Makati Stock Exchange vs Campos,

G.R No. 138814, April 16, 2009

FACTS:
On February 10, 1994, Miguel V. Campos, the respondent, filed with the Securities,
Investigation and Clearing Department (SICD) under the wing of the Securities
Exchange Commission (SEC) a petition against the Makati Stock Exchange, Inc.
(MKSE) and its directors which sought to effectively nullify the resolution of the MKSE
Board of Directors which purportedly deprived him of his right to participate equally in
the allocation of Initial Public Offerings (IPO) of corporations registered with MKSE and
sought the delivery of the IPO shares he was allegedly deprived of, for which he would
pay the IPO prices due him. 
Campos' petition before the SICD was dismissed by the SEC en banc on August 14,
1995. Campos then petitioned the Court of Appeals for a writ of certiorari. The Court of
Appeals granted the petition and rendered the SEC order null and void. MKSE filed a
Petition for Review on Certiorari under Rule 45 before the Supreme Court.

ISSUE: 
Whether or not the respondent has a cause of action to file a case against the
petitioner?

RULING:
No. A cause of action is the act or omission by which a party violates a right of another
and has three, namely: (1) the legal right of the plaintiff, (2) the correlative obligation of
the defendant, and (3) the act or omission of the defendant in violation of said legal
right. Additionally, Article 1157 of the Civil Code states that a right is a claim or title to an
interest in anything enforceable by law.
The allocation of IPO shares was merely claimed to have been done in accordance with
a practice or custom commonly observed by the stock exchange members. However, a
practice or custom, on the other hand, is not, in general, a source of a legally
demandable or enforceable right, and there is nothing in the respondent's petition from
which the Court can conclude that, as Chairman Emeritus of MKSE, he was granted the
right to subscribe to IPOs of corporations listed on the stock exchange at their offering
price only in the name of law, contract, or any other legal source (Art. 1157). In the end,
for every right enjoyed by any person, there is a corresponding obligation on the part of
another person to respect such right.
Bachrach Moter Co. v. Esteva No. 40233,
14 February 1934
FACTS:
Esteva bought trucks from Teal Motor Co., Inc through promissory notes, secured by a chattel
mortgage. Teal Motor Co., Inc endorsed the notes to Bachrach Motor Co., Inc. Esteva failed to make
payments of certain notes. Teal Motor Co., Inc initiated foreclosure proceedings. Subsequently,
Bachrach Motor Co., Inc began to secure payments from Esteva and Teal.
ISSUE:
Whether the foreclosure of the mortgage by Teal Motor Co., Inc is lawful?
HELD:
YES RATIO: In the law of chattel mortgages, the debt is the principal thing, while the mortgage is but an
incident to the debt. Thus, when it is separated from the principal, as in this case where the notes were
endorsed without the mortgage, it has no determinate value. Therefore, the separation of the notes
from the mortgage and both the foreclosure of the mortgage and a suit of the notes can’t be
countenanced.
Gabriel Angel V. de Vera LL and Company Development vs. Huang Chao Chun
G.R. No. 142378 March 7, 2000
Facts:
 The case originated from an unlawful detainer case filed by petitioner before the trial court alleging
that respondents Huang Chao Chun and Yang Tung Fa violated their amended lease contract over a
1,112 square meter lot it owns, when they did not pay the monthly rentals thereon in the total amount
of P4,322,900.00.  It also alleged that the amended lease contract already expired on September 16,
1996 but respondents refused to surrender possession thereof plus the improvements made thereon,
and pay the rental arrearages despite repeated demands.  The parties entered into the amended lease
contract sometime in August 1991. The same amended the lease contract previously entered into by the
parties on August 8, 1991.  Respondent were joined by the Tsai Chun International Resources Inc. in
their answer to the Complaint, wherein they alleged that the actual lessee is the corporation.
Respondents and the corporation denied petitioner’s allegations.  The MTC dismissed the case. The
MTC ruled that the lessees could extend the contract entered into by the parties unilaterally for another
five years for reasons of justice and equity.  It also ruled that the corporation’s failure to pay the
monthly rentals as they fell due was justified by the fact that petitioner refused to honor the basis of the
rental increase as stated in their Lease Agreement.  This was affirmed by the RTC. It also held that the
parties had a reciprocal obligation: unless and until petitioner presented “the increased realty tax,”
private respondents were not under any obligation to pay the increased monthly rental. The decision
was likewise affirmed by the Court of Appeals.
Issue: Whether the court could still extend the term of the lease, after its expiration.
Held: No. Ratio: In general, the power of the courts to fix a longer term for a lease is discretionary. Such
power is to be exercised only in accordance with the particular circumstances of a case: a longer term to
be granted where equities demanding extension come into play; to be denied where none appear --
always with due deference to the parties’ freedom to contract. Thus, courts are not bound to extend the
lease. Furthermore, the extension of a lease contract must be made before the term of the agreement
expires, not after. Upon the lapse of the stipulated period, courts cannot belatedly extend or make a
new lease for the parties, even on the basis of equity. Because the Lease Contract ended on September
15, 1996, without the parties reaching any agreement for renewal, respondents can be ejected from the
premises. The foregoing doctrine was recently reiterated in Heirs of Amando Dalisay v. Court of Appeals.
Thus, pursuant to Fernandez, Dalisay and Article 1196 of the Civil Code, the period of the lease contract
is deemed to have been set for the benefit of both parties. Its renewal may be authorized only upon
their mutual agreement or at their joint will. Its continuance, effectivity or fulfillment cannot be made to
depend exclusively upon the free and uncontrolled choice of just one party.
Catungal v. Rodriguez G.R. No. 146839, March 23, 2011 Leonardo-De Castro, J.:
FACTS: Agapita Catungal owned a parcel of land with an area of 65, 246 square meters in Talamban,
Cebu City. She entered into a Contract to Sell with Angel Rodriguez. Subsequently, the Contract to Sell
was upgraded into a Conditional Deed of Sale between the same parties. Rodriguez secured the
necessary survey and plans that reclassified the land from agricultural to residential and actively
negotiated for the road right of way. The spouses Catungal requested an advance of P5,000,000.00 on
the purchase price. Rodriguez objected on the unwarranted demands in view of the terms of the
Conditional Deed of Sale that allowed him sufficient time to negotiate a road right of way and exclusive
right to rescind the contract. Thereafter, he received a letter from Atty. Catungal that the contract is
cancelled and terminated. Catungal filed a complaint contending that the Catungal’s unilateral rescission
of the Conditional Deed of Sale was unjustified, arbitrary and unwarranted. However, the Catungals
claims that Rodriguez does not have an exclusive right to rescind the contract it being recorocal. The
trial court ruled in favor of Rodriguez. The Catungals appealed the decision to the Court of Appeals. In a
Motion for Reconsideration, Atty. Borromeo, a new counsel for the Catungals, argued for the first time
that the paragraphs 1(b) and 5(49) of the Conditional Deed of Sale violated the principle of mutuality
under Article 1308 of the Civil Code.
ISSUE 1. Whether petitioners allowed to raise their theory of nullity of the Conditional Deed of Sale for
the first time on appeal? 2. Whether paragraphs 1(b) and 5 of the Conditional Deed of Sale violate the
principle of mutuality of contracts under Article 1308?
HELD 1. No. The Court held that a situation where a party completely changes his theory of the case on
appeal and abandons his previous assignment of errors in his brief, which plainly should not be allowed
as anathema to due process. During the proceedings before the trial court, the spouses Catungal never
claimed that the provisions in the Conditional Deed of Sale, stipulating that the payment of the balance
of the purchase price was contingent upon the successful negotiation of a road right of way and granting
Rodriguez the option to rescind, were void for allegedly making the fulfillment of the contract
dependent solely on the will of Rodriguez. 2. No. The Court held that in the Conditional Deed of Sale the
respondent shall pay the balance of the purchase price when he has successfully negotiated and secured
a road right of way, is not purely potestative as what the petitioners contend. It is not dependent on the
sole will of the debtor but also on the will of third persons who own the adjacent land and from whom
the road right of way shall be negotiated. This mixed condition is expressly allowed under Article 1182 of
the Civil Code. In other words, the obligation to pay the balance is conditioned upon the acquisition of
the road right-of-way, in accordance with paragraph 2 of Article 1181 of the New Civil Code. In the event
that the condition is not fulfilled, Rodriguez can either proceed with the sale and demand return of his
downpayment or to waive the condition and still pay the purchase price despite the lack of road access
Case No. 27 MALAYAN INSURANCE vs. COURT OF APPEALS, 165 SCRA 536, GR L-36413, September 26,
1988 Syllabi Class : Insurance|Civil Law|Third-Party Liability|Solidary Obligation| Subrogation
FACTS: Malayan Insurance issued in favor of Sio Choy, a Private Car Comprehensive Policy effective from
April 18, 1967 to April 18, 1968 covering a Willys jeep. The insurance coverage for third-party liability
was amounting to P20,000. During the effectivity of the said policy, the insured jeep while being driven
by one Juan Campollo, an employee of San Leon Rice Mill, collided with a passenger bus owned by
Pangasinan Transportation Co. (Pantranco) causing damage to the insured vehicle and injuries to the
driver and Martin Vallejos who was riding in an ill-fated jeep. Vallejos sued for damages against Sio
Choy, Malayan Insurance and Pantranco. However the trial court only ordered Sio Choy, Malayan and
San Leon to pay Vallejos a total of P29,103 (jointly and severally liable) but Malayan will be liable only up
to P20,000, the consideration in the policy. CA affirmed the judgment of the trial court that Sio Choy, the
San Leon Rice Mill, Inc. and the Malayan Insurance Co., Inc. are jointly and severally liable for the
damages awarded to the plaintiff Martin C. Vallejos. It ruled, however, that the San Leon Rice Mill, Inc.
has no obligation to indemnify or reimburse the petitioner insurance company for whatever amount it
has been ordered to pay on its policy, since the San Leon Rice Mill, Inc. is not a privy to the contract of
insurance between Sio Choy and the insurance company.
ISSUE: Whether or not Malayan Insurance is solidarily liable with Sio Choy and San Leon Rice Mill to
Vallejos.
HELD: NO. It is only respondents Sio Choy and San Leon Rice Mill, Inc, that are solidarily liable to
respondent Vallejos for the damages awarded to Vallejos. It must be observed that respondent Sio Choy
is made liable to said plaintiff as owner of the illfated Willys jeep, pursuant to Article 2184 of the Civil
Code. It thus appears that respondents Sio Choy and San Leon Rice Mill, Inc. are the principal tortfeasors
who are primarily liable to respondent Vallejos. The law states that the responsibility of two or more
persons who are liable for a quasi-delict is solidarily. On the other hand, the basis of petitioner's liability
is its insurance contract with respondent Sio Choy. If petitioner is adjudged to pay respondent Vallejos in
the amount of not more than P20,000.00, this is on account of its being the insurer of respondent Sio
Choy under the third party liability clause included in the private car comprehensive policy existing
between petitioner and respondent Sio Choy at the time of the complained vehicular accident. In
solidary obligation, the creditor may enforce the entire obligation against one of the solidary debtors.
On the other hand, insurance is defined as "a contract whereby one undertakes for a consideration to
indemnify another against loss, damage, or liability arising from an unknown or contingent event."
POLYMER RUBBER CORPORATION and JOSEPH ANG, Petitioners -versus- BAYOLO SALAMUDING,
Respondent G.R. No. 185160, FIRST DIVISION, July 24, 2013, REYES, J.
FACTS: Bayolo Salamuding (Salamuding), Mariano Gulanan and Rodolfo Raif (referred to as the
complainants) were employees of petitioner Polymer Rubber Corporation (Polymer), who were
dismissed after allegedly committing certain irregularities against Polymer. The three employees filed a
complaint against Polymer and Ang (petitioners) for unfair labor practice and illegal 213 | P a g e
dismissal with prayer for reinstatement and payment of back wages, attorney’s fees, moral and
exemplary damages. The Labor Arbiter (LA) rendered a decision, dismissing the complaint for unfair
labor practice but directing the respondent to reinstate complainants and pay them labor standard
benefits. As a consequence of such decision, a writ of execution was issued. The petitioners appealed to
the NLRC but the latter affirmed the LA's decision with modification. The case was subsequently
elevated to the Supreme Court (SC) on a petition for certiorari which affirmed the NLRC. On September
30, 1993, Polymer ceased its operations. However, upon a motion the LA issued a writ of execution
based on the SC resolution. Since the writ of execution was returned unsatisfied, another DEAN’S CIRCLE
2019 – UST FACULTY OF CIVIL LAW 535 alias writ of execution was issued. Since the alias writ was also
not implemented, the LA issued a 5th Alias Writ of Execution and in the implementation of this alias writ
of execution the shares of stocks of Ang at USA Resources Corporation were levied. The petitioners
moved to quash the 5th alias writ of execution, and to lift the notice of garnishment alleging that Ang
should not be held jointly and severally liable with Polymer since it was only the latter which was held
liable in the decision of the LA, NLRC and the Supreme Court. The LA granted the motion but the NLRC
and CA reversed.
ISSUE: W/N Ang as an officer of the corporation (Polymers) can be held personally liable to pay the
liability of the corporation
RULING: The petition is meritorious. A corporation, as a juridical entity, may act only through its
directors, officers and employees. Obligations incurred as a result of the directors’ and officers’ acts as
corporate agents, are not their personal liability but the direct responsibility of the corporation they
represent. As a rule, they are only solidarily liable with the corporation for the illegal termination of
services of employees if they acted with malice or bad faith. To hold a director or officer personally
liable for corporate obligations, two requisites must concur: (1) it must be alleged in the complaint that
the director or officer assented to patently unlawful acts of the corporation or that the officer was guilty
of gross negligence or bad faith; and (2) there must be proof that the officer acted in bad faith. In the
instant case, the CA imputed bad faith on the part of the petitioners when Polymer ceased its operations
the day after the promulgation of the SC resolution in 1993 which was allegedly meant to evade liability.
The CA found it necessary to pierce the corporate fiction and pointed at Ang as the responsible person
to pay for Salamuding’s money claims. Except for this assertion, there is nothing in the records that
show that Ang was responsible for the acts complained of. At any rate, the Court finds that it will require
a great stretch of imagination to conclude that a corporation would cease its operations if only to evade
the payment of the adjudged monetary awards in favor of three (3) of its employees. Further, the
dispositive portion of the LA Decision dated November 21, 1990 which Salamuding attempts to enforce
does not mention that Ang is jointly and severally liable with Ang is merely one of the incorporators of
Polymer and to single him out and require him to personally answer for the liabilities of Polymer is
without basis. In the absence of a finding that he acted with malice or bad faith, it was error for the CA
to hold him responsible. To hold Ang personally liable at this stage is quite unfair. The judgment of the
LA, as affirmed by the NLRC and later by the SC had already long become final and executory. It has been
held that a final and executory judgment can no longer be altered. The judgment may no longer be
modified in any respect, even if the modification is meant to correct what is perceived to be an
erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be
made by the court rendering it or by the highest Court of the land. Since the alias writ of execution did
not conform, is different from and thus went beyond or varied the tenor of the judgment which gave it
life, it is a nullity. To maintain otherwise would be to ignore the constitutional provision against
depriving a person of his property without due process of law