Kyle Dhapny P. Nerida Atty.

Dabuimar Burgos
202105040 BA 161
Case Digest
1. Desiderio Dalisay Investment, Inc. v. Social Security System, G.R. No.
231053; April 4, 2018
Facts: In 1976, the respondent Social Security System (SSS) filed a lawsuit
against the Dalisay Group of Companies (DGC) to collect the latter’s
employees' unpaid SSS premium contributions.
In the year 1997 on March 11, Desiderio Dalisay, the late President of
petitioner Desiderio Dalisay Investments, Inc. (DDII) offered to make a
partial payment to SSS via Dacion in order to fulfill their obligations to the
latter. To partially offset the P4,421,321.62 debt owed by the petitioner,
Dalisay offered several properties such as subject land and building for
P3,500,000. This offer was made through Atty. Honesto Cabaroguis, DDI’s
representative and counsel. SSS and DDII negotiated, and the land was
valued at P2 million and offered to SSS in fulfillment of DDII's obligations.
Atty. Cabaroguis promised SSS that DDII will leave the property right away
and turn over the land with a building free from impediments upon
acceptance. Following a meeting with the SSS Committee on Buildings and
Atty. Cabaroguis, the former informed the latter of the acknowledgment of
the property as payment for DDII's unpaid debts. According to the letter,
SSS is acknowledging the subject property in the value of P2 million, which
will be used to pay back premium contribution debts and use any remaining
funds for salary and student loan payments. The letter also stated that the
criminal case that was still pending in the public prosecutor's office would
not be dismissed and it will be the responsibility of DDII to coordinate with
the relevant office.
The subject land and building were taken over by SSS in 1982. In a
letter to SSS dated 1999, DDII expressed its desire to repay and settle an
obligation that had been paid for using the subject property and for its
return. In response, SSS demanded that the title be delivered in accordance
with the prior agreement between the parties. DDII ignored repeated written
and verbal requests from SSS to deliver the subject property's titles that were
clear of all liens and encumbrances. A Quieting of Title with Recovery of
Property and Damages action was brought by DDII against SSS in the RTC
in 2002. The complaint was upheld by the court for the reason that the SSS's
conditional acceptance prevented the parties from perfecting a dacion en
pago. The decision of the lower court was overturned on appeal to the CA.
The CA asserted that the delivery of the property followed the offer's
submission and communication of the corresponding acceptance. Dacion en
pago was unquestionably undertaken.
Issues: Whether or not there was a perfected “Dacion en Pago”
Ruling: Article 1245 of the Civil Code provides a special form of payment
called dacion en pago. It is the mode of extinguishing an obligation whereby
the debtor alienates in favor of the creditor. Here, the debtor transfers
ownership of a thing to the creditor as an acceptable substitute for payment
or performance of an unpaid debt by delivering and transmitting the latter's
ownership to the creditor. Given that the undertaking shares some
characteristics of a sale in the sense that the creditor is purchasing the thing
or property of the debtor, the cost of which is to be deducted from the
debtor's obligation—Article 1245 states that the law on sales shall apply in
such circumstances.
In the case presented, the acceptance of SSS of the P2,000,000 offer
resulted in a perfected dacion. It is not a counter-offer as the petitioner
claimed but rather an acceptance of the offer communicated by Atty.
Cabarroguis. DDII bears the burden of proving that the P2,000,000 offer
made to SSS was invalid, resulting in SSS's acceptance at a price different
from the price offered. Petitioner, on the other hand, failed to withdraw said
burden. Due to the fact that SSS has lawfully and in good faith acquired title
to the property at issue, it is found that the action by DDII to quiet the title
is invalid.
2. Ong v. BPI Family Savings Bank, G.R. No. 208638; March 19, 2018
Facts: Spouses Francisco Ong, the petitioners managed a printing business
under the name “Melbros Printing Center”. In December 1996, Managers
from the Bank of Southeast Asia (BSA) stopped by the petitioners' office to
talk about the various loan and credit options available through their bank.
The petitioners applied for the credit facilities made available by BSA
because of the latter's assurances and their plans for business expansion. In
order to secure a P15 million term loan and a P5 million credit line, or a total
of P20 million, they signed a real estate mortgage over their property in favor
of BSA. As a result, only P10,444,271.49 of the term loan was released by
BSA, and only P3,000,000 of the P5,000,000 credit line was issued. BSA stated
that they would release the remaining P2M contingent upon the payment of
the P3M that was initially given to petitioners. The petitioners accepted the
requirement and fully paid the P3M. The P2M was still not released by BSA.
The petitioners then objected to paying the term loan amortizations that
were due.
BPI Family Savings Bank (BPI) later merged with BSA, procuring all of
the latter's rights and obligations. Due to the petitioner’s failure to make their
term loan payments, BPI filed a motion for the REM's foreclosure. The
petitioners filed a lawsuit for damages against BPI in an effort to stop the
foreclosure, asking for P23,570,881.32 in actual damages, P1,000,000 in moral
damages, and P500,000 to cover legal fees, court costs, and other costs. They
also requested a temporary restraining order and a preliminary injunction.
The RTC ruled in the petitioner’s favor, but BPI appealed to the CA. The CA
overturned the lower court's judgment and ruled in BPI's favor.
Issues:
I. Whether or not the Petitioners and BSA already had a legally-binding
agreement regarding the Omnibus Credit Line;
II. Whether or not the Petitioners are eligible for damages;
III. Whether or not BSA was delayed in fulfilling its obligations;
IV. Whether or not BPI has the right to foreclose on the mortgage on the
petitioner’s land.
Ruling:
I. As a rule, the Petitioners and BSA had a legally-binding contract or
agreement since, in the rule of a perfected contract, a contract is considered
perfected once the two parties reach an understanding. It is completed
through simple consent, or the meeting of an offer and an acceptance with
regard to the object and the cause that make up the contract. Without a
doubt, in this case, the contract was completed when BSA authorized and
released the P3,000,000.00 from the initial P5,000,000.00 credit facility.
II. Yes, the Petitioners are entitled and eligible for damages. In order to serve
the public interest, the law permits the award of exemplary damages. In the
contemporary world, the banking system has evolved into an essential
institution that is essential to the economic well-being of every civilized
society. Banks should take precautions to avoid liability for harm caused by
negligence or bad faith on their part. As a result, the Court decides that the
petitioners should also receive exemplary damages.
III. In this case, BSA was not only delayed in releasing the pre-agreed credit
line of P5,000,000.00 but they also committed a breach of the terms of the
agreement between the parties because BSA maliciously failed to release the
P2,000,000.00 after the petitioners complied with their obligations and paid
the first P3,000,000.00 in full.
IV. As a rule in the merger, BPI has no right to foreclose the mortgage on the
land of the petitioner. The law stipulates that all debts and obligations of
BSA must be transferred to BPI in the same way that these liabilities and
obligations would have been incurred by BPI itself. The status of the contract
and the parties' respective obligations are what determine BPI's ability to
foreclose the mortgage on the petitioner's property under the terms of this
merger and consolidation. BPI, as BSA’s successor, is prohibited from
foreclosing on the debt because BSA delayed fulfilling its obligations and
subsequently rescinded the omnibus line without the petitioners' consent
due to the fact that its successor BSA broke the agreement before the
petitioners' legitimate refusal to stop making the amortization payments.
3. Hi-Lon Manufacturing Inc. v. Commission on Audit, G.R. No. 210669;
Aug. 1, 2017
Facts: In 1978, the government through the Department of Public Works and
Highways (DPWH) converted to a road of right-of-way (RROW) a 29,690
square meter of the 89,070 square meter portion of land located in Calamba,
Laguna for the Manila South Expressway Extension Project. The registered
owner of the subject property was the Commercial and Industrial Real Estate
Corporation (CIREC), which later transferred ownership to Philippine
Polymide Industrial Corporation (PPIC). The Development Bank of the
Philippines (DBP) was then mortgaged by PPIC on the subject property, and
in 1985 it later acquired the property through a foreclosure process.
The DBP submitted the subject property, along with all of its other
acquired assets, to the Asset Privatization Trust (APT) for sale in 1987. After
selling the subject property through open bidding, APT signed a deed of sale
with TG Property, Inc. (TGPI) to purchase it. Under the name of TGPI, an
89,070 square foot Transfer Certificate of Title (TCT) including the 29,690
square foot portion was issued.
A Deed of Absolute Sale for the entire 89,070 sq. ft. was executed by
TGPI in 1995 in favor of HI-LON. A TCT was issued in its name after HI-
LON registered the Deed with the Register of Deeds. In order to pay just
compensation for the 29,690 square feet, HI-LON asked the DPWH for
assistance. The RROW was valued at 2,500/sq by an Ad Hoc Committee
formed by the DPWH. However, following the audit, the Supervising
Auditor of the DPWH calculated the price to be $19.40 per square. m. as
adequate remuneration. In light of the auditor's findings, the director of HI-
LON came to the conclusion that P9,937,596.20 in just compensation—
representing the difference between the partial payment of P10,461,338.00 to
HI LON and the amount of P532.741.80—should have been made for the
conversion of the RROW.
The COA discovered that since the RROW has belonged to the
Republic of the Philippines as it was purchased by the DBP until the present,
neither HI-LON nor its predecessor in interest, TGPI, owns it. As a result,
the COA came to the conclusion that the just compensation claim's proper
valuation is irrelevant because HILON is not entitled to it.
Issue: Whether or not Hi-Lon is entitled to receive fair compensation for the
conversion of the RROW.
Ruling: NO, the RROW should not be compensated fairly for HI-LON. The
area of the subject property that is being used as an RROW for the Manila
South Expressway Extension Project is not just a regular asset; it has been
used for public use since it was taken in 1978.
4. Federal Express Corporation V. Luwalhati R. Antonio and Eliza Bettina
Ricasa Antonio, G.R. No. 199455; June 27, 2018.
Facts: Unit 22-A in the Allegro Condominium in New York, United States,
belonged to Eliza Bettina. Monthly common charges for the Unit totaling
US$9,742.81 were due in November 2003 for the months of July 2003 to
November 2003. While Luwalhati and Eliza were still in the Philippines on
December 15, 2003, they made the decision to send Veronica Z. Sison, who
was based in New York, a number of Citibank checks totaling US$17,726.18
for the fee of monthly charges and US$11,619.35 for the payment of real
estate taxes. These checks were sent by Luwalhati through FedEx. The check
was addressed to Sison, who was in charge of delivering it to the New York
County Department of Finance and to Maxwell-Kates, Inc.
The package allegedly was not delivered to Sison, which led to
Luwalhati and Eliza's debts not being paid and the Unit being foreclosed.
Sison contacted FedEx to find out why the checks hadn't been delivered after
discovering that they had been sent on December 15, 2003. She was told that
her neighbor received the package, however, there was no signed receipt.
FedEx ignored Luwalhati and Eliza's letter of demand for payment of
damages for the package's non-delivery, which they sent on March 14, 2004.
As a result, they filed their Complaint for Damages on April 5, 2004. FedEx's
defenses included the assertion that Luwalhati and Eliza lacked standing to
sue the company because they disregarded a prerequisite requirement to do
so—file a written notice of claim within 45 days of accepting the shipment.
It went on to say that it was released from responsibility because Luwalhati
and Eliza shipped illegal goods and misrepresented them as "documents,"
citing the terms of its Air Waybill that forbade the "transportation of money."
Issue: Whether or not petitioner Federal Express Corporation is subject to
legal action for failing to deliver the checks sent by respondents Luwalhati
R. Antonino and Eliza Bettina Ricasa Antonino to the intended recipient
Veronica Sison.
Ruling: Yes, the petitioner will be held liable for damages for failing to
deliver the checks sent by respondents to the consignee in adherence to
substantial compliance with the provision of the Contract of Carriage. A
valid clause in a contract of carriage is one that mandates the submission of
a formal claim within a certain timeframe. According to legal precedent,
adherence to this clause is a required prerequisite before filing a claim for
damages related to the loss of the shipment. Such a clause's primary intent
is not to absolve the carrier of all responsibility, but rather to reasonably
notify it that the shipment has been damaged and that it is responsible for it,
as well as to give it a chance to assess the severity of the harm. Thus, in order
for respondents' claims to succeed, they must first file their formal claim
within 45 days of the relevant event and then file their subsequent action
within two years. Given that the respondents' complaint was submitted on
April 5, 2004, there is no question about their compliance with the second
period.
In pursuing the claim, Luwalhati demonstrated an ardent campaign.
She has no control over why the letter requesting damages was only sent
after her irate follow-ups regarding the whereabouts of the aforementioned
package. Petitioner has been unable to convincingly contest Luwalhati's
memory of the efforts she and Sison made and the responses it provided
them with.
5. Astrid A. Van de Brug v. Philippine National Bank, G.R. No. 207004; June
6, 2018
Facts: By virtue of the loans PNB provided for sugar crops, Spouses Aguilar,
the petitioners, used to be borrowers for Philippine National Bank (PNB),
the respondent. The mortgage on the real estate was foreclosed by PNB as a
result of the spouses Aguilar's failure to fulfill their obligation. Based on the
Sugar Restitution Law, Spouses Aguilar asked PNB to reconsider their
account. In order for PNB to grant the reconsideration, the Spouses had to
adhere to a number of conditions. The Spouses requested to start
restructuring the loan account after the Memorandum of Valuation was
subsequently issued. As a result of the Spouses' failure to formally indicate
their compliance with the PNB's re-computation of the account, the PNB
later refused to permit the restructuring of the account. The plaintiff's claim
was upheld by the RTC, allowing for the lot's reconveyance. The Court of
Appeals overturned the decision after the Aguilars filed an appeal, finding
that they were not entitled to restitution in the absence of an excess payment
following recomputation. In light of their similar circumstances, Spouses
Aguilar insisted that PNB accord them the same accommodation as Spouses
Pfleider. PNB countered by saying that R.A. Restitution is only permitted
under Section 7202 if the loan account has an excess payment.
Issue: Whether or not the PNB is supposed to treat the Aguilars the same
way it treated the Pfleider spouses.
Ruling: No. The Spouses Pfleider and the Aguilars are not in a comparable
situation. According to RA 7202, the Aguilars are not entitled to restitution.
As a result, RA 7202 cannot be used as the legal basis to compel PNB to treat
the Aguilars similarly to the Pfleider spouses. PNB has clarified that the two
sugar crop loan borrowers' circumstances differ in a way that justifies the
various accommodations that PNB provided to them. According to the terms
of the settlement deal reached by PNB and the Pfleider spouses, under
certain conditions, PNB would credit the Compromise Agreement's CARP
proceeds from the agricultural properties that were foreclosed as payment.
Contrarily, the Aguilars refused to certify their compliance with the
restructuring as assessed and approved by the COA and failed to sign the
restructuring contract because they continued to insist that the CARP
proceeds be treated as loan payments first and should be subtracted from
their loan accounts. According to the Compromise Agreement between the
spouses Pfleider and PNB, the accounts of the former to the latter were crop
loans and were therefore protected by RA 7202, as opposed to the accounts
of the Aguilars, which included accounts that were not covered by RA 7202.
6. Orient Freight International Inc. v. Keihin-Everett Forwarding Co. Inc.,
G.R, No. 191937; Aug. 9, 2017
Facts: Keihin-Everett and Matsushita signed a trucking service contract on
October 16, 2001. In accordance with the Trucking Service Agreement,
Keihin-Everett would handle Matsushita's trucking needs. Orient Freight
received these services through a subcontract from Keihin-Everett under the
terms of their own trucking service agreement, which was also signed on the
same day. Keihin-Everett signed an In-House Brokerage Service Agreement
for Matsushita's Philippine Economic Zone Authority export operations
when the Trucking Service Agreement between the two companies expired
on December 31, 2001. Keihin-Everett kept Orient Freight on as a
subcontractor, and Schmitz Transport and Brokerage Corporation continued
to handle the work. Salud Rizada, the sales manager at Keihin-Everett,
received a call from Matsushita in April 2002 regarding a column that
appeared in the Tempo tabloid's edition of April 19, 2002. This news was
reported on the theft of a truck by Caloocan City police that was carrying a
shipment of Matsushita video monitors and CCTV systems on April 17,
2002. Keihin-Everett got in touch with Orient Freight about this news, and
they claimed that the tabloid report had exaggerated the incident. They
asserted that the only thing that happened was the breakdown and towing
of the truck, which was being driven by Ricky Cudas and being assisted by
Rubelito Aquino. The truck was quickly released and arrived at the ship's
intended destination before it closed.
Keihin-Everett instructed Orient Freight to look into the matter. Orient
Freight reiterated that the truck simply broke down and needed to be towed
during its meeting with Keihin-Everett and Matsushita on April 20, 2002, as
well as in its letter to Matsushita on April 22, 2002. However, it was found
that 10 pallets of the shipment's 218 cartons, worth US$34,226.14, were
missing when it arrived in Yokohama, Japan, on May 8, 2002. Keihin-Everett
conducted a separate investigation into the incident. The Caloocan City
Police Station provided it with a police report for use in its investigation. In
the report, it was mentioned, among other things, that around 2:00 p.m.
Cudas instructed Aquino to contact Orient Freight on April 17, 2002, while
they were both in Plaza Dilao, Paco Street, Manila, regarding engine trouble.
Aquino called Orient Freight and told them the truck was missing afterward.
Cudas fled after the truck was stopped by the police in Caloocan City along
C3 Road near the intersection of Dagat-Dagatan Avenue, prompting a
manhunt for him. In response to Keihin-findings, Everett's Orient Freight
acknowledged in a letter dated May 15, 2002 that its earlier report was
inaccurate and that pilferage was apparently proven.
In a letter dated June 6, 2002, Matsushita informed Keihin-Everett that
it was ending the In-House Brokerage Service Agreement with effect from
July 1, 2002. Due to Keihin-Everett's handling of the incident on April 17,
2002, and its failure to disclose all pertinent information regarding this
incident, Matsushita terminated the contract, citing a loss of confidence.
Matsushita claimed that these actions constituted fraud and demonstrated a
complete disregard for the rule of law. In a letter to Orient Freight dated
September 16, 2002, Keihin-Everett demanded P2,500,000.00 as
compensation for lost income through counsel. It claimed that Keihin-
contract Everett's with Matsushita was terminated as a result of Orient
Freight's improper handling of the circumstance. Keihin-Everett filed a claim
for damages with Orient Freight on October 24, 2002, but they refused to
pay. Keihin-Everett requested payment for lost wages, plus exemplary
damages, attorney's fees, court costs, and other costs associated with the
lawsuit.
The Regional Trial Court's decision was appealed by Orient Freight to
the Court of Appeals. In its Decision dated April 21, 2010, the Court of
Appeals rejected Orient Freight's Motion for Reconsideration. The evidence
established beyond a reasonable doubt that the defendant's servant acted
with gross negligence, which was the direct cause of the plaintiff's injury.
Issue: Whether or not Article 2176 is relevant in this situation.
Ruling: Negligence may result in culpa contractual or culpa aquiliana.
Regulated by Civil Code Article 2176, the wrongdoing or negligence that
results in a vinculum juris and establishes an obligation between two parties
who are not formally bound by any other obligation is known as culpa
aquiliana. Here, the petitioner disputes that it had to provide the information
in relation to the hijacking incident because this wasn't one of the provisions
of the respondent's Trucking Service Agreement. Respondent had no legal
recourse against the petitioner because there was no binding contract.
Admittedly, the Trucking Service Agreement's actual text does not mention
having to report what happened during the hijacking incident. The
petitioner claims that it is not mentioned anywhere in the contract.
Respondent doesn't refute this assertion. The provisions of the Trucking
Service Agreement were not relied upon by either the Regional Trial Court
or the Court of Appeals in reaching their respective decisions. Although the
Trucking Service Agreement bound the petitioner and respondent and the
events at the center of this dispute took place while the contract was being
carried out, it is clear that the obligation to investigate and report arose after
the Trucking Service Agreement. When the respondent learned about the
hijacking news report incident, it got in touch with the petitioner and asked
for details. Then, the respondent asked the petitioner to check the accuracy
of the news report and provide a report on it. In response to the request of
the respondent, the petitioner met with the respondent and Matsushita on
April 20, 2002, and on April 22, 2002, the petitioner sent Matsushita a letter.
The basis for the respondent's claim was the petitioner's negligent behavior
when an investigation and report of the incident were necessary. The
petitioner's negligence did not establish the vinculum juris or legal
relationship with the respondent, which would have otherwise given rise to
a quasi-delict. According to both the Regional Trial Court and Court of
Appeals, the petitioner's negligence of its reporting obligation did not
constitute an action based on a quasi-delict. Prior to its negligent act, the
petitioner owed the respondent. The petitioner became obligated when the
respondent contacted it regarding the news report and asked it to look into
the incident. The petitioner was then said to have fulfilled its obligation.
Negligently, harming the respondent.
7. Ramon E. Reyes and Clara R. Pastor v. BANCOM Development Corp.,
G.R. No. 190286; January 11, 2018
Facts: The Continuing Guaranty signed by Angel E. Reyes, Sr., Florencio
Reyes, Jr., Rosario R. Du, Olivia Arevalo, and the two petitioners, in this case,
Ramon E. Reyes and Clara R. Pastor, in favor of respondent Bancom is the
source of the dispute in this case. In an Underwriting Agreement with
Bancom, Reyes Group consented to guarantee Marbella's full and timely
payment of all obligations. Obligations included a number of Promissory
Notes issued by Marbella on May 24, 1979, in favor of Bancom for a total of
P2,828,140.32. Due to Marbella's inability to repay the notes, a new set of
Promissory Notes were issued on August 22, 1979, but this time for a higher
value of P2,901,466.48. It again missed the payment deadline, which resulted
in the execution of the third set for P3,002,333.84. Bancom filed a Complaint
for a Sum of Money with a request for damages before the Makati RTC due
to its failure to repay the loan despite repeated demands. This was filed
against Marbella as the principal debtor and the members of the Reyes
Group as the loan's guarantors, seeking payment of the total amount of
P4,300,247.35.
Marbella and the Reyes Group defended themselves by saying that
they were coerced into signing the Promissory Notes and the Continuing
Guaranty. The aforementioned documents must be read in light of previous
agreements relating to the construction of the Marbella II condominium
project. The Reyes Group, as the owner of the land parcel that would be used
for the condominium development along Roxas Boulevard, Fereit Realty
Development Corporation (Fereit), a sister company of Bancom, and
Bancom were all parties to the Marbella II contracts. Reyes Group claims that
it was coerced into signing a Memorandum of Agreement in order to assume
a portion of the loans that Fereit had obtained from Bancom for the project's
development. For its part, Marbella allegedly had to take over Fereit's
responsibility to trigger the release of P2.8 million in receivables that were
then assigned to State Financing. The Reyes Group and Marbella also
provided a document titled Amendment of Memorandum of Agreement. In
this agreement, Fereit promised to pay Marbella back for the P2.8 million it
had already paid as well as any penalties, fees, or expenses incurred in order
to secure additional financing.
The Reyes Group and Marbella were jointly liable to Bancom, The RTC
decision was appealed to the Court of Appeals by Marbella and the Reyes
Group. Bancom's legal representatives Abella Concepcion Regala & Cruz
moved to end their involvement in the case. The uncontested fact that
Marbella and the Reyes Group had broken their promises under the
Promissory Notes and the guaranty was used by CA to reject the appeal. The
argument that noncompliance was excused by the prior agreements was
rejected by the appellate court. The fact that the defendants-appellants did
not use the legal recourse available to them, such as filing a third-party
complaint against Fereit, proves that they did not take Fereit's
noncompliance with the law into account when determining their own
liability to BANCOM. Additionally, the petitioners argued that the action
had to be deemed abandoned in accordance with Section 122 of the
Corporation Code. They emphasized that the Securities and Exchange
Commission (SEC) had revoked the Certificate of Registration issued to
Bancom on May 31, 2004, and that no trustee or recipient had been assigned
to carry on the case. Even Bancom's former legal counsel was forced to drop
out of the case because it was unable to get in touch with the company.
Motion for Reconsideration was rejected by Court of Appeals.
Issues: Whether or not the SEC's decision to revoke Bancom's Certificate of
Registration should be interpreted as a dismissal of the current lawsuit.
Ruling: Petition denied. These include the filing and defending of lawsuits
brought by or against the corporation, as well as other goals pertaining to
the resolution and conclusion of business affairs. According to the
Corporation Code, a corporation that has had its charter annulled or whose
corporate existence has otherwise come to an end is only permitted to
continue as a body corporate for a short period of time—three years—and
only for a limited number of predetermined legal purposes. “No liability
incurred by any corporation, its stockholders, members, directors, trustees,
or officers, nor any right or remedy in favor of or against any such
corporation, stockholders, members, directors, trustees, or officers, shall be
removed or impaired by the ensuing dissolution of such corporation.”
Bancom will hold petitioners accountable. The validity and proper execution
of the promissory notes were not contested by the petitioners. They also
didn't claim that they didn't repay Marbella's loans.
8. Benjamin Evangelista vs. Screenex, Inc. Represented by Alexander Yu,
G.R. No. 211564; Nov. 20, 2017
Facts: Evangelista received a loan from respondent Screenex, Inc. in 1991,
and Screenex then gave Evangelista two checks. The first check was for
P1,000,000 and was made out to the UCPB. The second check was made out
to China Banking Corporation. For P500,000, use BDO 8159110. Evangelista
provided two open-dated checks with the UCPB Check Nos. 616656 and
616657, both payable to Screenex, Inc., as security for the loan's repayment.
The checks were kept in a safe by Philip Gotuaco, Sr., the father-in-law of
respondent Alexander Yu, starting when Evangelista issued them, along
with the other company records and papers. Prior to the checks being
deposited, Evangelista received a demand letter from the family lawyer and
a personal demand from the family for the loan to be repaid.
Petitioner was accused of violating the Batas Pambansa on August 25,
2005. The MeTC determined that in cases involving violations of BP 22, the
prosecution had successfully established the first two elements. For
example, if the accused writes, draws, or issues any checks to apply to an
account or for value, and the drawee bank later disallows the check due to a
lack of funds or credit, or if the check would have been disallowed for the
same reason if the drawer had not, for no good reason, instructed the bank
to halt payment, the check will be considered dishonored. But the trial court
emphasized that the prosecution had failed to establish the third element,
which stated that the payee did not have enough money in his or her account
or credit with the drawee bank at the time the check was issued for
immediate payment in full. The court determined that although prosecution
witness Alexander G. Yu testified that the attorney had sent Evangelista a
demand letter, Yu was unable to show that the letter had actually been
received by the addressee. It was impossible to establish prima facie
evidence that Evangelista knew there weren't enough funds because there
was no way to tell when the five-day period should start to count down. As
a result, the court cleared him of the charges. In its decision regarding the
civil aspect of the cases, the court determined that even though Evangelista
admitted to having written and delivered the checks to Gotuaco as well as
to have fully paid the amounts stated on them, no proof of payment had
been provided. Furthermore, it was decided that the fact that the creditor
was in the custody of the credit instrument was adequate proof that the debt
being claimed had not yet been settled. Ultimately, Evangelista was deemed
liable for the associated civil obligation. Prior to the Regional Trial Court,
Evangelista timely submitted a Notice of Appeal and argued two MeTC
errors: The lower court made an error by failing to recognize that the
prosecution had not established Evangelista's civil liability to the individual
complainant; any legal action that could have been brought against
Evangelista was now barred by prescription and/or had expired. Following
the parties' submission of their respective Memoranda, the RTC decided that
the checks should be considered proof of Evangelista's debt to Gotuaco,
meaning that even if the criminal element of the charge had not been proven,
the obligation still existed.
Issue: Whether or not the Court of Appeals made a reversible mistake in
concluding that the petitioner is still responsible for the P1.5 million total
amount stated in the two checks.
Ruling: Rule in the petitioner’s favor. Any other deed that would satisfy a
straightforward agreement for the payment of money can satisfy a check. A
check is, by definition, an exchange bill that is drawn on a bank and payable
upon demand. It is a negotiable instrument that contains an unconditional
promise to pay a specific amount of money upon demand. It is written and
signed by the drawer. It is a promise from the drawer to pay the sum stated
thereon. However, according to the Civil Code, a negotiable instrument,
such as a check, may be canceled by any other action that voids a
straightforward agreement for the payment of money. As a result, a check is
amenable to the prescription of actions under a written contract. According
to Article 1144 of the Civil Code, the following claims must be filed within
ten years of the date the right to sue arises: 1) based on a written contract; 2)
based on an obligation imposed by law; 3) based on a judgment. However,
if the check is not dated, as in the case of the current petition, the cause of
action begins to accrue from the date the check was issued. This is the case
because, under the Negotiable Instruments Law, a check that doesn't have a
date is presumed to have one as of the time it was issued, regardless of
whether the date is missing from the check. While it is permitted to fill out
the date field on a check, it must be done so strictly in line with the authority
granted and within a reasonable amount of time. Even if Yu had the legal
right to add dates to the checks, the fact that he did so more than a decade
after they were first issued makes it clear that his actions do not qualify as
changes that were made within a reasonable amount of time. According to
Civil Code Article 1249, checks must be presented for payment within a
reasonable time after they are issued. Delivering promissory notes payable
on demand, bills of exchange, or other mercantile documents won't have the
effect of payment until they've been cashed or compromised due to the
creditor's negligence.
9. Chua vs. United Coconut Planters Bank, G.R. No. 215999; Sept. 16, 2017
Facts: It is beyond question that respondents Jose Go, petitioners Spouses
Chua, and LGCTI, as well as those who were borrowers with UCPB before
the March 1997 JVA, had loan obligations with that company. The 44-hectare
property with 32 titles owned by the petitioners was the subject of two deeds
of trust that were signed by the parties as a result of the JVA. Even though
the project covered by the JVA was never completed, the deeds of trust were
neither explicitly canceled nor revoked. The MOA consolidating the unpaid
debts of the Spouses Chua and LGCTI was signed by UCPB and petitioners
on March 21. To effectively lower their total amount owed to only
P68,000,000.00, the petitioners exchanged. They consented to convert the
balance into equity in LGCTI as payment in the event that they were unable
to their payment on time. They agreed to implement the MOA by signing
the REM prepared by UCPB, which classified the properties listed in the
MOA as security for the P404,597,177.04 credit accommodation. But without
their knowledge, Jose Go, acting on behalf of Revere, also signed another
REM pertaining to the assets that Revere was holding in trust for them. Out
of the P227,700,000.00 in proceeds from the foreclosure sale, UCPB applied
approximately P75.09 million to the debts owed by Revere and Jose Go at
the time the mortgages were foreclosed. Furthermore, UCPB pursued
complainants for their purported deficiency of P68,000,000.00, which was in
the meantime transferred by UCPB to respondent Asset Pool A.
Issues:
I. Whether or not the REM is still in effect after the subject properties'
foreclosure sale
II. Whether or not the deed of assignment covering the gap in the petitioner's
duties to UPCB is legitimate
Ruling:
I. No. Following the deduction of the value of the thirty properties, a review
of the MOA dated March 21, 2000 would show that the outstanding
obligation of the petitioners, as mentioned, was only P68,000,000.00.
Petitioners agreed to pay off this balance by converting it into equity in
LGCTI in the event that they weren't able to make their payment on time.
The petitioners' failure to fulfill their obligations in this instance led to the
foreclosure sale of the mortgaged properties. The payment of the remaining
P68,000,000.00 was purposefully omitted when the proceeds of the
foreclosure sale were applied to their outstanding debts, and the proceeds
were instead conveniently used to settle P75,000,000.00 of Revere and/or
Jose Go's unpaid debts with UCPB. This application was blatantly against
the understanding that Revere's or Jose Go's obligations would only be paid
in full if there was an excess in the use of the foreclosure proceeds. In light
of this, the Court of Appeals should have used the proceeds to settle all of
the petitioners' outstanding debts, and only any excess funds, if any, should
have been used to settle the debts of Revere and/or Jose Go.
II. No. As a result, a conclusion was drawn that the deed of assignment of
liabilities covering the P68,000,000.00 shortfalls in its obligation to UCPB was
invalid. The Spouses Chua and LGCTI owed a total of P204,597,177.04 in
debt, which included the P68,000,000.00 subject to the deed of assignment of
liabilities and the P32,703,893,450.00 relating to the interests and fines that
UCPB rescinded in favor of the petitioners. However, the bid amounting to
P227,700,000.00 far outweighed this amount. Furthermore, it can be inferred
that UCPB was unable to legitimately transfer to Asset Pool A any rights or
interests in the remaining P68,000,000.00 because the proper use of the
foreclosure proceeds from the sale would have invariably led to the
complete discharge of the petitioners' entire obligation. In the absence of
such a provision, petitioners would incur unjust enrichment. Unjust
enrichment occurs when someone gains something unfairly at the expense
of another person, or when someone holds onto someone else's money or
property in violation of the core ideals of justice, equity, and morality. The
main goal of the prohibition on unjust enrichment is to stop someone from
gaining wealth at the expense of another without due cause or consideration.
If we were to uphold the CA's decision despite the fact that it had no legal
or equitable foundation, this principle against unjust enrichment would be
violated.
10. Makati Tuscany Condominium v. Multi-Realty Development Corp., G.R.
No. 185530; April 18, 2017
Facts: Makati Tuscany is a 26-story condominium building in Makati City
that was constructed in 1974 by Multi-Realty. The Master Deed and
Declaration of Restrictions for Makati Tuscany were completed and signed
by Multi-Realty in 1975 through its president Henry Sy, Sr. They were
recorded with the Makati Register of Deeds in 1977. Makati Tuscany
Condominium Corporation (MATUSCO) was established and incorporated
by Multi-Realty sometime in 1977 in accordance with RA No. 4726, also
known as the Condominium Act, to hold title to and oversee Makati
Tuscany's public areas. The common areas of Makati Tuscany were
transferred from Multi-Realty to MATUSCO through a deed that was signed
in the same year.
Before the Makati RTC in 1990, Multi-Realty filed a complaint alleging
MATUSCO had committed fraud and/or forged documents, along with a
request for a preliminary injunction and/or a temporary restraining order.
In its complaint, Multi-Realty claimed that only eight of the 106 parking
spaces listed in the Master Deed as being part of the common areas were
initially intended to be used for guests. As a result, it kept ownership of the
98 other spaces. According to Multi-Realty, the Master Deed incorrectly
failed to reflect its ownership of the 98 parking spaces.
RTC rejected Multi-complaint, Realty's pointing out that the Master
Deed and Deed of Transfer were written by Multi-Realty. Furthermore, it
emphasized that without evidence that MATUSCO acted dishonestly or
unfairly toward Multi-Realty, the Master Deed's reformation could not be
granted. In the end, it determined that Multi-Realty had engaged in estoppel
by deed. The Court of Appeals received appeals from each party.
Multi-Realty’s appeal was denied by the CA, which also held that a
reformation action must be filed within ten years of the contract's execution
if it is to be successful. In regards to the CA's decision to dismiss
MATUSCO's appeal, the court found that the company's claim was based on
a personal right to receive money with a four-year prescriptive period rather
than a real right with a 30-year prescriptive period.
Multi-Realty requested reconsideration, but the request was turned
down. A petition for review was subsequently submitted to the Supreme
Court. The Supreme Court approved Multi-Realty's petition, nullified the
challenged CA's decision, and instructed the latter to decide Multi-Realty's
appeal. The CA subsequently initially rejected both appeals. However, after
considering Multi-Motion Realty's for reconsideration, CA changed its mind
and ordered that the Master Deed and Transfer Deed be rewritten.
MATUSCO requested that the Amended Decision be given another
look, but that request was denied. As a result, MATUSCO petitioned this
court for a review of its denial of certiorari.
Issues:
I. Whether or not the Master Deed and the Deed of Transfer needs to be
revised
II. Whether or not the doctrine of estoppel barred the respondent.
Ruling:
I. Yes. Article 1359 of the Civil Code serves as the foundation for a
reformation of an instrument action. According to the law, the following
conditions must be met for a reformation of instrument action to be
successful: the parties to the contract had to come to an agreement; It is not
clear what the parties intended when they signed the document; and The
instrument's failure to accurately reflect the parties' intentions is the result
of an error, fraud, unfair behavior, or accident.
In order to disprove the assumption that a written document already
captures the true intentions of the contracting parties, the burden of proof
shifts to the party requesting the reformation of the instrument. The law
stipulates that because they are a part of the common areas, all parking
spaces that aren't assigned to specific units fall under the petitioner's
jurisdiction.
The conclusion that the parties never intended to include the 98
parking spaces among the common areas to be relocated to the petitioner is
consistent with the entirety of the uncontested evidence supporting the
parties' acts. The evidence is in line with the idea that the petitioner was
aware of this actual fact. It should be noted at this point that the petitioner
did not refute any of the respondent's assertions in its reply regarding the
actions taken by the parties after the implementation and operation and
registration of the Master Deed and Deed of Transfer.
The petitioner argues that its delayed assertion of ownership over the
parking spaces was the result of confusion, not bad faith. It was never a
question of whether or not it acted in bad faith. Additionally, it is challenging
to blame an entire corporation for confusion and bad faith when those are
mental states appropriate for a natural individual person.
II. No. According to the petitioner, since the respondent admitted to making
a mistake when drafting the Master Deed and Deed of Transfer, it is now
responsible for the consequences of that error and must abide by the clear
intent and import of the documents. It argues that the respondent should be
restrained from asserting that the Master Deed and Deed of Transfer failed
to reveal the true intentions of the parties. The Court of Appeals stated in
Philippine National Bank v. Court of Appeals that “the doctrine of estoppel
is based on the principles of public policy, fair dealing, good faith, and
justice, and that its goal is to prevent someone from speaking against their
own actions, representations, or commitments to the detriment of someone
to whom they were directed and who reasonably relied on them. The
doctrine of estoppel springs from equitable principles and the equities in the
case.”
All of the respondent's actions in this case, with the exception of the
contract's language, were consistent with its defense. Estoppel cannot be
used to the petitioner's advantage. It was never intended to rely on any
misleading statements. It was aware that the respondent retained ownership
of the parking spaces from the moment it was incorporated. Its interactions
with the respondent and the actions of its board of directors convincingly
demonstrate that it understood and respected the ownership of the
respondent.