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SS/Alicante. belonging to Compania Transatlantica de Barcelona was transporting two locomotor boilers for the Manila Railroad Company. The equipment of the ship for dispatching the heavy lading was non strong plenty to manage the boilers. Compania Transatlantica contracted the services of Atlantic gulf and Pacific Co. . which had the best equipment to raise the boilers out of the ship’s clasp.

When Alicante arrived in Manila. Atlantic company sent out its drifting Crane under the charge of one Leyden.

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When the first boiler was being hoisted out of the ship’s clasp. the boiler could non be brought out because the sling was non decently placed and the caput of the boiler was caught under the border of the hatch. The weight on the Crane was increased by a strain estimated at 15 dozenss with the consequence that the overseas telegram of the catapulting broke and the boiler fell to the underside of the ship’s clasp. The sling was once more adjusted and the boiler was once more upraised but as it was being brought up the bolt at the terminal of the derrick broke and the boiler fell once more.

The boiler was so severely damaged that it had to be shipped back to England to be rebuilt. The amendss suffered by Manila Railroad amounted to P23. 343. 29. Manila Railroad so filed an action against the Streamship Company to retrieve said amendss. The Steamship Company caused Atlantic Company to be brought as co-defendant controversy that Atlantic Company as an independent contractor. who had undertaken to dispatch the boilers had become responsible for the harm.

The Court of First Instance decided in favour of Manila Railroad. the complainant. against Atlantic Company and absolved the Steamship Company. Manila Railroad appealed from the determination because the Steamship Company was non held apt besides. Atlantic Company besides appealed from the judgement against it.


1. Be the Steamship Company apt to Manila Railroad for presenting the boiler in a damaged status?

2. Was Atlantic Company apt to the Steamship Company for the sum it may be required to pay the complainant?

1. Was Atlantic Company straight apt to plaintiff as held by the test tribunal?


There was a contractual relation between the Steamship Company and Manila Railroad. There was besides a contractual relation between the Steamship Company and Atlantic. But there was no contractual relation between the Railroad Company and Atlantic Company.

There was no inquiry that the Steamship Company was apt to Manila Railroad as it had the duty to transport the boiler in a proper mode safe and firmly under the fortunes required by jurisprudence and imposts. The Steamship Company can non get away liability merely because it employed a competent independent contractor to dispatch the boiler.

Atlantic Company claimed that it was non apt. because it had employed all the diligence of a good male parent of a household and proper attention in the choice of Leyden. Said statement was non well-founded. because said defence was non applicable to negligence originating in the class of the public presentation of a contractual duty. The same can be said with regard to the liability of Atlantic Company upon its contract with the Steamship Company. There was a differentiation between carelessness in the public presentation of a contractual duty ( culpa contractual ) and negligence considered as an independent beginning of duty ( culpa aquiliana ) . Atlantic Company wasis liable to the Steamship Company for the harm brought upon the latter by the failure of Atlantic Company to utilize due attention in dispatching the boiler. regardless of the fact that the harm was caused by the carelessness of an employee who was qualified for the work. punctually chose with due attention.

Since there was no contract between the Railroad Company and Atlantic Company. Railroad Company can had no right of action to retrieve amendss from Atlantic Company for the wrongful act which constituted the misdemeanor of the contract. The rights of Manila Railroad can merely be made effectual through the Steamship Company with whom the contract of affreightment was made

DKC Holdings Corp. v. CA

* DKC entered into a Contract of Lease with Option to Buy with Encarnacion Bartolome. whereby DKC was given the option to rent or rent with purchase a land belonging to Encarnacion. which option must be exercised within 2 old ages from the sign language of the Contract. * In bend. DKC undertook to pay Php 3. 000 a month for the reserve of its option. * DKC on a regular basis paid the monthly Php 3. 000 until Encarnacion’s decease. Thereafter. DKC coursed its payment to Victor. the boy and exclusive inheritor of Encarnacion. However. Victor refused to accept these payments. * Meanwhile. Victor executed an Affidavit of Self-Adjudication over all the belongingss of Encarnacion. including the topic batch. Thus. a new TCT was issued in the name of Victor. * Later. DKC gave notice to Victor that it was exerting its option to rent the belongings tendering the sum of Php 15. 000 as rent. Again. Victor refused to accept the payment and to give up passion of the belongings. * DKC therefore opened a nest eggs history in the name of Victor and deposited therein the rental fee.

* DKC besides tried to register and footnote the Contract on the rubric of Victor but the Register of Deeds refused to register or footnote the same. * Thus. DKC filed a ailment for specific public presentation and amendss. * In the class of the proceedings. a certain Lozano. who claimed that he was and has been a tenant-tiller of the batch for 45 old ages. filed a Gesture for Intervention. * The RTC denied Lozano’s Motion and dismissed the ailment filed by DKC. * Whether the Contract of Lease with Option to Buy entered into by the late Encarnacion Bartolome with DKC was terminated upon her decease or whether it binds her exclusive inheritor. Victor. even after her death. * The SC held that Victor is bound by the Contract of Lease with Option to Buy. * Article 1311 of the NCC provides: Contracts take consequence merely between the parties. their assigns and inheritors. except in instance where the rights and duties originating therefrom are non catching by ( 1 ) their nature. ( 2 ) judicial admission or ( 3 ) proviso of jurisprudence.

* In this instance. there is neither contractual judicial admission nor legal proviso doing the rights and duty under the contract intransmissible. More significantly. the nature of the rights and duties therein are. by their nature. catching. * Where the service or act is of such a character that it may be performed by another. or where the contract. by its footings. shows the public presentation by others was contemplated. decease does non end the contract or alibi negligence. * In this instance. there is no personal act required from the late Encarnacion. Rather. the duty of Encarnacion to present ownership of the belongings may really good be performed by Victor. * Besides. the capable affair of the contract is a rental. a belongings right. The decease of a party does non pardon negligence of a contract which involves a belongings right. and the rights and duties thereunder base on balls to the personal representatives of the deceased. * Since DKC exercised its option in conformity with the contract. the SC held that Victor has the duty to give up ownership of and rental of premises for 6 old ages. However. SC held that the issue of occupancy should be ventilated in another proceeding.

* The general regulation. therefore. is that inheritors are bound by contracts entered into by their predecessors-in-interest except when the rights and duties originating therefrom are non catching by ( 1 ) their nature. ( 2 ) judicial admission or ( 3 ) proviso of jurisprudence. * Where Acts of the Apostless stipulated in a contract necessitate the exercising of particular cognition. mastermind. accomplishment. gustatory sensation. ability. experience. judgement. discretion. unity. or other personal making of one or both parties. the understanding is of personal nature. and terminates on the decease of the party who is required to render such service.

* There is privity of involvement between an inheritor and his asleep predecessor – he merely succeeds to what rights his predecessor had and what is valid and adhering against the latter is besides valid and adhering against the former. The decease of a party does non pardon negligence of a contract which involves a belongings right. and the rights and duties thereunder base on balls to the personal representatives of the deceased. Similarly. negligence is non excused by the decease of the party when the other party has a belongings involvement in the capable affair of the contract. Gutierrez HermanosVs Orense ( Gr. No. L-9188 1914 )

Facts: Orense is the proprietor a package of land ( with masonry house. and with the niparooferected ) situated in thepueblo of Guinobatan. Albay. This belongings has beenrecorded in the new belongings register in his name. Feb 14. 1907. Jose DURAN. a nephew of Orense. executed before a notary apublic instrument that he sold and conveyed to theplaintiff company the saidproperty for P1. 500 and that the seller Duran reserved to himself the right torepurchase itfor the same monetary value within a period of four old ages. Gutierrez Hermanos had non entered into ownership of the purchased belongings. because of itscontinued tenancy by ORENSE and DURAN by virtuousness of a contractof rental executed by the complainant to Duran. effectual up to February 14. 1911. After the oversight of the four old ages stipulated for the salvation. the defendantrefusedto present the belongings to the buyer. Gutierrez Hermanos so chargedDURAN with estafa. for havingrepresented himself in the said title of sale to be theabsolute proprietor of the land.

During that test. when ORENSE was called as a informant. he admitted that he consented to Duran’s merchandising of belongings under right of salvation. Because of this. the tribunal acquitted DURAN for charge of estafa. Mar 5. 1913 Gutierrez Hermanos so filed acomplaint in the CFI Albay againstEngracioOrense. Petitioner Claims that The instrument of sale of the belongings. executed by Jose Duran. was publiclyandfreely confirmed and ratified by ORENSE. In order to hone the rubric to the saidproperty. all complainant had to make wasdemand of Orense to put to death in legal signifier adeed of conveyance. But Orense refused to make so. without any justifiablecause orreason. and so he should be compelled to put to death the said title by an expressorder of the tribunal. JoseDURAN is notoriously insolvent and can non reimburse the complainant companyfor the monetary value of the sale which hereceived. nor pay any amount for the losingss anddamages occasioned by the sale. Besides. Duran had been busying thesaid propertysince February 14. 1911. and refused to pay the rental notwithstanding the demandmade upon him atthe rate of P30 per month.

Plaintiff prays that the land and betterments be declared as belonginglegitimately andexclusively to him. and that suspect be ordered to put to death inthe plaintiff’s behalf the said instrument of transportation andconveyance of the propertyand of all the right. involvement. rubric and portion which the suspect has. Respondent contends that the Facts in the ailment did non represent a cause of action and He is thelawful proprietor of the belongings claimed in the ailment. and since his Ownership was recorded in the belongings register. this was conclusive against the complainant. He had non executed any written power of lawyer nor given any verbalauthorityto Jose DURAN to sell theproperty to Gutierrez Hermanos. His cognition of the sale was acquired longafter the executing of the contract ofsale between Duran and Gutierrez Hermanos. and he did non intentionallyanddeliberately execute any act such as might hold induced the complainant company tobelieve that Duran wasempowered and authorized by the suspect.

Issue: Whether Orense is bound by Duran’s act of selling plaintiff’s belongings. Held: Yes. Ratio It holding been proven at the test that he gave his consent to the said sale. itfollows that thedefendant conferred verbal. or at least implied. power of agencyupon his nephew Duran. who accepted it in the sameway by selling the saidproperty. The principal must therefore carry through all the duties contracted by theagent. whoacted within the range of his authorization. ( Civil Code. humanistic disciplines. 1709. 1710 and1727 ) Article 1259 of the Civil Code prescribes: “No one can contract in thename of another without being authorizedby him or without his legalrepresentation harmonizing to jurisprudence. A contract executed in the name of another by onewhohas neither his mandate nor legal representation shall be null. unless itshould be ratified by the individual in whosename it was executed befo rhenium beingrevoked by the other undertaking party. ”

– The pledged statement made by thedefendant. Orense. piece attesting as a witnessat the test of Duran for estafa. virtually confirms and ratifies the sale of his propertyeffected by his nephew. Duran. and. pursuant to article 1313 of the Civil Code. redresss all defects which the contract may hold contained from themoment of itsexecution.

PAKISTAN INTERNATIONAL AIRLINES CORP. ( PIA ) . suppliant. vs. Hon. BLAS F. OPLE. Minister of Labor ; Hon. Vicente Leogardo. Jr. . DeputyMinister ; Ethelynne B. Farrales & A ; Maria Moonyeen Mamasig. respondents [ 1990 ]

Dec. 2. 1978: PIA. a foreign corp. licensed to make concern in the Philippines. executed in Manila 2 separate contracts of employments with Farrales & A ; Mamasig. Footings of the contract:1. Term # 5 Duration of Employment & A ; Punishment: understanding is for a periodof 3yrs. but can be extended by common consent of the parties2. Term # 6 Termination: PIA has rt to end the understanding by givingthe Employee notice in composing in progress 1 month before the intendedtermination or in lieu thereof. by paying the employee rewards equivalentto 1 month’s wage. 3. Term # 10 Applicable Law: Agreement will be construed & amp ; governedunder & A ; by the jurisprudence of Pakistan and merely the tribunals of Karachi. Pakistanshall have legal power to see any affair originating out of or under understanding.

Farrales & A ; Mamasig ( employees ) were hired as flight attenders after undergoing preparation. Base station was in Manila.Aug. 2. 1980: approximately 1 year & A ; 4mos prior to the termination of the contracts. PIA sent separate letters to the 2 employees informing them that they willbe terminated effectual Sept. 1. 1980.

Employees: filed a ailment for illegal dismissal & A ; non-payment of company benefits & A ; fillips with the Ministry of Labor & A ; Employment ( MOLE ) .PIA submitted a place paper claiming the employees were habitualabsentees & A ; they had the wont of conveying in from abroad big quantitiesof personal effects and the company has been warned by usage officialsto advise employees to stop that pattern. PIA likewise invoked thecontract of employment.

MOLE Reg’l manager Estrella made the undermentioned findings:1. employees should be reinstated w/full backwages or in the option. sums tantamount to their wages for the staying period of the 3-yr employment understanding should be paid2. the company should pay Mamasig an sum equivalent to the value of a unit of ammunition trip ticket Manila-USA-Manila. 3. PIA should pay each employee a fillip equivalent to their one-monthsalary. 4. 3-yr period nothing & A ; nothingness since it violates the Labor Code regulation on regular & A ; insouciant employment. Employees were regular employees after they hadrendered more than 1 year of continued service. 5. Dismissal was illegal because it was carried out w/o the requisiteclearance from the MOLE.

MOLE Deputy Minister Leogardo affirmed Estrella’s determination except thealternative in happening # 1. Issues & A ; Ratio:1. WON MOLE had legal power over the instance. – YES.Labor Code Art. 278: expiration of the services of employees w/at least 1yr of service can’t be done w/o anterior clearance from the DOLE.Rule XIV. Book No. 5 of the Labor Code Implementing Rules & A ; Regulations ( IRR ) provides that if the expiration was done w/o the necessaryclearance. the REGIONAL DIRECTOR was authorized to order thereinstatement & A ; payment of backwages. This is similarly provided for inPolicy Instruction No. 14 issued by the Sec. Of Labor. 2. WON PIA’s rt to procedural procedure was violatd. – NO.

MOLE was ordered to subject a place paper & A ; to show grounds in itsfavor. But it merely chose to follow with the first order.Even if no formal hearing was conducted. it had the chance to explainits side.It was able to appeal to the Ministry of Labor & A ; Employment.Rule bing at that clip provides that a expiration w/o the necessaryclearance shall be once and for all presumed to be expiration of employmentw/o merely cause & A ; Regional Director must order the immediate reinstatement & A ; payment of backwages. Position paper was non even necessary. It’s apresumption w/c can’t be overturned by any contrary cogent evidence nevertheless strong. 3. WON the commissariats of the contract superseded the generalprovisions of the Labor Code. – NO.

The rule of freedom to contract is non absolute. CC Art. 1306 providesthat judicial admissions by the parties may be allowed provided they are notcontrary to jurisprudence. ethical motives. good imposts. public order & A ; policy. Thus. theprinciple of liberty of undertaking parties must be counterbalanced w/thegeneral regulation that commissariats of applicable jurisprudence are deemed written into thecontract.

In this instance. the jurisprudence associating to labour & A ; employment is an country w/c theparties are non at autonomy to insulate themselves & As ; their relationship from bysimply undertaking w/each other. 4. WON term # 5 in the employment contract was contrary to Arts. 280-281 of the Labor Code. – YES.

MOLE held that term no. 5 was contrary to Art. 280 ( regular employeescannot be terminated by the employer except for a merely cause or whenauthorized by the codification ) & A ; 281 ( any employee who has rendered at least 1yr of service. whether uninterrupted or broken. shall be considered as aregular employee ) of the Labor Code. ?

Brent School vs. Zamora provides that a contract supplying for employmentw/a fixed period was non needfully improper. The critical consideration isthe presence/absence of a significant indicant that the period specified in an employment understanding was designed to besiege the security of term of office of regular employees.

In this instance. term # 5 should be read alongside term # 6. w/c neutralizes theformer term. In consequence. the 3-yr period becomes facultative at the option of PIA. Net consequence would be to render the employment of Mamasig & A ; Farralesat the pleasance of PIA. Thus. footings 5 & A ; 6 were intended to forestall securityof term of office from accruing in favour of the employees even during the limitedperiod of 3yrs and in consequence flight wholly the push of the Labor Codeprovisions. 5. WON merely Pakistan’s Torahs & A ; tribunals should regulate. – NO. PhilippineCourts & A ; administrative bureaus are the proper forums for theresolution of the contractual difference.

The relationship between PIA & A ; its employees in this instance is really muchaffected w/public involvement that the applicable RP Torahs can’t be renderedillusory by the parties holding that some other jurisprudence should regulate their relationship.

Contract was executed and performed ( partly ) in RP.

Employees are Philippine citizens & A ; occupants and were based in thePhilippines.PIA. although a foreign corp. . is licensed to make concern in the RP.PIA did non plead & amp ; turn out the applicable Pakistani Torahs on the affair. Therefore. it’s presumed that these Torahs are the same as the RP Torahs. Keeping: Request dismissed for deficiency of virtue. MOLE order affirmed & A ; modified. 1. Employees were illicitly dismissed. 2. MOLE did non perpetrate any gadalej. 3. Employees are entitled to 3 year. backwages w/o making or tax write-off. 4. Petitioners should be reinstated. Should reinstatement non be executable inview of the length of clip w/c has gone by. PIA should pay separation paysto employees amounting to 1 month’s wage for of all time twelvemonth of servicerendered by them including the 3 year service putatively rendered

Cui V Arellano UniversityTitle: Emetrio Cui V Arellano UniversityCitation: GR NO. L15127. May 30. 1961 | 112 Phil 135


Emetrio Cui took his preparative jurisprudence class at Arellano University. He so enrolled in its College of Law from first twelvemonth ( SY1948-1949 ) until first semester of his 4th twelvemonth. During these old ages. he was awarded scholarship grants of the said university amounting to a sum of P1. 033. 87. He so transferred and took his last semester as a jurisprudence pupil at Abad Santos University. To procure permission to take the saloon. he needed his transcript of records from Arellano University. The suspect refused to publish the TOR until he had paid back the P1. 033. 87 scholarship grant which Emetrio refunded as he could non take the saloon without Arellano’s issue of his TOR.

On August 16. 1949. the Director of Private Schools issued Memorandum No. 38 turn toing all caputs of private schools. colleges and universities. Part of the memoranda states that “the sum in tuition and other fees matching to these scholarships should non be later charged to the receiver pupils when they decide to discontinue school or to reassign to another establishment. Scholarships should non be offered simply to pull and maintain pupils in a school” .

Issue: Whether or non Emetrio Cui can return the P1. 033. 97 payment for the scholarship grant provided by Arellano University.


The memoranda of the Director of Private Schools is non a jurisprudence where the proviso set therein was consultative and non compulsory in nature. Furthermore. the judicial admission in inquiry. inquiring old pupils to pay back the scholarship grant if they transfer before graduation. is contrary to public policy. sound policy and good ethical motives or tends clearly to sabotage the security of single rights and hence. void and nothingness.

The tribunal sentenced the suspect to pay Cui the amount of P1. 033. 87 with involvement thereon at the legal rate from Sept. 1. 1954. day of the month of the establishment of this instance every bit good as the costs and disregarding defendant’s counterclaim

ARROYOVBERWIN; 3. 1917CARSONMarchFact– Both complainant and suspect are occupants of the municipality of Iloilo- Defendant is a procurador judicial in the jurisprudence office of the Attorney John Bordmanand is punctually authorized by the tribunal to pattern in justness of the peace tribunals of theProvince of IloiloDefendant represented Marcela Juaneza in the justness of the peace tribunal of Iloilo inthe proceeding for larceny prosecuted by the complainant Ignacio Arroyo- On August 14. 1914. the suspect requested the complainant to hold to disregard thesaid condemnable proceeding and stipulated with the complainant that his client Marcela Juaniza would acknowledge the plaintiff’s ownership in the land situated on Calle San Juan of the municipality of Iloilo where his said client ordered the cane cut. whichland and which cut cane are referred to in the cuase for larceny.

Furthermore. thedefendant agreed that the complainant should obtain a Torrens rubric to the said landduring the following term of the tribunal and that defendant’s client Marcel Juaneza wouldnot oppose the application for enrollment to be filed by the said applicant providedthat the complainant would inquire the prosecuting lawyer to disregard the said proceedingsfiled against Marcela Juaneza and Alejandro Castro for the offense of theft- Plaintiff on his portion complied with the agreement- In exchange. the suspect did non follow with the agreement- Plaintiff delivered to the suspect a written understanding for signature of the saidMarcel Juaneza attesting that the defendant’s said client recognized the plaintiff’sownership of the land and that she would non oppose the plaintiff’s application forregistration- The suspect has non returned to the complainant the said written agreementnotwithstanding the demands of the latter Issue

WON the understanding between the complainant and the suspect had valid judicial admissions HELDNOIt was contrary to public policy. The SC affirmed the determination of the test judgedismissing the ailment on the land of the illegality of the consideration of thealleged contract. An understanding by the proprietor of stolen goods to smother theprosecution of the individual charged with the larceny. for a monetary or other valuableconsideration. is obviously contrary to public policy and the due disposal of justness. Article 1255. Milliliter: – The catching parties may do the understanding and set up the clauses and conditions which they may hold advisable. provided they are non in contraventionof jurisprudence. ethical motives. or public order. Article 1275. Milliliter: – Contracts without consideration or with an illicit one have no consequence whatsoever. Aconsideration is illicit when it is contrary to jurisprudence and good ethical motives.

FILIPINASCOMPANIADESEGUROSETALVMANDANAS; 20. 1966CONCEPCIONJuneNatureParticular Civil Action For Declaratory ReliefFACTS-39 non-life insurance companies instituted this action in the CFI of Manila. tosecure a declaration of legality of Article 22 of the Constitution of the PhilippineRating Bureau. of which they are members. inasmuch as respondent Insurance Commissioner ( who regulates the concern concerned and of the transactionsinvolved therein ) assails its cogency upon the land that it constitutes an illegal orundue restraint of trade. – Subsequent to the filing of the request. 20 other non-life insurance companies. likewise. members of said Bureau were allowed to step in in support of thepetition. – CFI- rendered judgement declaring that the aforesaid Article 22 is neithercontrary to jurisprudence nor against public policy ; it may be legitimately observed and enforced. – Hence this entreaty by respondent Insurance Commissioner. who insists that theArticle in inquiry constitutes an illegal or undue restraint of trade and. hence. nulland nothingness. – In said Article 22. members of the Bureau “agree non to stand for nor to effectreinsurance with. nor to accept reinsurance from any company. organic structure. orunderwriter. licensed to make concern in the Philippines non a member in goodstanding of the Bureau” . and so the said proviso is illegal as a combination inrestraint of trade harmonizing to Mandanas. Issue

WON the intent or consequence of Art 22 of the Constitution of the Philippine RatingBureau is illegal as a combination in restraint of trade HELD“Nothing is improper. or immoral. or unreasonable. or contrary to public policyeither in the aims therefore sought to be attained by the Bureau. or in the meansavailed of to accomplish said aims. or in the effects of the accomplishmentthereof. ”- The intent of said Article 22 is non to extinguish competition. but to promoteethical patterns among non-life insurance companies. although. by the way it maydiscourage. and therefore. extinguish unjust competition. through underestimate. which initself is finally deleterious to the populace.

– The trial on whether a given understanding constitutes an improper intrigue or acombination in restraint of trade: Ferrazini vs. Gsell- is. whether. under the peculiar fortunes of the instance andthe nature of the peculiar contract involved in it. the contract is. or is non. unreasonable. This position was reiterated in Ollendorf vs. Abrahamson

Red Line TransportationCo. vs. Bachrach Motor Co.( 67 Phil. 77 ) . in the undermentioned linguistic communication: …The general inclination. we believe. of modern authorization. is to do thetest whether the restraint is moderately necessary for the protection of thecontracting parties. If the contract is moderately necessary to protect theinterest of the parties. it will be upheld. ten ten x x x x x x x…we follow the modern regulation that the cogency of restraints upon trade oremployment is to be determined by the intrinsic rationality of therestriction in each instance. instead than by any fixed regulation. and that such restrictionsmay be upheld when non contrary to the public public assistance and non greater than isnecessary to afford a just and sensible protection to the party in whose favour it is imposed.

Ollendorf vs. Abrahamson. 38 Phil. 585. ) …The trial of cogency is whether under the peculiar fortunes of thecase and sing the nature of the peculiar contract involved. publicinterest and public assistance are non involved and the restraint is non merely reasonablynecessary for the protection of the catching parties but will non impact the publicinterest or service. ( Red Line Transportation Co. vs. Bachrach Motor Co. ) Disposition

The determination appealed from should be. as it is herewith AFFIRMED. without costs.

NATALIA P. BUSTAMANTE V. SPOUSES RODITO F. ROSEL and NORMA A. ROSELG. R. No. 126800. November 29. 1999Pardo. J.


The suppliants herein borrowed a amount of money from the respondents througha loan which stipulated. among others. that: a certain package of land of the petitionerswill be indirect ; and that the loaner ( respondents ) has the option to buy thecollateral batch for P 200. 000. 00. inclusive of the sum and involvement therein. When theloan was about to maturate on March 1. 1989. respondents proposed to purchase at the pre-set monetary value of P200. 000. 00. the 70 ( 70 ) square metres parcel of the land. This wasrefused by the suppliants. together with the petition of the suppliants to widen the period of payment. The suppliants offered another land alternatively. with the considerationthat the borrowed sum as down payment. The loaner refused to accept paymentupon being offered by the suppliants and insisted that the collateral be sold to them. The suppliants deposited the sum to the test tribunal alternatively. demoing their desire to pay. The test tribunal Denied the executing of the Deed of Sale and merely ordered the payment of the loan with involvement. This was REVERSED by the Court of Appeals hencethis request


Whether or non the Deed of Sale can be executed sing the conditionsstipulated in the loan.


No. it can non be executed. The sale of the collateral is an duty with asuspensive status. It is dependent upon the occurrence of an event. without which the duty to sell does non originate as provided in Article 1181 of the Civil Code. The eventthat is to be based upon is the non-payment of the suppliants. This did non go on because the suppliant tendered payment at the due day of the month which respondents refused toaccept. take a firm standing that suppliant sell to them the collateral of the loan. Upon such refusal. they deposited the sum in the test tribunal demoing their purpose to pay. A examination of the judicial admission of the parties reveals a elusive purpose of the creditor to get the belongings given as security for the loan. This judicial admission is embraced in the construct of pactum commissorium. which is prohibited by jurisprudence. Pactum commissorium occurs if there was a creditor-debtor relationship between the parties ; the belongings was used assecurity for the loan ; and there was automatic appropriation by the borrower

igations and Contracts A2010page125 Prof. Labitag

BUSTAMANTEVROSEL; 29. 1999PARDONovemberNatureRequest for reappraisal on certiorari to invalidate the determination of CA reversiong and settingaside the determination of the RTC of QC FACTS– March 8. 1987 – Norma Rosel entered into a loan understanding with NataliaBustamante and her late hubby Ismael. The contract indicated that theBustamantes wanted to borrow P100. 000 for a period of 2 old ages conted from March1. 1987 with an involvement of 18 % per annum. This was guaranteed by a collateral 79sqm package of land inclusive of the flat built on it. In the event that theborrowers fail to pay. the loaner has the option to purchase or buy the collateral forP200. 000 inclusive of the borrowed money and involvement. – When the loan was about to maturate. Rosel proposed to purchase the land at the setprice in the loan understanding. The Bustamantes refused to sell and requested forextension of clip and offered to sell another residential batch in Proj 8. QC with theprincipal loan and involvement to be paid as down payment.

Rosel refused to widen thepayment of the loan and to accept the other batch offered as it was occupied bysquatters and that the Bustamantes were non the proprietors of the land but were mereland developers entitled to the subdivision portions or committee if and when theydeveloped at least ? of the subdivision country. – March 1. 1989 – suppliants tendered payment of the loan to respondents. whichthe latter refused to accept. take a firm standing on petitioner’s sign language of a prepared title of absolute sale of the collateral. – February 28. 1990 – the respondents filed with the RTC of QC for specificperformance with consignation against suppliant and her spouse- March 4. 1990 – respondents sent a demand missive inquiring suppliant to sell thecollateral pursuant to the option to purchase in the loan understanding. – March 5. 1990 – suppliant filed in the RTC a request for consignation anddeposited P153. 000 with the City Treasurer of QC on August 10. 1990- When suppliant refused to sell the collateral and barangay conciliation failed. respondents consigned the sum of P47. 500. 00 with the test tribunal.

Respondentsconsidered the chief loan of P100. 000. 00 and 18 % involvement per annum thereon. which amounted to P52. 500. 00. The chief loan and the involvement taken togetheramounted to P152. 500. 00. go forthing a balance of P 47. 500. 00. 10- TC denied the plaintiff’s supplication for the defendants’ executing of the Deed of Saleto convey the collateral in the plaintiffs’ favour. It besides ordered the suspects to paythe loan with involvement at 18 % per annum get downing on March 2. 1989 up to anduntil August 10. 1990. when suspects deposited the sum with the Office of theCity Treasurer. – July 8. 1996 – CA reversed the opinion of the RTC- January 20. 1997 – Court required respondents to notice on the request. whichthe respondents filed February 27. – February 9. 1998 – SC resolved to deny the request on the land that there wasno reversible mistake in the determination of the CA in telling the executing of thenecessary title of sale in conformance with the stipulated understanding. – The suppliant filed a gesture for reconsideration of the denial alleging that the realintention of the parties to the loan was to set up the collateral as warrant similarto an just mortgage harmonizing to Article 1602 of the Civil Code.

Cite this Case Digests on Contracts Sample

Case Digests on Contracts Sample. (2017, Jul 19). Retrieved from https://graduateway.com/case-digests-on-contracts-essay-sample-605/

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