a removal or dismissal of petitioner without
cause
HELD: It was affirmed that the term of office of petitioner expired on March 31, 1962. In the
case at bar, the term of office is not fixed by law. However, the power to fix the term is rested in
the Board of Directors, subject to the recommendation of the office of economic coordination
and the approval of the President of the Philippines. Resolution No. 24 speaks of no removal
but an expiration of the term of office of the petitioner.

New Frontier Mines, Inc. vs NLRC

GR 51578 May 29, 1984

FACTS: Briones was employed by petitioner, which later assigned him at the company's
chromite project in Camarines Sur as chief accountant and administrative officer, performing
various duties and considered to be a managerial employee. He was charged with incurring
cash shortages, and later stopped reporting to work without permission or notice to the
company. He was fired as a result. A complaint for illegal dismissal was filed by petitioner. The
Labor Arbiter ordered his reinstatement with backwages. The company filed a petition for
certiorari.

ISSUE: Whether or not petitioner was illegally dismissed

HELD: The Labor Arbiter and Commissioners acted with grave abuse of discretion in ordering
the reinstatement with backwages of Briones, a managerial employee. As a managerial
employee, the company had the right to terminate Briones' services "for lack of confidence" and
abandonment of work.