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Case Digest
Case Digest
FACTS
On [dates] January 20 and April 17, 1997, Teresita Buenaventura executed
Promissory Note (PN) Nos. 232663 and 232711, respectively, each in the
amount of Pl,500,000.00 and payable to Metropolitan Bank and Trust
Company (MBTC). PN No. 232663 was to mature on July 1, 1997, with
interest and credit evaluation and supervision fee (CESF) at the rate of
17.532% per annum, while PN No. 232711 was to mature on April 7, 1998,
with interest and CESF at the rate of 14.239% per annum. Both PNs provide
for penalty of 18% per annum on the unpaid principal from date of default
until full payment
of the obligation.
RTC finds in favor MBTC and ordered Buenaventura to pay the former the
amount of Php3,553,444.45 plus all interest and penalties due as stipulated
in the PNs beginning July 15, 1998 until the amount is fully paid and 10%
of the total amount due as attorney's fees. The CA promulgated the
assailed decision with some modifications as to the interest rate per annum.
Motion for Reconsideration by Buenaventura
was likewise denied.
ISSUE
For purposes of applying interests, when is the date of delay or default in
this case.
RULING
According to Article 1169 of the Civil Code, there is delay or default from
the time the oblige judicially or extrajudically demands from the obligor
the fulfillment of his or her obligation. The records reveal that the
respondent did not establish when the petitioner defaulted in her
obligation to pay based on the two promissory notes. As such, its claim for
payment computed from July 15, 1998 until full payment of the obligation
had no moorings other than July 15, 1998 being the date reflected in the
statements of past due interest and penalty charges as of July 15, 1998.
Nonetheless, its counsel, through the letter dated July 7, 1998, made a final
demand in writing for the petitioner to settle her total obligation within
five days from receipt. As the registry return receipt indicated, the final
demand letter was received for the petitioner by one Elisa dela Cruz on
July 28, 1998. Hence, the petitioner had five days from such receipt, or until
August 2, 1998, within which to comply. The reckoning date of default is,
therefore, August 3, 1998.
ACE-AGRO DEVELOPMENT CORPORATION, petitioner, vs. COURT
OF APPEALS and COSMOS BOTTLING CORPORATION, respondents.
G.R. No. 119729 January 21, 1997
MENDOZA, J.:
FACTS
On April 25, 1990, fire broke out in private respondent's plant, destroying
the area where petitioner did its work. As a result, petitioner's work was
stopped. Then the petitioner asked private respondent to allow
it to resume its service, but petitioner was advised that on account of the
fire, private respondent was terminating their contract.
Now the petitioner complained that the termination of its service contract
was illegal and arbitrary and that, as a result, it stood to lose profits and to
be held liable to its employees for back wages, damages and/or separation
pay. The Private respondent appealed to the Court of Appeals, which
reversed the trial court's decision and dismissed petitioner's complaint. The
appellate court found that it was petitioner which had refused to resume
work, after failing to secure an extension of its contract.
ISSUE
Whether or not the unilateral termination of the service contract by the
Cosmos on account of a force majeure extinguished the obligation.
RULING
There was no cause for terminating the contract but at most a “temporary
suspension of work.” The court thus rejects private respondent’s claim that,
as a result of the fire, the obligation of contract must be deemed to have
been extinguished.
The stipulation that in the event of a fortuitous event or force majeure the
contract shall be deemed suspended during the said period does not mean
that the happening of any of those events stops the running of the period
the contract has been agreed upon to run. It only relieves the parties from
the fulfillment of their respective obligations during that time.
Teresita Buenaventura v. Metropolitan Bank and Trust Company, GR No.
167082 (August 3, 2016)
FACTS
Teresita Buenaventura executed 2 promissory notes dated January 20 and
April 17, 1997 each in the amount of 1.5M and payable to Metropolitan
Bank and Trust Company (MBTC). Both PNs provide for penalty of 18%
per annum on the unpaid principal from date of default until full payment
of the obligation.
RTC finds in favor MBTC and ordered Buenaventura to pay the former the
amount of Php3,553,444.45 plus all interest and penalties due as stipulated
in the PNs beginning July 15, 1998 until the amount is fully paid and 10%
of the total amount due as attorney's fees. The CA promulgated the
assailed decision with some modifications as to the interest rate per annum.
Motion for Reconsideration by Buenaventura
was likewise denied.
ISSUE
For purposes of applying interests, when is the date of delay or default in
this case.
RULING
According to Article 1169 of the Civil Code, there is delay or default from
the time the oblige judicially or extrajudically demands from the obligor
the fulfillment of his or her obligation. The records reveal that the
respondent did not establish when the petitioner defaulted in her
obligation to pay based on the two promissory notes. As such, its claim for
payment computed from July 15, 1998 until full payment of the obligation
had no moorings other than July 15, 1998 being the date reflected in the
statements of past due interest and penalty charges as of July 15, 1998.
Nonetheless, its counsel, through the letter dated July 7, 1998, made a final
demand in writing for the petitioner to settle her total obligation within
five days from receipt. As the registry return receipt indicated, the final
demand letter was received for the petitioner by one Elisa dela Cruz on
July 28, 1998. Hence, the petitioner had five days from such receipt, or until
August 2, 1998, within which to comply. The reckoning date of default is,
therefore, August 3, 1998.
MANILA BAY CLUB CORPORATION, Petitioner, v. THE COURT OF
APPEALS, MODESTA SABENIANO and MIRIAM SABENIANO,
JUDITH SABENIANO, JOY DENNIS SABENIANO, et. al., Respondents.
G.R. No. 110015. July 11, 1995
FRANCISCO, J.:
FACTS
The Sabenianos as owners-lessors and Manila Bay Club Corporation as
lessee executed ten-year lease contract.
But the lease agreement was short-lived because the Sabenianos
unilaterally terminated the lease due to the following contract violations:
(a) For unpaid accumulated rentals in arrears;
(b) For using the leased premises for gambling and prostitution; and
(c) Failure to insure the leased building.
They invoked the "Special Clause" of the lease contract that in case the
LESSEE fail or neglect to perform or comply with the stipulations, the lease
contract shall become automatically terminated and cancelled and the said
premises shall be peacefully vacated by the LESSEE.
ISSUE
Whether the private respondents cannot unilaterally rescind the lease
contract because its purported violation of the "insurance clause" was
merely slight or casual.
RULING
Petitioner essentially contends that private respondents cannot unilaterally
rescind the lease contract because its purported violation of the "insurance
clause" (paragraph 22) was merely slight or casual. We do not agree with
petitioner. Under paragraph 19 of the lease contract, the lessee’s
(petitioner) failure or neglect to perform or comply with any of the
covenants, conditions agreements or restriction stipulated shall result in
the automatic termination and cancellation of the lease. It can be fairly
judged from the tenor of paragraph 19 that the parties intended mandatory
compliance with all the provisions of the contract. Among such provisions
requiring strict observance is the "insurance clause" (paragraph 22) which
expressly provides that "the building must be insured and the insurance
premium must be for the account of the LESSEE . . ." Thus, upon
petitioner’s failure to comply with the mandatory requirement of
paragraph 22, private respondents were well-within their right to rescind
the lease contract by express grant of paragraph 19. Certainly, there is
nothing wrong if the parties to the lease contract agreed on certain
mandatory provisions concerning their respective rights and obligations,
such as the procurement of the insurance and the rescission clause. For it is
well to recall that contracts are respected as the law between the
contracting parties, and they may establish such stipulations, clauses, terms
and conditions as they may want to include. As long as such agreements
are not contrary to law, morals, good customs, public policy or public
order they shall have the force of law between them. In this connection,
none can be added to the respondent Court of Appeals’ correct observation
why petitioner’s omission to designate private respondents as beneficiaries
in the insurance policies it secures over the leased building is not merely a
slight or casual breach, but a substantial one allowing private respondents
to rescind the lease contract.
CONCEPCION, C.J.:
FACTS:
While the policy was in force, a taxicab of the Insured, driven by Carlito
Coquia, met a vehicular accident, in consequence of which Carlito died.
The Insured filed therefor a claim for P5,000.00 to which the Company
replied with an offer to pay P2,000.00, by way of compromise. The Insured
rejected the same and made a counter-offer for P4,000.00, but the Company
did not accept it. Hence, , the Insured and Carlito's parents, namely,
Melecio Coquia and Maria Espanueva — hereinafter referred to as the
Coquias — filed a complaint against the Company to collect the proceeds
of the aforementioned policy. In its answer, the Company admitted the
existence thereof, but pleaded lack of cause of action on the part of the
plaintiffs.
The trial court rendered a decision sentencing the Company to pay to the
plaintiffs the sum of P4,000.00 and the costs. Hence, this appeal by the
Company.
ISSUE:
Whether the plaintiffs have no cause of action because the Coquias have no
contractual relation with the Company.
RULING:
It should be noted that, although, in general, only parties to a contract may
bring an action based thereon, this rule is subject to exceptions, one of
which is found in the second paragraph of Article 1311 of the Civil Code of
the Philippines, reading:
Thus, the policy under consideration is typical of contracts pour autrui, this
character being made more manifest by the fact that the deceased driver
paid fifty percent (50%) of the corresponding premiums, which were
deducted from his weekly commissions. Under these conditions, it is clear
that the Coquias — who, admittedly, are the sole heirs of the deceased —
have a direct cause of action against the Company,3 and, since they could
have maintained this action by themselves, without the assistance of the
Insured, it goes without saying that they could and did properly join the
latter in filing the complaint herein.