RYUICHI YAMAMOTO v. NISHINO LEATHER INDUSTRIES, INC.

and IKUO
NISHINO 551 SCRA 447 (2008)
To disregard the separate juridical personality of a corporation, the wrongdoing or unjust act
in contravention of a plaintiffs legal rights must be clearly and convincingly established. Also,
without
acceptance,
a
mere
offer
produces
no
obligation.
Ryuichi Yamamoto and Ikuo Nishino agreed to enter into a joint venture wherein Nishino would
acquire such number of shares of stock equivalent to 70% of the authorized capital stock of the
corporation. However, Nishino and his brother Yoshinobu Nishino acquired more than 70% of the
authorized capital stock. Negotiations subsequently ensued in light of a planned takeover by
Nishino who would buy-out the shares of stock of Yamamoto who was advised through a letter
that he may take all the equipment/ machinery he had contributed to the company (for his own
use and sale) provided that the value of such machines is deducted from the capital contributions
which will be paid to him. However, the letter requested that he give his comments on all the
above, soonest. On the basis of the said letter, Yamamoto attempted to recover the machineries
but Nishino hindered him to do so, drawing him to file a Writ of Replevin. The Trial Court issued
the writ. However, on appeal, Nishino claimed that the properties being recovered were owned by
the corporation and the above-said letter was a mere proposal which was not yet authorized by
the Board of Directors. Thus, the Court of Appeals reversed the trial courts decision despite
Yamamotos contention that the company is merely an instrumentality of the Nishinos.
ISSUE:
Whether or not Yamamoto can recover the properties he contributed to the company in view of
the Doctrine of Piercing the Veil of Corporate Fiction and Doctrine of Promissory Estoppel.
HELD:
One of the elements determinative of the applicability of the doctrine of piercing the veil
of corporate fiction is that control must have been used by the defendant to commit fraud or
wrong, to perpetuate the violation of a statutory or other positive legal duty, or dishonest and
unjust act in contravention of the plaintiffs legal rights. To disregard the separate juridical
personality of a corporation, the wrongdoing or unjust act in contravention of a plaintiffs legal
rights must be clearly and convincingly established; it cannot be presumed. Without a
demonstration that any of the evils sought to be prevented by the doctrine is present, it does not
apply. Estoppel may arise from the making of a promise. However, it bears noting that the letter
was followed by a request for Yamamoto to give his comments on all the above, soonest. What
was thus proffered to Yamamoto was not a promise, but a mere offer, subject to his acceptance.
Without acceptance, a mere offer produces no obligation. Thus, the machineries and equipment,
which comprised Yamamotos investment, remained part of the capital property of the
corporation.

Catungal v. Rodriguez [646 SCRA 130, 2011]

Obligations and Contracts Doctrine: In conditional sales, the acquisition of rights as well as
extinguishment or loss of those already acquired shall depend upon the happening of the event,
which constitutes the condition. An obligation dependent upon a suspensive condition cannot be
demanded until after the condition takes place because it is only after the fulfillment of the

condition that the obligation arises. When the condition is imposed merely on the performance of
an obligation and not on the perfection of the contract, it gives the other party the option to either
refuse to proceed with the sale or to waive the condition. Facts: The petitioners and respondent
entered into a Conditional Deed of Sale wherein spouses Catungal agreed to sell and Rodriguez
agreed to buy the lot conditioned on the payment of a certain price but the obligation to pay the
balance of the purchase price would only arise if Rodriguez would successfully negotiate and
secure a road right of way. Petitioners requested for an advance of 5M on the purchase price but
Rodriguez objected stating that in view of the terms of the Conditional Deed he would only pay
balance of the purchase price if he would obtain the a road right of way and he was given
sufficient time to do so and he was given the right to rescind the contract. But spouses Catungal
rescinded the contract. Rodriguez contends that the spouses unilateral rescission was
unjustified while the spouses Catungal contends that the terms of the Conditional Deed of Sale
violated the principle of mutuality under Art. 1308 of the Civil Code stating the contract was a
potestative condition because it was dependent on the sole will of the debtor (Rodriguez).
ISSUE: WON the stipulations of their Conditional Deed of Sale constitute a potestative
condition? NO.
HELD: The stipulation wherein Rodriguez shall pay the balance of the the purchase price when
he has successfully negotiated and secured a road right of way is not a condition on the perfection
of the contract nor on the validity of the entire contract or its compliance as contemplated in Art
1308. It is a condition imposed only on respondent s obligation to pay the remainder of the
purchase price. Applying Art. 1182, such a condition is not purely potestative as petitioners
contend. It is not dependent on the sole will of the debtor but also on the will of the third persons
who own the adjacent land and from whom the road right of way shall be negotiated. Such a
condition is likewise dependent on chance as there is no guarantee that respondent and the 3rd
party landowners would come to an agreement rearding the road right of way. This type of mixed
condition is expressly allowed under Art 1182. Art 1182: When the fulfillment of the condition
depends upon the sole will of the debtor, the conditional obligation shall be void. If it depends
upon chance or upon the will of a third person, the obligation shall take effect in conformity with
the provisions of this code. In other words, the obligation to pay the balance is conditioned upon
the acquisition of the road right of way. Therefor, spouses Catungal cannot rescind the contract
nor demand the fulfillment of Rodriguez obligation to pay the balance. In the event the
condition is not fulfilled, Rodriguez can either proceed with the sale and demand return of his
down payment or to waive the condition and still pay the purchase price despite the lack of road
access.

CASE 2016-0069: SERGIO R. OSMENA Ill VS POWER SECTOR ASSETS AND

LIABILITIES MANAGEMENT CORPORATION, EMMANUEL R. LEDESMA, JR., SPC
POWER CORPORATION, and THERMA POWER VISAYAS, INC. (G.R. No. 212686, 05 OCT
2016, VELASCO JR., J.) (SUBJECT/S: SC MODIFIES FINAL JUDGMENT;EFFECT OF
SEVERABILITY CLAUSE IN BIDDING GUIDELINES) (BRIEF TITLE: OSMENA VS.
PSALM ET AL.)
DISPOSITIVE:
WHEREFQRE, premises considered, the Manifestation/Motion dated March 16, 2016 of
respondent TPVI is hereby GRANTED. The Entry of Judgment is LIFTED. The fa/lo of the
September 28, 2015 Decision is hereby amended to include a directive that the April 30, 2014
Notice of Award in favor of said respondent be REINSTATED, excluding the portion therein

granting to SPC the Right to Top. Respondent PSALM is further directed to execute the NPPCAPA and NPPC-LLA in favor of respondent TPVI with dispatch. As amended, the fa/lo of said
Decision shall read:
WHEREFORE, the petition is hereby GIVEN DUE COURSE and the writ prayed for
accordingly GRANTED. The right of first refusal (right to top) granted to Sakon Power
Corporation (now SPC Power Corporation) under the 2009 Naga LBGT-LLA is hereby declared
NULL and VOID. Consequently, the Asset Purchase Agreement (NPPC-APA) and Land Lease
Agreement (NPPC-LLA) executed by the Power Sector Assets and Liabilities Management
Corporation and SPC are ANNULLED and SET ASIDE. The Notice of Award dated April 30,
2014 in favor of Therma Power Visayas, Inc. is hereby REINSTATED, excluding the portion
therein granting to SPC the Right to Top. Respondent PSALM is directed to execute the NPPCAP A and NPPCLLA in favor of TPVI with dispatch.
No costs.
SO ORDERED.
SUBJECTS/DOCTRINES/DIGEST:
WHAT HAPPENED IN THIS CASE?
THE POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORP (PSALM)
CONDUCTED BIDDING FOR THE SALE OF NPPC POWER PLANT. BIDDERS WERE
THERMA POWER VISAYAS INC AND SPC POWER CORP. THERMA POWER WON.
PSALM ISSUED NOTICE OF AWARD TO THERMA POWER BUT SUBJECT TO THE
CONDITION THAT SPC WILL NOT EXERCISE ITS RIGHT OF FIRST REFUSAL. THEN
SPC EXERCISED ITS RIGHT OF FIRST REFUSAL BY PROPOSING TO PSALM THAT IT
WILL EXECUTE LEASE AGREEMENT AND PURCHASE AGREEMENT OVER THE NPCC
POWER PLANT. PSALM AND SPC EXECUTED SAID AGREEMENTS AND PSALM
CANCELLED THE NOTICE OF AWARD. IN ITS PREVIOUS DECISION SC RULED THAT
THE PROVISION IN THE BIDDING GUIDELINES RE RIGHT OF FIRST REFUSAL OF SPC
WAS ILLEGAL AND THE LEASE AND PURCHASE AGREEMENTS WERE ALSO
ILLEGAL. BUT IT WAS SILENT ON THE EFFECT OF THE DECISION ON THE NOTICE
OF AWARD. THERMA POWER THEN ASKED FOR CLARIFICATION WITH PRAYER TO
REINSTATE THE NOTICE OF AWARD. SC IN THIS RESOLUTION REINSTATED THE
NOTICE OF AWARD.
WHAT WAS THE BASIS FOR THE REINSTATEMENT OF THE NOTICE OF AWARD?
THE BASIS IS THE SEVERABILITY CLAUSE IN THE BIDDING GUIDELINES WHICH
STATES: IF ANY ONE OR MORE OF THE PROVISIONS OF THE BIDDING PROCEDURES
OR ANY PART OF THE BIDDING PACKAGE IS HELD TO BE INVALID, ILLEGAL OR
UNENFORCEABLE, THE VALIDITY, LEGALITY, OR ENFORCEABILITY OF THE
REMAINING PROVISIONS WILL NOT BE AFFECTED THEREBY AND SHALL REMAIN
IN FULL FORCE AND EFFECT.
BUT WAS IT PROPER FOR SC TO AMEND A FINAL JUDGMENT?
YES.

THE COURT IS NOT PRECLUDED FROM RENDERING A NUNC PRO TUNC JUDGMENT
TO AMEND THE DISPOSITIVE PORTION OF THE SEPTEMBER 28, 2015 DECISION IN
ORDER TO TRULY REFLECT THE ACTION OF THE COURT.
THE LACK OF DIRECTIVE IN THE DECISION ON HOW TO PROCEED FROM THE
NULLIFICATION OF SPCS RIGHT TO TOP AND ITS NPPC-APA AND NPPC-LLA
CONTRACTS, NOTHING MORE, LEFT THE PARTIES AT A QUANDARY, PROMPTING
THEM TO SEEK JUDICIAL INTERVENTION ANEW.
THE COURT MUST, THEREFORE, SUPPLY HEREIN WHAT WAS INADVERTENTLY
OMITTED IN THE DECISION. OTHERWISE, A REJECTION OF THE PLEA OF THERMA
POWER WILL RESULT TO MULTIPLICITY OF SUITS AND CLOGGING OF THE COURT
DOCKET. THIS CONSEQUENCE IS AGAINST THE ESTABLISHED POLICY OF THE
COURT TO PROVIDE IN ITS RULES OF PROCEDURE A JUST, SPEEDY, AND
INEXPENSIVE DISPOSITION OF EVERY ACTION AND PROCEEDING.

De Leon vs Ong
GR No. 170405 February 2, 2010
Facts:
De Leon sold 3 parcels of land to Ong. The properties were mortgaged to Real Savings and Loan
Association. The parties executed a notarized deed of absolute sale with assumption of mortgage.
The deed of Assumption of mortgage shall be executed in favor of Ong after the payment of
415K. Ong complied with it. De Leon handed the keys of to Ong and informed the loan company
that the mortgage has been assumed by Ong. Ong made some improvements in the property. After
sometime, Ong learned that the properties were sold to Viloria and changed the locks to it. Ong
went to the mortgage company and learned that the mortgage was already paid and the titles were
given to Viloria. Ong filed a complaint for the nullity of second sale and damages. De Leon
contended that Ong does not have a cause of action against him because the sale was subject to a
condition which requires the approval of the loan company and that he and Ong only entered a
contract to sell.
Issue:
Whether or not the parties entered into a contract of sale
Ruling:
Yes, the parties entered into a contract of sale. In a contract of sale, the seller conveys ownership
of the property to the buyer upon the perfection of the contract. The non-payment of the price is
a negative resolutory condition. Contract to sell is subject to a positive suspensive condition. The
buyer does not acquire ownership of the property until he fully pays the purchase price. In the
present case, the deed executed by the parties did not show that the owner intends to reserve
ownership of the properties. The terms and conditions affected only the manner of payment and
not the immediate transfer of ownership. It was clear that the owner intended a sale because he
unqualifiedly delivered and transferred ownership of the properties to the respondent

Josefa versus San Buenaventura

2006 March 3, G.R. No. 163429
Facts:
San Buenventura is the owner of a piece of land. She entered into a contract of lease of Josefa
stipulating thereon that the lease will be for five years and is renewable upon the consent of the
parties. Josefa introduced improvements on the property his occupation of the same. After five
years, however, San Buenaventura demanded that Josefa vacate the premises or otherwise pay a
monthly rental of P30,ooo.oo. Josefa, however, continued to stay and paid only P15,000.00 which
was received by San Buenventura.
Issues:
1. Wether the lease contract between petitioner and respondent contained a "renewal clause" and
as such, they had agreed to extend the period of the lease for more than five years;
2. Whether petitioner is entitled to reimbursement for his improvement on the leased premises.
Held:
1. The clause "renewable upon agreement of the parties" in the lease contract is clear and admits
of no other interpretation: the contract is renewable only upon agreement of the parties. Since the
private respondents were not amenable to a renewal, they cannot be compelled to execute a new
contract when the old contract terminated. As such, petitioner has no other option but to vacate
the property.
2. In this case, there is no question that petitioner was initially a lawful possessor because his
entry into the property is by virtue of a lease contract with respondent. However as a mere lessee
whose possession after the expiration is at the sufferance of the owner of the property cannot
claim to be a builder in good faith. Under Art.1678 of he New Civil Code (NCC) petitioner is
entitled to one half of the value of the improvement only if respondent, as the owner, decides to
appropriate the improvement. Since respondent refused to appropriate the improvements
petitioner cannot compel her to reimburse to him one-half of the value. The Sole right of the
petitioner under Art. 1678 is to remove the improvement without causing anymore damage upon
the property leased than is necessary.

Secretary of Education vs. Heirs of Rufino Dulay (G.R. No. 164748, January 27, 2006, 480
SCRA 452)
FACTS:
On August 3, 1981, the spouses Rufino Dulay, Sr. and Ignacia Vicente Dulay executed a deed of
donation over a 10,000-square-meter portion of their property in favor of the Ministry of
Education
and
Culture.
The property was subdivided. On April 13, 1983, a Transfer Certificate of Title was issued in the

name of the Ministry of Education and Culture, represented by Laurencio C. Ramel, the
Superintendent of Schools of Isabela. However, the property was not used for school purposes
and
remained
idle.
Sometime in 1988, the DECS, through its Secretary, started construction of the Rizal National
High School building on a parcel of land it acquired from Alejandro Feliciano. The school site
was about 2 kilometers away from the land donated by the spouses Dulay.
In a letter to the DECS Secretary dated August 19, 1994, the spouses Dulay requested that the
property be returned to them considering that the land was never used since 1981, or a period of
more than 13 years. On August 28, 1994, the Barangay Council of Rizal, Santiago City issued
Resolution No. 397 recognizing the right of the donors to redeem the subject parcel of land
because of the DECS failure to utilize it for the intended purpose. It further resolved that the
Rizal National High School no longer needed the donated land "considering its distance from the
main campus and [the] failure to utilize the property for a long period of time."
On August 31, 1997, the heirs of Dulay, Sr., herein respondents, filed a complaint for the
revocation of the deed of donation and cancellation of the title, alleging that (1) there was a
condition in the deed of donation: that the DECS, as donee, utilize the subject property for school
purposes, that is, the construction of a building to house the Rizal National High School, (2) the
DECS did not fulfill the condition and that the land remained idle up to the present, and (3) the
donation inter vivos was inofficious, since the late Rufino Dulay, Sr. donated more than what he
could
give
by
will.
Petitioners, through the Office of the Solicitor General (OSG), interposed the following defenses:
(a) the DECS complied with said condition because the land was being used by the school as its
technology and home economics laboratory; (b) the donation was not inofficious for the donors
were the owners of five other parcels of land, all located at Rizal, Santiago City; (c) the DECS
acquired the disputed property by virtue of purchase made on December 8, 1997 by the barangay
of Rizal, Santiago City in the amount of P18,000.00 as certified by its former Barangay Captain,
Jesus San Juan;11 and (d) the action of the respondents had prescribed. The OSG also claimed
that students planted a portion of the land with rice, mahogany seedlings, and fruit-bearing trees;
the produce would then be sold and the proceeds used for the construction of a school building on
the
subject
property.
ISSUE:
(1) Whether or nor the DECS had complied with the condition imposed on the the deed of
donation.
(2) Whether the respondents' right to seek the revocation of the deed of donation is already barred
by
prescription
and
laches.
HELD:
The

contention

of

petitioners

has

no

merit.

As gleaned from the CA decision, petitioners failed to prove that the donated property was used
for
school
purposes
as
indicated
in
the
deed
of
donation:
We find it difficult to sustain that the defendant-appellants have complied with the condition of
donation. It is not amiss to state that other than the bare allegation of the defendant-appellants,
there is nothing in the records that could concretely prove that the condition of donation has been
complied with by the defendant-appellants. In the same breadth, the planting of palay on the land

donated can hardly be considered and could not have been the "school purposes" referred to and
intended by the donors when they had donated the land in question. Also, the posture of the
defendant-appellants that the land donated is being used as technology and home economics
laboratory of the Rizal National High School is far from being the truth considering that not only
is the said school located two kilometers away from the land donated but also there was not even
a single classroom built on the land donated that would reasonably indicate that, indeed, classes
have been conducted therein. These observations, together with the unrebutted ocular inspection
report made by the trial court which revealed that the land donated remains idle and without any
improvement thereon for more than a decade since the time of the donation, give Us no other
alternative but to conclude that the defendant-appellants have, indeed, failed to comply with what
is
incumbent
upon
them
in
the
deed
of
donation.
The right to seek the revocation of donation had not yet prescribed when respondents filed their
complaint
Anent the second issue, we reject the contention of the OSG that respondents cause of action is
already barred by prescription under Article 764 of the New Civil Code, or four years from the
non-compliance with the condition in the deed of donation. Since such failure to comply with the
condition of utilizing the property for school purposes became manifest sometime in 1988 when
the DECS utilized another property for the construction of the school building, the four-year
prescriptive period did not commence on such date. Petitioner was given more than enough time
to comply with the condition, and it cannot be allowed to use this fact to its advantage. It must be
stressed that the donation is onerous because the DECS, as donee, was burdened with the
obligation to utilize the land donated for school purposes. Under Article 733 of the New Civil
Code, a donation with an onerous cause is essentially a contract and is thus governed by the
rules on contract.