SSS vs. Moonwalk Devt. and Housing Corp., G.R.

payment of any instalment, the whole amount remaining

No. 73345, April 7, 1993) unpaid would become due. A stipulation for liquidated
damages amounting to 25 percent of the principal was
FACTS: also added in case of default.

Plaintiff SSS approved the application of Defendant It was eventually discovered in 1993 that the check for
Moonwalk fora loan of P30,000,000 for the purpose of the 5th installment had not been signed by the lawyer. As
developing and constructing a housing project. Out of consequence, the vendor of the car did not receive the
P30,000,000 approved loan, the sum of P9,595,000 was payment for the 5th instalment and the last two (2)
released to defendant Moonwalk. A third Amendment instalments were no longer presented for payment. On
Deed of Mortgage was executed for the payment of the the belief that the lawyer defaulted on his payment, the
amount of P9,595,000. Moonwalk made a total payment bank demanded the payment of the balance of debt,
of P23,657,901.84 to SSS for the loan principal of including the liquidated damages since the entire balance
P12,254,700. After settlement of the account, SSS issued became due and demandable. Because the lawyer
to Moonwalk the release of Mortgage for Moonwalk’s refused to pay the balance as well as liquidated damages,
Mortgaged properties. In letter to Moonwalk, SSS a case for replevin and damages was filed with the
alleged that it committed an honest mistake in releasing Regional Trial Court. The court dismissed the complaint
defendant. That Moonwalk has still 12% penalty for for lack of cause of action. The decision was affirmed by
failure to pay on time the amortization which is in the the Court of Appeals (CA).
penal clause of the contract. Moonwalk’s counsel told
SSS that it had completely paid it obligation to SSS and The Supreme Court affirmed the decision of the CA.
therefore there is no recovery of any penalty.
Issue:
ISSUE:
W/N the lawyer is negligent?
Is the penalty demandable even after the extinguishment
of the principal obligation? Held:

HELD: Article 1170 of the Civil Code states that those who in
the performance of their obligations are guilty of delay
No. There has been a waiver of the penal clause as it was are liable for damages. The delay in the performance of
not demanded before the full obligation was fully paid the obligation, however, must be either malicious or
and extinguished. negligent.
Default begins from the moment the creditor demands
the performance of the obligation.In this case, although In consequence, no proof for malicious intent or
there were late amortizations there was no demand made negligence can be derived from the acts of the buyer.
by SSS for the payment of the penalty Thus, the SC held that rendering the total remaining
henceMoonwalk is not in delay in the payment of the balance of the debt due and demandable was improper.
penalty.No delay occurred and there was no occasion Moreover, he could not be made liable for liquidated
when the penalty became demandable and enforceable. damages related to the delay of payment for his car.

Since there was no default in the performance of the Barzaga vs Ca

main obligation-payment of the loan- SSS was never
entitled to recover any penalty. Facts:
If the demand for the payment of the penalty was made
prior extinguishment of the obligation which are: The petitioner’s wife was suffering from a debilitating
1. The principal obligation ailment and with forewarning of her impending death,
2. The interest of 12% on the principal obligation she expressed her wish to be laid to rest before
3. The penalty of 12% for late payment for after Christmas day to spare her family of the long vigils as it
demand, Moon walk would be in delay and was almost Christmas. After his wife passed away,
therefore liable for the penalty. petitioner bought materials from herein private
respondents for the construction of her niche. Private
RCBC vs. CA respondents however failed to deliver on agreed time
and date despite repeated follow-ups. The niche was
Facts: completed in the afternoon of the 27th of December, and
Barzaga's wife was finally laid to rest. However, it was
In 1991, a lawyer bought a Toyota Corolla from an two-and-a-half (2-1/2) days behind schedule.
authorized car dealer. After paying a downpayment for
the car, both parties agreed that the remaining amount Issue:
would be paid in 24 equal installments through post-
dated checks dated every 10th of the month. To secure Was there delay in the performance of the private
the payment of the car, a contract of chattel mortgage respondent's obligation?
was executed over the car in favor of the car dealer,
which was later on assigned to a bank. Under the Held:
contract for chattel mortgage, an acceleration clause was
inserted stating that if the mortgagor defaulted in the
Yes. Since the respondent was negligent and incurred social humiliation sustained by Pantaleon, as concluded
delay in the performance of his contractual obligations, by the RTC.
the petitioner is entitled to be indemnified for the
damage he suffered as a consequence of the delay or Lorenzo Shipping Corp. vs. BJ Mathel International
contractual breach. There was a specific time agreed
upon for the delivery of the materials to the cemetery. FACTS:

This is clearly a case of non-performance of a reciprocal Petitioner Lorenzo Shipping is engaged in coastwise
obligation, as in the contract of purchase and sale, the shipping and owns the cargo M/V Dadiangas Express.
petitioner had already done his part, which is the BJ Marthel is engaged in trading, marketing an dselling
payment of the price. It was incumbent upon respondent various industrial commodities. Lorenzo Shipping
to immediately fulfill his obligation to deliver the goods ordered for the second time cylinder lines from the
otherwise delay would attach. An award of moral respondent stating the term of payment to be 25% upon
damages is incumbent in this case as the petitioner has delivery, the balance payable in 5 bi-monthly equal
suffered so much. installments, no again stating the date of the cylinder’s
delivery. It was allegedly paid through post dated checks
Pantaleon vs. American Express but the same was dishonored due to insufficiency of
funds. Despite due demands by the respondent,
Facts: petitioner falied contending that time was of the essence
in the delivery of the cylinders and that there was a delay
The petitioner (Pantaleon) and his family, joined an since the respondent committed said items “ within two
escorted tour of Western Europe.In Coster Diamond months after receipt of fir order”. RTC held respondents
House, Amsterdam, Mrs. Pantaleon (wife) was about to bound to the quotation with respect to the term of
bought a 2.5 karat diamond brilliant cut, a pendant and a payment, which was reversed by the Court of appeals
chain, all of which totaled U.S. $13,826.00.To pay these ordering appellee to pay appellant P954,000 plus
purchases, around 9:15am, Pantaleon presented his interest. There was no delay since there was no demand.
American Express Credit Card together with his
passport. By 9:40am, Pantaleon was already worried ISSUE:
about further inconveniencing the tour group, he asked
the store clerk to cancel the sale. the store manager Whether or not respondent incurred delay in performing
though asked him to wait a few more minutes. Around its obligation under the contract of sale
10:00am (around 45 minutes after Pantaleon had
presented his AmexCard), Coster decided to release the RULING:
items even without American Express International,
Inc.’s (herein respondent, Amex for brevity) approval of By accepting the cylinders when they were delivered to
the purchase. This was 30 minutes after the tour group the warehouse, petitioner waived the claimed delay in
was supposed to have left the store. The spouses the delivery of said items. Supreme Court geld that time
Pantelon returned. Their offers of apology were met by was not of the essence. There having been no failure on
their tourmates with stony silence. The tour group’s the part of the respondent to perform its obligations, the
visible irritation was aggravated when the tour guide power to rescind the contract is unavailing to the
announced that the city tour of Amsterdam was to be petitioner.
canceled due to lack of remaing time. Mrs. Pantaleon
ended up weeping. After the star-crossed tour had ended, Solar Harvest vs. Davao Corrugated Carlon Corp.
the Pantaleon family proceeded to the United States
before returning to Manila. While in the United States, Facts:
Pantaleon continued to use his AmEx card, several times
without hassle or delay, but with two other incidents The petitioner (Solar Harvest, Inc., Solar for brevity)
similar to the Amsterdam brouhaha. entered into an agreement with respondent, Davao
Corrugated Carton Corporation (DCCC for brevity), for
Issue/s: the purchase of corrugated carton boxes, specifically
designed for petitioners business of exporting fresh
Whether or not AmEx is liable for damages. bananas. The agreement was not reduced into writing. To
start the production, Solar deposited in DCCC’s US
Ruling: Dollar Savings Account with Westmont bank, as full
payment for the ordered boxes. Despite such payment,
Yes. The reason why Pantaleon is entitled to damages is Solar did not receive any boxes from DCCC. Solar wrote
not simply because AmEx incurred delay, but because a demand letter for reimbursement of the amount paid.
the delay, for which culpability lies under Article 1170, DCCC replied that the boxes had been completed as
led to the particular injuries under Article 2217 of the early as April 3, 1998 and that Solar failed to pick them
Civil Code for which moral damages are remunerative. up from the formers warehouse 30 days from
The somewhat unusual attending circumstances to the completion, as agreed upon. It was also mentioned that
purchase at Coster – that there was a deadline for the Solar placed an additional order, out of which, half had
completion of that purchase by petitioner before any been manufactured without any advanced payment from
delay would redound to the injury of his several Solar. (Solar alleges that the agreement was for DCCC to
traveling companions – gave rise to the moral shock, deliver within 30 days from payment the said cartons to
mental anguish, serious anxiety, wounded feelings and Tagum Agricultural Development Corporation
(TADECO) which the latter failed to manufacture and
deliver within such time.) DCCC then demanded Solar No. A contract of carriage existed between Cathay and
to remove the boxes from the factory and to pay the the Vazquezes. They voluntarily and freely gave their
balance for the additional boxes. consent to an agreement whose object was the
transportation of the Vazquezes from Manila to Hong
Issue/s: Kong and back to Manila, with seats in the Business
Class Section of the aircraft, and whose cause or
Whether or not the respondent (Davao Corrugated consideration was the fare paid by the Vazquezes to
Carton Corporation) is in default. Cathay. The Vazquezes should have been consulted first
whether they wanted to avail themselves of the privilege
Ruling: or would consent to a change of seat accommodation
before their seat assignments were given to other
No. It was unthinkable that, over a period of more than passengers. It should not have been imposed on them
two years, Solar did not even demand for the delivery of over their vehement objection. By insisting on the
the boxes. Even assuming that the agreement was for upgrade, Cathay breached its contract of carriage with
DCCC to deliver the boxes, the latter would not be liable the Vazquezes.
for breach of contract as Solar had not yet demanded Art. 1244. The debtor of a thing cannot compel the
from it the delivery of the boxes. creditor to receive a different one, although the latter
may be of the same value as, or more valuable than that
In reciprocal obligations, as in contract of sale, the which is due.
general rule is that the fulfillment of the parties
respective obligation should be simultaneous. Hence, no In obligations to do or not to do, an act or forbearance
demand is generally necessary because, once a party cannot be substituted by another act or forbearance
fulfills his obligation and the other party does not fulfill against the obligee’s will.
his, the latter automatically incurs delay. But when
different dates for performance of the obligation are Meralco vs. Ramoy
fixed, the default for each obligation must be
determined, that is, the other party would incur in delay FACTS:
only from the moment the other party demands
fulfillment of the formers obligation. Thus, even in In the year 1987, the National Power Corporation (NPC)
reciprocal obligations, if the period for the fulfillment of filed with the MTC Quezon City a case
the formers obligation is fixed, demand upon the obliged for ejectment against several persons allegedly illegally
is still necessary before the obligor can be considered in occupying its properties in Baesa, Quezon City.
default and before a cause of action for rescission will among the defendants in the ejectment case was Leoncio
accrue. Ramoy, one of the plaintiffs in the case at bar.
On April 28, 1989 the MTC rendered judgment for
Cathay Pacific Airways vs. Vazquez MERALCO to demolish or remove the building and
structure they built on the land of the plaintiff and to
Facts: vacate the premises. On June 20, 1999 NPC wrote
to MERALCO requesting the immediate disconnection
Sps. Dr. Daniel and Maria Luisa Vazquez, resposdents, of electric power supply to all residential and
together with their maid and two friends went to commercial establishments beneath the NPC
Hongkong for pleasure and business. On their return transmission lines along Baesa, Quezon City.
flight, they booked Cathay Pacific Airways. While In a letter dated August 17, 1990 MERALCO requested
boarding, they were advised that there was a seat change NPC for a joint survey to determine all the
from Business Class to First Class. Dr. Vazquez refused establishments which are considered under NPC
the upgrade for the reason that it would not look nice for property. In due time, the electric service connection of
them as hosts to travel First Class and their guests, in the the plaintiffs was disconnected. During the ocular
Business Class; and that they were going to discuss inspection ordered by the Court, it was found out that
business matter during the flight. Cathay informed the the residence of the plaintiffs-spouses was indeed
Vazquezes that the Business Class was fully booked, and outside the NPC property.
that since they are Marco Polo Club members, they had
the priority to be upgraded to first class. Dr. Vazquez Issue:
eventually gave in, after being prohibited to take the
flight if they would not avail themselves of the privilege. WON the Court of Appeals gravely erred when it
Upon their return to Manila, the Vazquezes filed a awarded moral and exemplary damages and attorney’s
complaint and demanded to be indemnified for the fees against MERALCO under the circumstances that
humiliation and embarrassment caused by Cathay’s the latter acted in good faith in the disconnection of the
employees. electric services of the respondents.

Issues: Ruling:

Are the Vazquezes obliged to avail the privilege and take No. MERALCO willfully caused injury to Leoncio
the First Class flight? Ramoy by withholding from him and his tenants the
supply of electricity to which they were entitled under
Held: the Service Contract. This is contrary to public
policy because, MERALCO, being a vital public utility, that the company was in bad faith in cancelling the
is expected to exercise utmost care and diligence i policy. Had the insured met an accident at that time, he
the performance of its obligation. Thus, MERALCO’s wouldn’t be covered by the policy. This ruling was
failure to exercise utmost care and diligence in the challenged on appeal by respondent insurance company,
performance of its obligation to Leoncio Ramoy is denying bad faith in unilaterally cancelling the policy.
tantamount to bad faith. Leoncio Ramoy testified that The AC absolved Prudential on the grounds that it was
he suffered wounded feelings because of MERALCO’s not motivated by negligence, malice or bad faith in
actions. Furthermore, due to the lack of power cancelling subject policy. Rather, the cancellation of the
supply, the lessees of his four apartments on subject lot insurance policy was based on what the existing records
left the premises. Clearly, therefore Leoncio showed. The court even added that the errant manager
Ramoy is entitled to moral damages in the amount who didn’t remit the profits was forced to resign. Areola
awarded by the CA. Nevertheless, Leoncio is the sole then filed for a petition in the Supreme Court.
person entitled to moral damages as he is the only who
testified on the witness stand of his wounded feelings. Issue:
Pursuant to Article 2232 of the Civil Code, exemplary
damages cannot be awarded as Did the subsequent act of reinstating the wrongfully
MERALCO’s acts cannot be considered wanton, cancelled insurance policy by respondent insurance
fraudulent, reckless, oppressive or malevolent. Since the company, in an effort to rectify such error, obliterate
Court does not deem it proper to award exemplary whatever liability for damages it may have to bear, thus
damages in this case then the CA’s award of absolving it?
attorney’s fees should likewise be deleted, as pursuant to
Article 2208 of the Civil Code of which the Ruling:
grounds were not present.
Due to the agreement to enter into a contract of
Areola vs. CA & Prudential Guarantee Insurance insurance where Prudential promised to extend
protection to petitioner-insured against the risk insured,
Facts: there was a debtor creditor relationship between the two
parties. Under Article 1191, the injured party is given a
Prudential Guarantee cancelled Areola’s personal choice between fulfillment or rescission of the obligation
accident insurance on the grounds that the latter failed to in case one of the obligors fails to comply with what is
pay his premiums 7 months after issuing the policy. incumbent upon him. However, said article entitles the
Areola was supposed to pay the total amount of injured party to payment of damages, regardless of
P1,609.65 which included the premium of P1,470.00, whether he demands fulfillment or rescission of the
documentary stamp of P110.25 and 2% premium tax of obligation.
P29.40. The statement of account had a stipulation not
considering it a receipt. It also reminded the customer to ¯The damages would be nominal because the insurance
ask for a receipt after payment. There was also a company took steps to rectify the contract . There was
stipulation calling for a demand for a provisional receipt also no actual or substantial damage inflicted. Nominal
after payment to an agent. A provisional receipt was sent damages are "recoverable where a legal right is
to petitioner telling him that the provisional receipt technically violated and must be vindicated against an
would be confirmed by an official one. The company invasion that has produced no actual present loss of any
then cancelled the policy for non-payment of premiums. kind, or where there has been a breach of contract and no
After being surprised, Areola confronted a company substantial injury or actual damages whatsoever have
agent and demanded an official receipt. The latter told been or can be shown.”
him that it was a mistake, but never gave him an official
receipt. Areola sent a letter demanding that he be
reinstated or he would file for damages if his demand Tanguiling vs. CA
was not met. The company then told him that his
payments weren’t in full yet. The company replied to Facts:
Areola by telling him that there was reason to believe
that no payment has been made since no official receipt Herce contracted Tanguilig to construct a windmill
was issued. The company then told him that they would system for him, for consideration of 60,000.00. Pursuant
still hold him under the policy. The company then to the agreement Herce paid the downpayment of
confirmed that he paid the premium and that they would 30,000.00 and installment of 15,000.00 leaving a
extend the policy by one year. Thereby, the company 15,000.00 balance.
offered to reinstate same policy it had previously
cancelled and even proposed to extend its lifetime on Herce refused to pay the balance because he had already
finding that the cancellation was erroneous and that the paid this amount to SPGMI which constructed a deep
premiums were paid in full by petitioner-insured but well to which the windmill system was to be connected
were not remitted by the company's branch manager, Mr. since the deepwell, and assuming that he owed the
Malapit. However, they were too late for Areola already 15,000.00 this should be offset by the defects in the
filed an action for breach of contract in the trial court. windmill system which caused the structure to collapse
The company’s defense lay in rectifying its omission; after strong winds hit their place. According to
hence, there was no breach of contract. The court ruled Tanguilig, the 60,000.00 consideration is only for the
in favor of Areola and asked Prudential to pay 250,000 construction of the windmill and the construction of the
pesos in moral and exemplary damages. The court held deepwell was not part of it. The collapse of the windmill
cannot be attributed to him as well, since he delivered it Art. 1723 dictates that the engineer/architect and
in good and working condition and Herce accepted it contractor are liable for damages should the building
without protest. Herce contested that the collapse is collapse within 15 years from completion.
attributable to a typhoon, a force majeure that relieved
him of liability. Art. 1174 of the NCC, however, states that no person
shall be responsible for events, which could not be
The RTC ruled in favor of Tanguilig, but this decision foreseen. But to be exempt from liability due to an act of
was overturned by the Court of Appeals which ruled in God, the ff must occur:
favor of Herce
1) cause of breach must be independent of the will of the
Issue: debtor
2) event must be unforeseeable or unavoidable
Can the collapse of the windmill be attributed to force 3) event must be such that it would render it impossible
majeure? Thus, extinguishing the liability of Tanguilig? for the debtor to fulfill the obligation
4) debtor must be free from any participation or
Ruling: aggravation of the industry to the creditor.

Yes, in order for a party to claim exemption from In the case at bar, although the damage was ultimately
liability by reason of fortuitous event under Art 1174 of caused by the earthquake which was an act of God, the
the Civil Code the event should be the sole and defects in the construction, as well as the deviations in
proximate cause of the loss or destruction of the object the specifications and plans aggravated the damage, and
of the contract. lessened the preventive measures that the building would
otherwise have had.
Nakpil & Sons vs. CA

FACTS: Republic vs. Luzon Stevedoring

Private respondents – Philippine Bar Association (PBA) Facts:

– a non-profit organization formed under the corporation
law decided to put up a building in Intramuros, Manila. A barge being towed by tugboats "Bangus" and
Hired to plan the specifications of the building were "Barbero" all owned by Luzon Stevedoring Corp.
Juan Nakpil & Sons, while United Construction was rammed one of the wooden piles of the Nagtahan Bailey
hired to construct it. The proposal was approved by the Bridge due to the swollen current of the Pasig after
Board of Directors and signed by the President, Ramon heavy rains days before. The Republic sued Luzon
Ozaeta. The building was completed in 1966. Stevedoring for actual and consequential damages.
Luzon Stevedoring claimed it had exercised due
In 1968, there was an unusually strong earthquake which diligence in the selection and supervision of its
caused the building heavy damage, which led the employees; that the damages to the bridge were caused
building to tilt forward, leading the tenants to vacate the by force majeure; that plaintiff has no capacity to sue;
premises. United Construction took remedial measures and that the Nagtahan bailey bridge is an obstruction to
to sustain the building. navigation.

PBA filed a suit for damages against United Issue:

Construction, but United Construction subsequently filed
a suit against Nakpil and Sons, alleging defects in the Whether or not the collision of appellant's barge with the
plans and specifications. supports or piers of the Nagtahan bridge was in law
caused by fortuitous event or force majeure.
Technical Issues in the case were referred to Mr. Hizon,
as a court appointed Commissioner. PBA moved for the Held:
demolition of the building, but was opposed. PBA
eventually paid for the demolition after the building There is a presumption of negligence on part of the
suffered more damages in 1970 due to previous employees of Luzon Stevedoring, as the Nagtahan
earthquakes. The Commissioner found that there were Bridge is stationary. For caso fortuito or force
deviations in the specifications and plans, as well as majeure (which in law are identical in so far as they
defects in the construction of the building. exempt an obligor from liability) by definition, are
extraordinary events not foreseeable or avoidable,
ISSUE: "events that could not be foreseen, or which, though
foreseen, were inevitable" (Art. 1174, Civ. Code of the
Whether or not an act of God (fortuitous event) exempts Philippines). It is, therefore, not enough that the event
from liability parties who would otherwise be due to should not have been foreseen or anticipated, as is
negligence? commonly believed, but it must be one impossible to
foresee or to avoid. The mere difficulty to foresee the
HELD: happening is not impossibility to foresee the same.
Luzon Stevedoring knew the perils posed by the swollen
stream and its swift current, and voluntarily entered into
a situation involving obvious danger; it therefore assured
the risk, and can not shed responsibility merely because P1,552,200.00 and had been paying the P63,363.33
the precautions it adopted turned out to be insufficient. It monthly amortizations until September 1998.
is thus liable for damages.
Upon learning that construction works had stopped,
Salugada vs. FEU respondents likewise stopped paying their monthly
amortization. Claiming to have paid a total of
FACTS: P2,198,949.96 to petitioners, respondents through two
(2) successive letters, demanded a full refund of their
Petitioner Joseph Saludaga was a sophomore law student payment with interest. When their demands went
of respondent Far Eastern University (FEU) when he unheeded, respondents were constrained to file a
was shot by Alejandro Rosete (Rosete), one of the Complaint for Refund and Damages before the Housing
security guards on duty at the school premises on August and Land Use Regulatory Board (HLURB). Respondents
18, 1996. Petitioner was rushed to FEU-Dr. Nicanor prayed for reimbursement/refund of P2,198,949.96
Reyes Medical Foundation (FEU-NRMF) due to the representing the total amortization payments,
wound he sustained. Meanwhile, Rosete was brought to P200,000.00 as and by way of moral damages, attorney’s
the police station where he explained that the shooting fees and other litigation expenses.
was accidental. Saludaga thereafter filed a complaint for
damages against respondents on the ground that they On 13 June 2002, the HLURB in favor of herein
breached their obligation to provide students with a safe respondents. The Arbiter considered petitioners’ failure
and secure environment and an atmosphere conducive to to develop the condominium project as a substantial
learning. Respondents, in turn, filed a Third-Party breach of their obligation which entitles respondents to
Complaint against Galaxy Development and seek for rescission with payment of damages. The
Management Corporation (Galaxy), the agency Arbiter also stated that mere economic hardship is not an
contracted by respondent FEU to provide security excuse for contractual and legal delay.
services within its premises and Mariano D. Imperial
(Imperial), Galaxys President, to indemnify them for ISSUES:
whatever would be adjudged in favor of petitioner, if
any; and to pay attorneys fees and cost of the suit. Whether or not the Asian financial crisis constitute a
fortuitous event which would justify delay by petitioners
Issue: in the performance of their contractual obligation;

What is the source of FEU’s obligation to indemnify Ruling:

Saludaga? What is needed to prove that this obligation
of FEU exists? No. The Supreme Court held that the Asian financial
crisis is not a fortuitous event that would excuse
petitioners from performing their contractual obligation.
Ruling:
The Court ruled that “we cannot generalize that the
Culpa contractual. Asian financial crisis in 1997 was unforeseeable and
beyond the control of a business corporation. It is
It is settled that in culpa contractual, the mere proof of unfortunate that petitioner apparently met with
the existence of the contract and the failure of its considerable difficulty e.g. increase cost of materials and
compliance justify, prima facie, a corresponding right of labor, even before the scheduled commencement of its
relief. In the instant case, we find that, when petitioner real estate project as early as 1995. However, a real
was shot inside the campus by no less the security guard estate enterprise engaged in the pre-selling of
who was hired to maintain peace and secure the condominium units is concededly a master in projections
premises, there is a prima facie showing that respondents on commodities and currency movements and business
failed to comply with its obligation to provide a safe and risks. The fluctuating movement of the Philippine peso
secure environment to its students. in the foreign exchange market is an everyday
occurrence, and fluctuations in currency exchange rates
happen everyday, thus, not an instance of caso fortuito.”
Fil Estate Properties Inc. vs. Sps. Ronquillo
Metro Concast Steel Corp. vs. Allied Bank Corp
FACTS:
FACTS:
Petitioner Fil-Estate Properties, Inc. is the owner and
developer of the Central Park Place Tower while co- On various dates and for different amounts, Metro
petitioner Fil-Estate Network, Inc. is its authorized Concast through its officers, obtained several
marketing agent. Respondent Spouses Conrado and loans from Allied Bank. Petitioners failed to settle their
Maria Victoria Ronquillo purchased from petitioners an obligations. Allied Bank, through counsel, sent them
82-square meter condominium unit for a pre-selling demand letters, all dated December 10, 1998, seeking
contract price of P5,174,000.00. On 29 August 1997, payment of the total amount of P51,064,093.62, but
respondents executed and signed a Reservation to no avail. Thus, Allied Bank was prompted to file a
Application Agreement wherein they deposited complaint for collection of sum of money
P200,000.00 as reservation fee. As agreed upon, against petitioners before the RTC. Metro Concast
respondents paid the full downpayment of already ceased its business due to some reason. Hence,
in order to settle their debts with Allied Bank, they the date on and after which the instrument shall be
offered the sale of Metro Concast’s remaining assets to payable and the date of maturity is fixed in pursuance
Allied Bank, which the latter, however, refused. Peakstar thereof. Such being the case, as action should have been
Oil Corporation, expressed interest in buying the scrap brought for the purpose of having the court set a date on
metal. During the negotiations with Peakstar, petitioners which the instrument should become due and payable.
claimed Atty. Saw, a member of Allied Bank’s legal Until such action was prosecuted no suit could be
department, acted as the latter’s agent. A Memorandum instrument. It is, therefore, clear that this action is
of Agreement, through Atty. Saw, was drawn between premature. The instrument has been sued upon before it
Metro Concast, represented by petitioner Jose Dychiao, is due. The action must accordingly be dismissed.
and Peakstar under which Peakstar obligated itself to Ordinarily when an action of this sort is dismissed the
purchase the scrap metal. Unfortunately, Peakstar plaintiff may at once begin his action for the purpose of
reneged on all its obligations under the MOA. fixing a date upon which the instrument shall become
due. From the undisputed facts in this case and from the
ISSUE: facts and conditions that very probably
cannot be charged hereafter, it is our present opinion that
Whether or not the loan obligations incurred by the such action is itself prescribed. The judgment was
petitioners under the subject promissory note affirmed, with cost against the appellant.
and various trust receipts have already been
extinguished. Sicam vs. Jorge

RULING: FACTS: On different dates, Lulu Jorge pawned several

pieces of jewelry with Agencia de R. C. Sicam located in
No, Article 1231 of the Civil Code states that obligations Parañaque to secure a loan. On October 19, 1987, two
are extinguished either by payment or performance, the armed men entered the pawnshop and took away
loss of the thing due, the condonation or remission of the whatever cash and jewelry were found inside the
debt, the confusion or merger of the rights of creditor pawnshop vault. On the same date, Sicam sent Lulu a
and debtor, compensation or novation. Absent any letter informing her of the loss of her jewelry due to the
showing that the terms and conditions of the latter robbery incident in the pawnshop. Respondent Lulu then
transactions have been, in any way, modified or novated wroteback expressing disbelief, then requested Sicam to
by the terms and conditions in the MoA, said contracts prepare the pawned jewelry for withdrawal on
should be treated separately and distinctly from each November 6, but Sicam failed to return the jewelry.
other, such that the existence, performance or breach of Lulu, joined by her husband Cesar, filed a complaint
one would not depend on the existence, performance or against Sicam with the RTC of Makati seeking
breach of the other. indemnification for the loss of pawned jewelry and
payment of AD, MD and ED as well as AF. The RTC
Seone v. Franco rendered its Decision dismissing respondents’ complaint
as well as petitioners’ counterclaim. Respondents
FACTS: appealed the RTC Decision to the CA which reversed the
RTC, ordering the appellees to pay appellants the actual
This is an appeal from a judgment of the Court of First value of the lost jewelry and AF. Petitioners MR denied,
Instance of Zamboanga in favor of the plaintiff, holding hence the instant petition for review on Certiorari.
that the right of action upon the mortgage debt which
was the basis of the claim presented against Issue: are the petitioners liable for the loss of the pawned
the plaintiff’s estate had already prescribed. The articles in their possession? (Petitioners insist that they
mortgage in question, which is to secure the payment of are not liable since robbery is a fortuitous event and they
the sum of P4,876.01, the debtor agreeing to pay the sum are not negligent at all.)
―little by little.ǁ‖ After 27 years, nothing has been paid
either of the principal or of the interest. The obligation Ruling:
seems to leave the duration of the period for the payment
thereof to the will of the debtor. It appears also that it The Decision of the CA is AFFIRMED.
was the intention of the instrument to give the debtor
time within which to pay the obligation. YES
Article 1174 of the Civil Code provides:
Issue: Art. 1174. Except in cases expressly specified by the
law, or when it is otherwise declared by stipulation, or
Whether or not the creditor may demand immediate when the nature of the obligation requires the
performance of the obligation, given that there is no date assumption of risk, no person shall be responsible for
stipulated by the parties as to when it should become due those events which could not be foreseen or which,
and payable. though foreseen, were inevitable. Fortuitous events by
definition are extraordinary events not foreseeable or
Ruling: avoidable. It is therefore, not enough that the event
should not have been foreseen or anticipated, as is
In such cases this court has held, on several occasions, commonly believed but it must be one impossible to
that the obligation is not due and payable until an action foresee or to avoid. The mere difficulty to foresee the
has been commenced by the mortgagee against the happening is not impossibility to foresee the same.
mortgagor for the purpose of having the court fix
Austria vs. CA
As Article 1174 provides, no person shall be responsible
Facts: for a fortuitous event which could not be foreseen, or
which, though foreseen was inevitable. In other words,
Maria G. Abad received from Guillermo Austria one (1) there must be an entire exclusion of human agency from
pendant with diamonds to be sold on commission basis the cause of injury or loss.
or to be returned on demand. Maria Abad while walking
home, two men snatched her purse containing jewelry
and cash, and ran away. Thus, Abad failed to return the
jewelry or pay its value notwithstanding demands.
Austria filed an action against Abad and Abad’s husband
for recovery of the pendant or of its value, and damages.
Abad raised the defense that the alleged robbery had
extinguished their obligation.

Issue:

Whether or not Abad was negligent.

Ruling:

No. In 1961, when the robbery in question did take

place, for at that time criminality had not by far reached
the levels attained in the present day. The diligence that
Abad portrayed when she went home before she was
robbed was not a sign of negligence on her part.

Yobido v CA

Facts:

On April 26, 1988, spouses Tito and Leny Tumboy and

their minor children, Ardee and Jasmin, boarded at
Mangagoy, Surigao del Sur, a Yobido bus bound for
Davao City. Along Picop road in Km. 17, Sta. Maria,
Agusan del Sur, the left front tire of the bus suddenly
exploded. The bus fell into a ravine around three (3) feet
from the road and struck a tree which resulted in the
death of Tito Tumboy and physical injuries to other
passengers. Thereafter, a complaint for breach of
contract of carriage, damages and attorney's fees was
filed by Leny and her children against Alberta Yobido,
the owner of the bus, and Cresencio Yobido, its driver in
the Regional Trial Court of Davao City.

Issue:

Whether the tire blow-out is a fortuitous event

Ruling:

No.

A fortuitous event is possessed of the following

characteristics:
(a) the cause of the unforeseen and unexpected
occurrence, or the failure of the debtor to comply with
his obligations must be independent of human will;
(b) it must be impossible to foresee the event which
constitutes the caso fortuito, or if it can be foreseen, it
must be impossible to avoid;
(c) the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a
normal manner; and
(d) the obligor must be free from any participation in the
aggravation of the injury resulting to the creditor.