case digests - Pelayo vs. Lauron


Pelayo vs. Lauron
12 Phil. 453

FACTS
On November 23, 1906, a physician named Arturo Pelayo filed a complaint against Marelo Lauron and Juana Abellana. On the night of October 13th of the same year, the plaintiff was called to render medical assistance to the defendant’s daughter-in-law, who was about to gie birth. After the consultation of Dr. Escaño, it was deemed that the operation was going to be difficult for child birth, but regardless, Dr. Pelayo proceeded with the job of operating on the subject and also removed the afterbirth. The operation went on until morning, and on the same day, visited several times and billed the defendants the just amount of P500 for the services rendered to which defendants refused to pay. In answer to the complaint, counsel for the defendants denied all of the allegation and alleged as a special defense, that their daughter-in-law had died in
consequence of the said childbirth, that when she was alive she lived with her husband independently and in a separate house without any relation whatever with them, and that, if on the day when she gave birth she was in the house of the defendants, her stay their was accidental and due to fortuitous circumstances. Therefore, he prayed that the defendants be absolved of the complaint with costs against the plaintiff.

ISSUE
Can the defendants be held liable to pay for the obligation?

RULING
No. According to article 1089 of the Civil Code, obligations are created by law, by contracts, by quasicontracts, and by illicit acts and omissions or by those in which any kind of fault or negligence occurs. Obligations arising from law are not presumed. Those expressly determined in the code or in special laws, etc., are the only demandable ones. Obligations arising from contracts have legal force between the contracting parties and must be fulfilled in accordance with their stipulations. (Arts. 1090 and 1091.) The rendering of medical assistance in case of illness was comprised among the mutual obligations to which the spouses were bound by way of mutual support. (Arts. 142 and 143.) If every obligation consists in giving, doing or not doing something (art. 1088), and spouses were mutually bound to support each other, there can be no question but that, when either of them by reason of illness should be in need of medical assistance, the other was under the unavoidable obligation to furnish the necessary services of a physician in order that health may be restored, and he or she may be freed from the sickness by which life is jeopardized. The party bound to furnish such support was therefore liable for all expenses, including the fees of the medical expert for his professional services. In the face of the above legal precepts, it was unquestionable that the person bound to pay the fees due to the plaintiff for the professional services that he rendered to the daughter-in-law of the defendants during her childbirth, was the husband of the patient and not her father and mother- in-law of the defendants herein.
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case digests - Sagrada Orden vs. National Coconut Corporation


Sagrada Orden vs. National Coconut Corporation
91 SCRA 503

FACTS
Petitioner, Sagrada Orden owned a land which was acquired by a Japanese corporation during the Japanese military occupation. After the liberation, the Alien Property Custodian took possession, control and custody of the land. The Copra Export Management Company occupied the property and when it vacated, the
respondent, National Coconut Corporation occupied it through the representation made by the Philippine Government to the Alien Property Custodian. The property was returned to Sagrada Orden upon judgment that the contract of sale of the property in favour of the Japanese corporation was null and void and upon payment of the consideration it received for the property to the Philippine Alien Property Administration. Sagrada Orden was also given the right to recover from National Coconut Corporation reasonable rentals for the use and occupation of the premises. Sagrada Orden filed an action to recover rentals from National Coconut Corporation from the time it used and occupied the premises. National Coconut Corporation claimed that it was willing to pay only from the time the property was returned to Sagrada Orden and not before, for it occupied the property in good faith, under no obligation to pay the rentals.

ISSUE
Was National Coconut Corporation liable for rentals prior to the date the property was returned to Sagrada Orden?

RULING
No. National Coconut Corporation was not liable for the rentals prior to the date the property was returned to Sagrada Orden. For National Coconut Corporation to be liable, its obligation must arise from the law, contract or quasi- contract, crime or negligence as provided by Article 1157 of the Civil Code which was taken from Article 1089 of the old Civil Code. As none of these sources were present, National Coconut Corporation cannot be held liable. There was also no express agreement between the entity which had legal control and administration of the property and the National Coconut Corporation for the latter to pay rentals on the property so there was no obligation.
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case digests - Leung Ben vs. P.J. O’Brien


Leung Ben vs. P.J. O’Brien
G.R. No. L-13602 | April 6, 1918

FACTS
An action was instituted in the Court of First Instance of the city of Manila by P. J. O'Brien to recover the sum of P15,000 alleged to have been lost by Leung Ben to P.J. O’Brien in a series of gambling, banking and percentage games conducted during the two or three months prior to the institution of the suit. In Leung Ben’s verified complaint, O’Brien asked for an attachment against the property of Leung Ben on the ground that the latter was about to depart from the Philippine Islands with intent to defraud his creditors. This attachment was issued, and acting under that authority, the sheriff attached the sum of P15,000 which had been deposited by the O’Brien with the International Banking Corporation. Leung Bien filed a motion to quash the attachment, which was dismissed by the court. Hence this application for a writ of certiorari, the purpose of which was to quash an attachment issued from the Court of First Instance of the City of Manila.

ISSUE:
Was the statutory obligation to restore money won at gaming an obligation arising from "contract, express or implied?"

RULING
Yes. Upon general principles, recognized both in the civil and common law, money lost in gaming and voluntarily paid by the loser to the winner cannot, in the absence of statute, be recovered in a civil action. But Act No. 1757 of the Philippine Commission, which defines and penalizes several forms of gambling, contains numerous provisions recognizing the right to recover money lost in gambling or in playing certain games. The original complaint filed in the Court of First Instance was not clear as to the particular section of Act No. 1757 under which the action was brought, but was alleged that the money was lost at gambling, banking, and percentage game in which the defendant was a banker. It must therefore be assumed that the action was based upon the right of recovery given in section 7 of said Act, which declared that an action may be brought against the banker by any person losing money at a banking or percentage game. It was observed that according to the Civil Code obligations are supposed to be derived either from (1) the law, (2) contracts and quasi-contracts, (3) illicit acts and omission, or (4) acts in which some sort ob lame or negligence is present. This enumeration of sources of obligations and the obligation imposed by law are different types. The obligations which in the Code are indicated as quasi-contracts, as well as those arising ex lege, are in the common la system, merged into the category of obligations imposed by law, and all are denominated implied contracts. In the case under consideration, the duty of O’Brien to refund the money which he won from the LeungBen at gaming was a duty imposed by statute. It therefore arose ex lege. Furthermore, it was a duty to return a certain sum which had passed from O’Brien to Leung Ben. By all the criteria which the common law supplies, this a duty in the nature of debt and is properly classified as an implied contract. It was well- settled by the English authorities that money lost in gambling or by lottery, if recoverable at all, can be recovered by the loser in an action of indebitatus assumpsit for money had and received. This meant that in the common law the duty to return money won in this way was an implied contract, or quasi-contract. The phase in question should be interpreted in such a way as to include all obligations, whether arising from consent or ex lege, because that was equivalent to eliminating all distinction between the first and the fifth paragraphs by practically striking out the first two lines of paragraph one. The Legislature had deliberately established this distinction, and while we may be unable to see any reason why it should have been made, it was our duty to apply and interpret the law, and we were not authorized under the guise of interpretation to virtually repeal part of the statute. Nor can it be said that the relations between the parties litigant constitute a quasi-contract. In the first place, quasi- contracts are "lawful and purely voluntary acts by which the authors thereof become obligated in favor of a third person. . . ." The act which gave rise to the obligation ex lege relied upon by Leung Ben in the court below is illicit an unlawful gambling game. In the second place, the first paragraph of section 412 of the Code of Civil Procedure does not authorize an attachment in actions arising out of quasi contracts, but only in actions arising out of contract, express or implied.
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case digests - Pe vs. Intermediate Appellate Court


Pe vs. Intermediate Appellate Court
195 SCRA 137

FACTS
Plaintiff spouses Francisco and Anita Pe entered into a contract to sell their 5 parcels of land. These parcels of land were mortgaged with different banking institutions. Lots Nos. 40 and 41 were mortgaged to the Philippine Veterans Bank (PVB) for P351,162.59; Lots Nos. 42 and 45 were mortgaged to the Development Bank of the Philippines (DBP) for P189,322.49; and Lot No. 47 to Philippine Commercial and Industrial Bank (PCIB) for P57,000. On September 20, 1976, the plaintiffs executed a contract to sell. The plaintiffs were paid the total amount of 351,162.59 to PVB for lots 40 and 41. On the same date, they executed in favor of Domingo Sy a deed of sale over Lots Nos. 42 and 45 after payment by the latter of the former's account with the DBP in the amount of P189,322.49. Consequently, a contract to sell and a corresponding deed of sale covering Lot No. 47 were prepared but the deed did not materialize as the buyer’s offer of P49,454.92, as payment for Lot No. 47, was rejected by the Pe spouses, the latter insisted on the full payment of their obligation with the (PCIB) in the amount of P383,615.97 and P620,000 as the alleged consideration stipulated in the Contract to Sell. Pe allege that the consideration of the Contract to Sell was P1,544,161.05 and not P620,000.

ISSUE:
Was the contention of the plaintiffs valid?

RULING:
No. The words of the Contract to Sell were clear and left no doubt upon the true intention of the contracting parties. The condition laid down in paragraph (2) of the contract did not provide for an additional consideration, but only for the manner in which the consideration was to be applied. It clearly provided that payment shall be applied to petitioners' obligations with the bank where the respective properties were mortgaged, and upon their release, petitioners shall execute the final deed of sale. The subsequent acts of the parties conformed with this condition. Thus, the parties should be bound by such written contract. It should also be noted that at the time of the execution of the Contract to Sell, the total obligation due to the PCIB as regards Lot No. 47 was only P 99,374.89. The rise of the same obligation to P383,615.96 was brought about by subsequent loans the petitioners obtained with the same bank for which the tractor and an "Offset Discharrow" were given as additional security. Contracts are respected as the law between the contracting parties. The parties may establish such stipulations, clauses, terms and conditions as they may want to include. As long as such agreements are not contrary to law, morals, good customs, public policy or public order, they shall have the force of law between.
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notes - obligations and contracts

Attached is my own notes for Obligations and Contracts (without cases). Based some of them from the lectures of Atty. Mikhail Lee Maxino and from his required book by Arturo Tolentino. 


Enjoy!
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case digests - Sagrada Orden vs. National Coconut Corporation

Sagrada Orden vs. National Coconut Corporation

91 PHIL. 503

FACTS
Plaintiff Sagrada Orden owned a piece of real property in Pandacan, Manila. During the Japanese occupation, the land was acquired by a Japanese corporation Taiwan Tekkoshho. After the liberation, the Alien Property Custodian of the United States took possession, control, and custody of the real property. During the year 1946, the property was occupied by the Copra Export Management Company under the custodianship agreement with United States Alien Property Custodian, and when it vacated, the property 
occupied by defendant National Coconut Corporation. Sagrada Orden made claim to the property before the Alien Property Custodian of the United States but was denied. So plaintiff brought an action in court to annul the sale of property of Taiwan Tekkosho, and recover its possession. The case did not come for trial because the parties presented a joint petition in which it is claimed by Sagrada Orden that the sale in favor of Taiwan Tekkosho was null and void because it was executed under threats, duress, and intimidation, and that the title be re-issued to Sagrada Orden. The court rendered judgment releasing the defendant from liability, but reversing to the plaintiff the right to recover from the defendant reasonable rentals for the use and occupation of the premises. The present action to recover the reasonable rentals from August 1946, the date when defendant began to occupy, to the date it vacated it. The defendant did not contest its liability for the rentals at the rate of P3, 000 per month from February 28, 1949, but resisted the claim therefore prior to that date. Defendant contends that it occupied the property in good faith, under no obligation to pay rentals for the use and occupation. Judgment rendered for the plaintiff to recover from the defendant the sum of P3, 000 a month, from August, 1946, to the date the defendant vacates the premises. Thus this appeal made by defendant.


ISSUE
Can the defendant company be held liable to pay rentals from August 1946 to the date it vacated?

RULING
No. If defendant-appellant is liable at all, its obligations, must arise from any of the four sources of obligations, namely, law, contract or quasi-contract, crime, or negligence. Defendant-appellant is not guilty of any offense at all, because it entered the premises and occupied it with the permission of the entity which had the legal control and administration thereof, the Alien Property Administration. Neither was there any negligence on its part. There was also no privity between the Alien Property Custodian and the Taiwan Tekkosho, which had secured the possession of the property from the plaintiff-appellee by the use of duress, such that the Alien Property Custodian or its permittee (defendant-appellant) may be held responsible for the supposed illegality of the occupation of the property by the said Taiwan Tekkosho. The Alien Property Administration had the control and administration of the property not as successor to the interests of the enemy holder of the title, the Taiwan Tekkosho. Neither is it a trustee of the former owner, the plaintiff-appellee herein, but a trustee of then Government of the United States, in its own right, to the exclusion of, and against the claim or title of, the enemy owner. From August, 1946, when defendant-appellant took possession, to the late of judgment on February 28, 1948, Alien Property Administration had the absolute control of the property as trustee of the Government of the United States, with power to dispose of it by sale or otherwise, as though it were the absolute owner. Therefore, even if defendant-appellant were liable to the Alien Property Administration for rentals, these would not accrue to the benefit of the plaintiff-appellee, the owner, but to the United States Government.
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case digests - Ang Yu Asuncion vs. Court of Appeals


Ang Yu Asuncion vs. CA 
238 SCRA 602  | 1994

FACTS
On July 29, 1987, a Second Amended Complaint forSpecific Performance was filed by Ang Yu Asuncion and Keh Tiong, et al., against Bobby Cu Unjieng and Jose Tan before the Regional Trial Court of Manila. The plaintiffs were tenants or lessees of residential and commercial spaces owned by defendants in Binondo, Manila. On several conditions defendants informed the plaintiffs that they are offering to sell the premises and are giving them priority to acquire the same. During negotiations, Bobby Cu Unjieng offered a price of P6- million while plaintiffs made a counter of offer of P5- million. Plaintiff thereafter asked the defendants to put their offer in writing to which the defendants acceded. In reply to defendants’ letter, plaintiffs wrote, asking that they specify the terms and conditions of the offer to sell. When the plaintiffs did not receive any reply, they sent another letter with the same request.Since defendants failed to specify the terms and conditions of the offer to sell and because of information received that the defendants were about to sell the property, plaintiffs were compelled to file the complaint to compel defendants to sell the property to them. The court dismissed the complaint on the ground that the parties did not agree upon the terms and conditions of the proposed sale, hence, there was no contact of sale at all.  On November 15, 1990, the Cu Unjieng spouses executed a Deed of Sale transferring the property in question to Buen Realty and Development Corporation. Buen Realty, as the new owner of the subject property, wrote to the lessees demanding the latter to vacate the premises. In its reply, it stated that Buen Realty and Development Corporation brought the property subject tothe notice of lis pendens.

ISSUE
Can Buen Realty be bound by the writ of execution by virtue of the notice of lis pendens?

RULING
No. An obligation is a juridical necessity to give, to do or not to do (Art. 1156, Civil Code). The obligation is upon the concurrence of the essential elements thereof, viz: (a) the vinculum juris or juridical tie which is the efficient cause established by the various sources of obligations; (b) the object which is the prestation or conduct, required to observed; and (c) the subject-persons who, viewed demandability of the obligation are the active (oblige) and the passive (obligor) subjects.  Among the sources of an obligation is a contract (Art. 1157), which is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. A contract undergoes various stages that include its negotiation or preparation, its perfection and, finally, its consummation. Until the contract is perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation. In sales, particularly, to which the case at bench belongs, the contract is perfected when a person, called the seller, obligates himself, for a price certain, to deliver and to transfer ownership of a thing or right to another, called the buyer, over which the latter agrees. The registration of lis pendens must be independently addressed in appropriate proceedings.Therefore, Buen Realty cannot be held subject to the writ of execution issued by the respondent Judge, let alone ousted from the ownership and possession of the property, without first being duly afforded its day in court.
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