ASUNCION VS. CA, G.R. NO.

109125, December 2, 1994

FACTS:
A complaint was filed by Ang Yu Asuncion et al., who claimed to be a tenant against the
defendant Bobby Cu Unjieng in the residential and commercial space he owned since
1935 in Binondo, and they have been paying rentals since then. On some occasion,
Unjieng offered to sell the properties and Ang Yu Asuncion was given the priority to
acquire the same. Unjieng offered the price of property for P6 million while Asuncion
counter offer of P5 million. However, both parties are yet to agree on terms and
condition.
Thereafter, Asuncion asked Unjieng to put their offer in writing which the later acceded.
In the defendant’s letter, the plaintiff wrote, asking the defender twice for the term and
condition of the offer to sell, which the defender did not respond.
Later, the plaintiffs received information that the property was about to be sold, which
compelled them to file a complaint to Unjieng to sell the property to them.
The court dismissed the complaint on the ground that Unjieng’s offer to sell were not
accepted, since both parties did not agree upon the terms and conditions of the
proposed sale, hence, there was no contract of sale at all.
The property was then sold to Buen Realty and Development Corporation for P15
million, and transferring the title of property through a Deed of sale. Buen Realty, as a
new owner demanded the petitioner to vacate the premises that cause the petitioner to
file a Motion for Execution in Court of Appeals Judgement.
The court ruled in favor of the petitioner and ordered the defendant to nullify the sale
and set aside the title issued to Buen Realty for being executed in bad faith. Then, the
Court of Appeals reversed itself when the Private Respondents Appealed.
ISSUES:
Whether or not the agreement developed a perfect contract.
RULING:
No. The agreement between Unjieng and Asuncion did not develop a perfect contract of
sale under Article 1458 of the Civil Code. Until the contact is perfected, it cannot be the
source of obligation, since an obligation is a juridical necessity to give, to do or not to do
(Art. 1156, Civil Code). Since a contract does not exist between both parties, a Right of
First Refusal may not be enforced through an action of specific performance.
DBP vs CONFESOR, G.R. NO. L-48889 May 11,1989
FACTS:
Spouses Patricio Confesor and Jovita Villafuerte obtained an agricultural loan from
Agricultural and Industrial Bank, now Development Bank of the Philippines, in the sum
of P2,000.00 as evidence by promissory note whereby they bound themselves to pay
the amount in ten equal yearly amortizations.
As the debt remained unpaid even after the lapse of 10 years. Confesor, a member of
the Congress, executed a secondary promissory note expressly acknowledging said
load and promising to pay the same.
The spouses still failed to pay on the specified date. As a result, the Development Bank
of the Philippine filed a complaint against the spouses for the payment of the loan. The
court give judgement and ordered the defendants to pay the loan. On appeal, the
decision was reversed and the complaint dismissed.
ISSUES:
Whether or not a promissory which was executed in consideration of the previous
promissory note which was already barred by prescription is valid.
RULING:
Yes. The second promissory note is valid because its not a mere acknowledgement of
the debt that has prescribed already, it is a new promise to pay the debt. It is according
to (Art. 1112) where, “a person with capacity to alienate property may renounce
prescription already obtained, but not the right to prescribe in the future. Prescription is
deemed to have been tacitly renounced when the renunciation results from acts which
imply the abandonment of the right acquired.” Although a debt barred by prescription is
enforceable, a new contract recognizing the prescribed debt would be valid and
enforceable.

PELAYO V. LAURON 12 Phil. 453

FACTS:
Arturo Pelayo a physician rendered medical assistance during child delivery of the
defendant’s daughter-in-law. A consultation value of his service amounting P500.00
which is just and equitable since it was deemed that the operation was a difficult for
child birth, but regardless Dr Pelayo proceed with the job of operating the subject and
removed the afterbirth. The operation went smoothly and on the same day, visited and
billed the defendant the just amount of P500 for the service rendered which the
defendant refused to pay without alleging any good reason.
The defendant denied all of allegation as a special defense, contending that their
daughter-in-law had died in consequence of the said child birth, and that when she was
alive, she lived with her husband independently and in a separate house, that on the
day she gave birth she was in the house of the defendant and her stay there was
accidental and due to fortuitous circumstances.
ISSUES:
Who’s oblige to pay the bill for Pelayo?
RULING:
According to (Art 1089) obligations are created by law, by contracts, by quasi-contracts,
by illicit acts and omissions or by those which any kind of fault or negligence occurs.
The rendering of medical assistance in case of illness is comprise among the mutual
obligations to which the spouses are bound by way of mutual support as provided by
the law or the Code. As a result, the obligation to pay the bill for Pelayo for the medical
assistance rendered to the defendant’s daughter-in-law must be paid by the husband.

METROPOLITAN BANK AND TRUST COMPANY vs ANA GRACE ROSALES AND YO

YUK TO, G.R. No. 183204, January 13, 2014
FACTS:
Metropolitan bank (petitioner) is a domestic banking corporation organized and existing
under the laws of the Philippines. Anna Grace Rosales is the owner of a travel agency
while Yo Yuk To is her mother (respondents). The respondents opened a Joint Peso
Account with petitioner’s Pritil-Tondo Branch.
In May 2002, respondent Rosales accompanied her client Liu Chiu Fang, a Taiwanese
National applying for a retiree’s visa from the Philippine Leisure and Retirement
Authority (PLRA), to petitioner’s branch in Escolta to open a savings account. Since Liu
Chiu Fang could speak only in Mandarin, respondent Rosales acted as an interpreter
for her.
On March 3, 2003, respondents opened with petitioner’s Pritil-Tondo Branch a Joint
Dollar Account with an initial deposit of US$14,000.00. On July 31, 2003, petitioner
issued a “Hold Out” order against respondents’ accounts.
The petitioner, through its Special Audit Department Head Antonio Ivan Aguirre, filed
before the Office of the Prosecutor of Manila a criminal case for Estafa through False
Pretenses, Misrepresentation, Deceit, and Use of Falsified Documents.
Respondent Rosales, however, denied taking part in the fraudulent and unauthorized
withdrawal from the dollar account of Liu Chiu Fang.
On December 15, 2003, the Office of the City Prosecutor of Manila issued a Resolution
dismissing the criminal case for lack of probable cause. On September 10, 2004,
respondents filed before the RTC of Manila a complaint for Breach of Obligation and
Contract with Damages.
ISSUE:
Whether Metropolitan bank breached its contract with respondents.
RULING:
Yes. The Court held that Metropolitan bank’s reliance on the “Hold Out” clause in the
Application and Agreement for Deposit Account is misplaced.
Bank deposits, which are a simple loan, must be paid upon demand by the depositor.
The “Hold Out” clause applies only if there is a valid and existing obligation arising from
any of the sources of obligation enumerated in Article 1157 of the Civil Code. In this
case, petitioner failed to show that respondents have an obligation to it under any law,
contract, quasi-contract, delict, or quasi-delict. And although a criminal case was filed by
petitioner against respondent Rosales, this is not enough reason for petitioner to issue a
“Hold Out” order as the case is still pending and no final judgment of conviction has
been rendered against respondent Rosales.

ADILLE vs. CA, G.R. NO. L-44546 January 29, 1988

FACTS:
The property being quarreled was originally owned by Felisa Alzul who got married
twice. Her child in the first marriage was petitioner Rustico Adile and her children in the
second marriage were respondents Emetria Asejo.
In her lifetime, Felisa Alzul sold the property in Pacto de retro with 3 years repurchase
period, but Felisa died before she could repurchase the property.
During the redemption period, Rustico Adille repurchased the property by himself alone
at his own expense, and after that, he executed a deed of extra-judicial partition
representing himself to be the only heir and child of his mother Felisa. Consequently, he
was able to secure the title in his name alone.
His half-siblings, filed a case for partition and accounting claiming that Rustico was only
a trustee on an implied trust when he redeemed the property, and so, he cannot claim
exclusive ownership of the entire property.
ISSUE:
Whether or not a co-owner may acquire exclusive ownership over the property held in
common.
Whether or not Rustico had constituted himself a negotiorum gestor.
RULING:
Yes. The petitioner, in taking over the property, did so on behalf of his co-heirs, in which
event, he had constituted himself a negotiorum gestor under (Art 2144 of the Civil
Code), or for his exclusive benefit, in which case, he is guilty of fraud, and must act as
trustee, the respondents being the beneficiaries, pursuant to (Art 1456).

ANDRES vs. MANUFACTURERS HANOVER & TRUST CORPORATION, G.R. NO.

82670 September 15, 1989
FACTS:
Andres, with the business name “Irene’s Wearing Apparel” was engaged in the
manufacture of lady’s garments, children’s wear, men’s apparel, and linens for local and
foreign buyers. Among the foreign buyers was Facts of the United States.
Sometime in August 1980, Facets instructed the First National State Bank (FNSB) of
New Jersey to transfer $10,000 to Irene’s Wearing Apparel via Philippine National Bank
(PNB) in Sta. Cruz, Manila branch. FNSB instructed Manufacturers Hanover and Trust
Corporation (Mantrust) to affect the transfer by charging the amount to the account of
FNSB with the private respondent.

After Mantrust effected the transfer, the payment was not affected immediately because
the payee designated in the telex was only “Wearing Apparel.” Private respondent sent
PNB another telex stating that the payment was to be made to “Irene’s Wearing
Apparel.”
On August 28, 1980, petitioner received the remittance of $10,000. After learning about
the delay, Facts informed FNSB about the situation. Facts, unaware that petitioner had
already received the remittance, informed private respondent, and amended its
instruction by asking it to affect the payment to Philippine Commercial and Industrial
Bank (PCIB) instead of PNB.
Private respondent, also unaware that petitioner had already received the remittance,
instructed PCIB to pay $10,000 to petitioner. Hence, petitioner received another
$10,000 which was charged again to the account of Facets with FNSB.
FNSB discovered that private respondent had made a duplication of remittance. Private
respondent asked petitioner to return the second remittance of $10,000 but the latter
refused to do so contending that the doctrine of solution indebiti does not apply because
there was negligence on the part of the respondents and that they were not unjustly
enriched since Facets still has a balance of $49,324.
ISSUE:
Whether or not the private respondent has the right to recover the second $10,000
remittance it had delivered to petitioner
RULING:
Yes. (Art 2154 of the New Civil Code) is applicable. The following requisites must
concur: (1) that he who paid was not under obligation to do so; and (2) that payment
was made by reason of an essential mistake of fact.
There was a mistake, not negligence, in the second remittance. It was evident by the
fact that both remittances have the same reference invoice number.

SANTOS VENTURA HOCORMA FOUNDATION, INC., vs. SANTOS, G.R. NO. 153004,
November 5, 2004
FACTS:
On October 26, 1990, the parties executed a Compromise Agreement which amicably
ended all their pending litigations. Wherein Foundation shall pay Santos P14.5 million in
the following manner: (1) Foundation shall pay Santos of P14.5 million with P1.5 million
immediately upon the execution of the agreement; and (2) the balance of P13 Million
shall be paid, whether in lump sum or in installments, at the discretion of the
Foundation, within a period of not more than two years from the execution of this
agreement. In compliance with the Compromise Agreement, respondent Santos moved
for the dismissal of the aforesaid civil cases. He also caused the lifting of the notices of
the real properties involved. For its part, petitioner SVHFI, paid P1.5 million to
respondent Santos, leaving a balance ofP13 million. Subsequently, petitioner SVHFI
sold to Development Exchange Livelihood Corporation two real properties, which were
previously subjects of lis pendens. Discovering the disposition made by the petitioner,
respondent Santos sent a letter to the petitioner demanding the payment of the
remaining P13 million, which was ignored by the latter. Respondent Santos sent
another letter to petitioner inquiring when it would pay the balance of P13 million. There
was no response from petitioner. Consequently, respondent Santos applied with the
Regional Trial Court of Makati City for the issuance of a writ of execution. On June 2,
1995, Santos and Riverland Inc. filed a Complaint for Declaratory Relief and Damage
alleging delay on the part of SVHFI in paying the balance. They further alleged that
under the Compromise Agreement, the obligation became due on October 26
1992, but payment of the remaining balance was affected only on November
22, 1994. Thus, respondents prayed that petitioner be ordered to pay legal interest
on the obligation, penalty, attorney’s fees, and costs of litigation. SVHFI alleged that the
legal interest on account of fault or delay was not due and payable, considering that
the obligation had been superseded by the compromise agreement. Moreover,
SVHFI argued that absent a stipulation, Santos must ask for judicial intervention for
purposes of fixing the period
For the debtor to be in default, it is necessary that the following requisites be present:
(1) that the obligation be demandable and already liquidated; (2) that the debtor delays
performance; and (3) that the creditor requires the performance judicially or extra
judicially. In the case at bar, the obligation was already due and demandable after the
lapse of the two-year period from the execution of the contract. The Compromise
Agreement was entered into by the parties on October 26, 1990. It was judicially
approved on September 30, 1991. Applying existing jurisprudence, the compromise
agreement as a consensual contract became binding between the parties upon its
execution and not upon its court approval. From the time a compromise is validly
entered, it becomes the source of the rights and obligations of the parties thereto.
Hence, the two-year period must be counted from October 26, 1990. Verily, the
petitioner is liable for damages for the delay in the performance of its obligation. This is
provided for in Article 1170 of the New Civil Code.
ISSUES:
Whether the Court of Appeals committed reversible error when it awarded legal interest
in favor of the respondents notwithstanding the fact that neither in the compromise
agreement nor in the compromise of judgment by the judge provides for payment of
interest to the respondent?
RULING:
On October 4, 1996, the trial court rendered a Decision dismissing the respondents'
complaint and ordering them to pay attorney's fees and exemplary damages to
petitioner. Respondents then appealed to the Court of Appeals.
The only issue to be resolved is whether the respondents are entitled to legal interest.
The appellate court reversed the ruling of the trial court: Wherefore, finding merit in the
appeal, the appealed decision is hereby reversed and judgment is hereby rendered
ordering appellee SVHFI to pay appellants Santos and Riverland, Inc. The legal interest
on the principal amount of P13 million at the rate of 12% per annum from the date of
demand on October 28, 1992 up to the date of actual payment of the whole obligation;
P20,000 as attorney's fees and costs of suit.

RODRIGO RIVERA VS. SPOUSES SALVADOR C. CHUA AND VIOLETA S. CHUA/

SPOUSES C. CHUA AND VIOLETA S. CHUA VS. RODRIGO RIVERA, G.R. Nos.
184458/184472. January 14, 2015 (1169)
FACT:
On 24 February 1995, Rivera obtained a loan from the Spouses Chua.
RIVERA promise to pay spouses the sum of One Hundred Twenty Thousand
(P120,000.00) on December 31, 1995 with (5%) interest monthly.
Spouses Chua received another check issued by Rivera duly signed and dated, but
blank as to payee and amount, both checks were simply partial payment for Rivera's
loan in the principal amount of P120,000.00, the two checks were discredit for the
reason being the account is closed.
Rivera countered that he never executed the subject Promissory Note. The loans were
always covered by a security.
Both trial courts found the Promissory Note as authentic and validly bore the signature
of Rivera
ISSUES:
Rivera claimed forgery of the subject Promissory Note and denied his indebtedness.
RULING:
We cannot give credence to such a naked claim of forgery because bare denial will be
disputed by testimony of a handwriting expert from NBI. With (Art 2209) specifically
applicable in this instance where; the obligation is for a sum of money; and the debtor,
Rivera, incurred in delay when he failed to pay on or before 31 December 1995; and the
Promissory Note provides for an indemnity for damages upon default of Rivera which is
the payment of a 5% monthly interest from the date of default.