BACHRACH CORPORATION, vs.
CA The respondent filed a petition for
FACTS:
The petitioner and the Republic
entered into a lease agreement for a term of
ninety-nine years covering 2 specified area,
Block 180 and Block 185, located at the
Manila Port Area. It was then under the
control and management of the Director of
Lands. When the control and management of
the Port Area was transferred to the
respondents, through Executive Order No.
321, the rental rates of the petitioner was
increased by 1,500%. However, the
petitioner refused to pay.
The respondent initiated unlawful
detainer proceeding against the petitioner.
The lower court rendered the decision
ordering the eviction of the petitioner and
was affirmed in toto when appealed to the
Regional Trial Court. The case was elevated
to the Court of Appeals by way of a petition
for review, however the court affirmed the
decision of the RTC. A motion for
reconsideration was filed, still it was put on
hold due to the pending submission of a
compromise agreement. The parties failed to
submit the compromise agreement, thus the
denial of the motion for reconsideration.
Hence, the decision of the appellate court
became final and executory.
Meanwhile, while the motion for
reconsideration is pending, the petitioner
filed a complaint against the respondent for
refusing to honor a compromise agreement
perfected between the parties during their
conference that superseded the ejectment
case. Thus, the prayer for specific
performance.
The respondent filed a motion for a
writ of execution in the ejectment case. The
petitioner filed an application for the issuance
of a temporary restraining order and a writ of
preliminary injunction to enjoin the issuance
of the writ of execution. The respondent
countered by filing a motion for preliminary
hearing on its affirmative defenses along with
a motion to dismiss. However, the trial court
issued an order granting the application of the
petitioner.
certiorari and prohibition before the Court of
Appeals, however it was dismissed. The
court ruled that it was insufficient if form and
substance for it fail to attach a certified to
copy of each of the assailed order of the trial
court. Undaunted, the respondent filed a new
petition alleging that since it had only
received a copy of the assailed resolution of
the trial court, the refiling if the petition with
the Court of Appeals within a period of less
than two months from the date of such receipt
was well within the reasonable time
requirement under the Rules for a special
civil action for certiorari. In the meantime,
the resolution which dismissed the petition
for certiorari and prohibition filed by the
respondent became final.
In the newly filed petition, the
respondent invoked that the respondent Judge
acted without, or in excess of jurisdiction, or
with abuse of discretion in refusing to take
cognizance, abide and acknowledge the final
judgement of the Court of Appeals which is
enough justification for the dismissal of the
case grounded on res judicata. The Court of
Appeals rendered the decision nullifying and
setting aside the orders of the RTC and
ordering the dismissal of the complaint of the
petitioner.
ISSUE:
Whether or not the specific
performance case should be held barred by
the unlawful detainer case on the ground of
res judicata.
HELD:
NO. There are four (4) essential
conditions which must concur in order
that res judicata may effectively apply, viz:
(1) The judgment sought to bar the new
action must be final; (2) the decision must
have been rendered by a court having
jurisdiction over the subject matter and the
parties; (3) the disposition of the case must be
a judgment or order on the merits; and (4)
there must be between the first and second
action identity of parties, identity of subject
matter, and identity of causes of action. In the
case at bar, There is no question about the fact
that all the first three elements of res
judicata are here extant; it is the final
condition requiring an identity of parties, of
subject matter and of causes of action,
particularly the last two, i.e., subject matter
and cause of action, that presents a problem.

According to the Supreme Court, the

ultimate test in ascertaining the identity of
causes of action is said to be to look into
whether or not the same evidence fully
supports and establishes both the present
cause of action and the former cause of
action. In the affirmative, the former
judgment would be a bar; if otherwise, then
that prior judgment would not serve as such a
bar to the second. The evidence needed to
establish the cause of action in the unlawful
detainer case would be the lease contract and
the violation of that lease by Bachrach. In the
specific performance case, what would be
consequential is evidence of the alleged
compromise agreement and its breach by
PPA.

Furthermore, on the issue of issuance

of writ of preliminary injunction as an
improper interference with the judgment in
the unlawful detainer suit. The Supreme
Court ruled that after a judgment has gained
finality, it becomes the ministerial duty of the
court to order its execution. No court,
necessarily, should interfere by injunction or
otherwise to restrain such execution. The
rule, however, concededly admits of
exceptions; hence, when facts and
circumstances later transpire that would
render execution inequitable or unjust, the
interested party may ask a competent court to
stay its execution or prevent its
enforcement. So, also, a change in the
situation of the parties can warrant an
injunctive relief. Evidently, in issuing its
orders assailed by PPA in the latters petition
for certiorari and prohibition before the
Court of Appeals, the trial court in the case at
bar would want to preserve status
quo pending its disposition of the specific
performance case and to prevent the case
from being mooted by an early
implementation of the ejectment writ. In
holding differently and ascribing to the trial
court grave abuse of discretion amounting to
lack or excess of jurisdiction, the appellate
court, in our considered view, has committed
reversible error.
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 defendants daughter-in-
law, who was about to gie birth. After the
consultation of Dr. Escao, 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.
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.

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
1. DE LA CRUZ V NORTHERN THEATRIAL principal and agent because the principle of
ENTERPRISES representation as a characteristic of agency was
in no way involved.

Plaintiff was not employed to represent

FACTS:
corporation in its dealings with 3rd parties
*The Northern Theatrical Enterprises, a
Plaintiff is a mere employee hired to
domestic corporation opearated a movie house
perform a certain specific duty or task, that of
in Laoag, Ilocos Norte and among the persons
acting as a special guard and staying at the main
employed by it was plaintiff De La Cruz, hired as
entrance of the movie house to stop gate
special guard whose duties were to guard the
crashers and to maintain peace and order within
main entrance of the cine, to maintain peace and
the premises.
order and to report the commission of disorder
within the premises

*As such guard, he carried a revolver
* One Benjamin Martin wanted to crash
the gate or entrance of the movie house.
Infuriated by the refusal of plaintiff to let him in
without first providing himself with a ticket,
Martin attacked him with a bolo
*Plaintiff defended himself until he was
cornered, at which moment to save himself, he
shot gate crasher resulting in latters death
*Plaintiff was charged with homicide but
was acquitted of charge after trial. In both
criminal cases against him, he employed a lawyer
to defend him
*He then demanded from NLE
reimbursement of expenses but was refused
thus filed present action against the company
and t3 members of its Board of Directors to
recover not only the amounts he had paid his
lawyers but also moral damages said to have
been suffered due to his worry, neglect of his
interests and his family as well in the supervision
of the cultivation of his land, a total of P 15,000.
*CFI rejected plaintiffs theory that he
was an agent of the company and that he had no
cause of action and dismissed the complaint
Sub issue: W/N an employee or servant who in
line of duty and while in the performance of the
task assigned to him, performs an act which
eventually results in his incurring in expenses
caused not directly by his master or employer or
by reason of his performance of his duty, but
rather by a 3rd party or stranger not in the
employ of his employer may recover said
damages against his employer
Ruling: No
Although the employer has a moral obligation to
give employee legal assistance to aid the latter in
his case, he has no legal obligation to do so.
If the employer is not legally obliged to give legal
assistance to employee and provide him with a
lawyer, naturally said employee may not recover
the amount he may have paid a lawyer hired by
him.
Damages suffered by plaintiff by reason
of expenses incurred by him in remunerating his
lawyer is not caused by his act of shooting to
death the gate crasher but rather by filing the
charge of homicide which made it necessary for
him to defend himself with the aid of counsel.

Had no criminal charge against him,

there would have been no expenses incurred or
ISSUE: W/N Plaintiff De la Cruz is considered as
damages suffered.
an agent of the corporation and as such entitled
to reimbursement for expenses incurred in
conncection with agency

RULING: No, Plaintiff is mere employee

The relationship between the movie

corporation and plaintiff was not that of
Manzano vs Lazaro effective ratification on
voidable contracts.
Vitiated consent does not make the contract
unenforceable but merely voidable; remedy is to file
a case to annul the contract; voidable and annullable
contracts have produces legal effect until annulled by
a proper court(art.1390);voidable contracts
susceptible of ratification.
Facts:
MAnzano and petitioner entered a professional
services contract. Outline in the contract is their
corresponding duties which includes the award
of bonuses in the event that the petitioner
would win the elections. Indeed, petitioner won
the vice mayoralty. Thus, respondent sent a
letter to petitioner demanding payment of
services and the bonus. Petitioner replied that
there must be first an inventory which accdg to
petitioners knowledge, is to be prepared by the
respondent. Respondent denied it and argued
that preparing liquidation papers was not one
of the duties outlined for him. Due to non-
payment of the petitioner, respondent filed a
case for collection of sum of money. Petitioner
alleges that there was misrepresentation on the
part of respondent and his consent to the
contract was vitiated by fraud. Thus there was
no perfected contract at all. The RTC rendered
judgment in favor of respondent and affirmed
by CA.
Issue: WON consent vitiated by fraud annuls
the contract.
Ruling: No. Vitiated consent does not itself
makes the contract unenforceable but merely
voidable and annullable and it produces legal
effect until annulled by a proper court and
voidable contracts are susceptible of
ratification. In this case, the acts of petitioner is
consistent with ratification amounting to an
effective ratification.
William Golangco Construction Corp. (WGCC)
vs Phil Commercial Intl Bank (PCIB)
Facts:
William Golangco Construction Corporation
(WGCC) and the Philippine Commercial
International Bank (PCIB) entered into a
contract for the construction of the extension of
PCIB Tower II on October 20, 1989. The project
included, among others, the application of a
granitite wash-out finish on the exterior walls of
the building.
PCIB, with the concurrence of its consultant
TCGI Engineers (TCGI), accepted the turnover of
the completed work by WGCC in a letter dated
June 1, 1992. To answer for any defect arising
within a period of one year, WGCC submitted a
guarantee bond dated July 1, 1992 issued by
Malayan Insurance Company, Inc. in compliance
with the construction contract.
The controversy arose when portions of the
granitite wash-out finish of the exterior of the
building began peeling off and falling from the
walls in 1993. WGCC made minor repairs after
PCIB requested it to rectify the construction
defects.
In 1994, PCIB entered into another contract
with Brains and Brawn Construction and
Development Corporation to re-do the entire
granitite wash-out finish after WGCC
manifested that it was "not in a position to do
the new finishing work," though it was willing to
share part of the cost. PCIB incurred expenses
amounting to P11,665,000 for the repair work.
PCIB filed a request for arbitration with the
Construction Industry Arbitration Commission
(CIAC) for the reimbursement of its expenses
for the repairs made by another contractor. It
complained of WGCCs alleged non-compliance
with their contractual terms on materials and
workmanship. WGCC interposed a counterclaim
for P5,777,157.84 for material cost adjustment.
The CIAC declared WGCC liable for the
construction defects in the project. WGCC filed
a petition for review with the Court of Appeals
(CA) which dismissed it for lack of merit.
However, its motion for reconsideration was
similarly denied.
There is a question of certiorari in this case.
Issue:
Whether or not petitioner WGCC is liable for
defects in the granite wash-out finish that
occurred after the lapse of one-year defects
liability period provided in Art. XI of the
construction contract?
Held:
The court ruled in favor of WGCC. The
controversy pivots on a provision in the
construction contract referred to as the defects
liability period:
Guarantee
In Article XI on Guarantee - the CONTRACTOR
hereby guarantees the work stipulated in this
Contract, and shall make good any defect in
materials and workmanship which [becomes]
evident within one (1) year after the final
acceptance of the work. The CONTRACTOR shall
leave the work in perfect order upon
completion and present the final certificate to
the ENGINEER promptly.
If in the opinion of the OWNER and ENGINEER,
the CONTRACTOR has failed to act promptly in
rectifying any defect in the work which appears
within the period mentioned above, the
OWNER and the ENGINEER may, at their own
discretion, using the Guarantee Bond amount
for corrections, have the work done by another
contractor at the expense of the CONTRACTOR
or his bondsmen.
However, nothing in this section shall in any
way affect or relieve the CONTRACTORS
responsibility to the OWNER.
Although both parties based their arguments on
the same stipulations, they reached conflicting
conclusions. A careful reading of the
stipulations, however, leads us to the
conclusion that WGCCs arguments are more
tenable.
Autonomy of Contracts
The autonomous nature of contracts is
enunciated in Article 1306 of the Civil Code.
Article 1306. The contracting parties may
establish such stipulations, clauses, terms and
conditions as they may deem convenient,
provided they are not contrary to law, morals,
good customs, public order, or public policy.
Obligations arising from contracts have the
force of law between the parties and should be
complied with in good faith.
The adoption of a one-year guarantee, as done
by WGCC and PCIB, is established usage in the
Philippines for private and government
construction contracts. However, the contract
did not specify a different period for defects in
the granitite wash-out finish; hence, any defect
therein should have been brought to WGCCs
attention within the one-year defects liability
period in the contract.
The inclusion in a written contract for a piece of
work, such as the one in question, of a provision
defining a warranty period against defects, is
not uncommon. This kind of a stipulation is of
particular importance to the contractor, for as a
general rule, after the lapse of the period
agreed upon therein, he may no longer be held
accountable for whatever defects, deficiencies
or imperfections that may be discovered in the
work executed by him.
Unfulfilled Obligations
PCIB calls our attention to Article 62.2 which
provides: Notwithstanding the issue of the
Defects Liability Certificate[,] the Contractor
and the Owner shall remain liable for the
fulfillment of any obligation[,] incurred under
the provisions of the Contract prior to the issue
of the Defects Liability Certificate[,] which
remains unperformed at the time such Defects
Liability Certificate is issued[. And] for the
purpose of determining the nature and extent
of any such obligation, the Contract shall be
deemed to remain in force between the parties
of the Contract. (emphasis ours).
Ruling
The lower courts conjectured that the peeling
off of the granitite wash-out finish was probably
due to "defective materials and workmanship."
This they characterized as hidden or latent
defects. WGCC does not agree with the
conclusion that the alleged defects were
hidden.

First, PCIBs team of experts (who were

specifically employed to detect such defects
early on) supervised WGCCs workmanship.
Second, WGCC regularly submitted progress
reports and photographs. Third, WGCC worked
under fair and transparent circumstances. PCIB
had access to the site and it exercised
reasonable supervision over WGCCs work.
Fourth, PCIB issued several "punch lists" for
WGCCs compliance before the issuance of
PCIBs final certificate of acceptance. Fifth, PCIB
supplied the materials for the granitite wash-
out finish. And finally, PCIBs team of experts
gave their concurrence to the turnover of the
project.

The purpose of the defects liability period was

precisely to give PCIB additional, albeit limited,
opportunity to oblige WGCC to make good any
defect, hidden or otherwise, discovered within
one year.

Contrary to the CAs conclusion, the first

sentence of the third paragraph of Article XI on
guarantee previously quoted did not operate as
a blanket exception to the one-year guarantee
period under the first paragraph. Neither did it
modify, extend, nullify or supersede the
categorical terms of the defects liability period.

Under the circumstances, there were no hidden

defects for which WGCC could be held liable.
Neither was there any other defect for which
PCIB made any express reservation of its rights
against WGCC. Indeed, the contract should not
be interpreted to favor the one who caused the
confusion, if any. The contract was prepared by
TCGI for PCIB.

WHEREFORE, the petition is hereby GRANTED.

The decision of the Court of Appeals in CA-G.R.
SP No. 41152 is ANNULED and SET ASIDE.
Dio vs Ferdinand Memorial Park, Inc. may be adopted by respondent
509 SCRA 453 (2006) SFMPI. Thus, when petitioner executed
the Pre-Need Purchase Agreement and
conformed to the Deed of Sale, it was with
full knowledge of the terms and conditions
Facts: thereof, including the rules and regulations
On December 11, 1973, Teresita Dio issued by respondent SFMPI. Hence,
agreed to buy, on installment basis, a petitioner is precluded from asserting that
memorial lot from the St. Ferdinand she had no knowledge of said rules and
Memorial Park, Inc. (SFMPI) regulations, and that she never consented
in Lucena City. The purchase was to comply with them. More importantly,
evidenced by a Pre-Need Purchase petitioner cannot feign ignorance of said
Agreement. rules.

SFMPI issued a Deed of Sale and Petitioner is obliged to abide by the terms
Certificate of Perpetual Care. The and conditions of the Pre-Need Purchase
ownership of Dio over the property was Agreement and the Deed of Sale, as well
made subject to the rules and regulations as said rules and regulations which formed
of SFMPI, as well as the government, integral parts of said deeds.
including all amendments, additions and
modifications that may later be adopted.
Dio decided to build a mausoleum on the
lot. She caused the preparation of a
design-plan for the construction of a
mausoleum and the bidding out of the
project.

Dio informed SFMPI, through its president

and controlling stockholder, that she was
planning to build a mausoleum on her lot
and sought the approval thereof. Dio even
showed the plans and project
specifications accomplished by her private
contractor. The plans and specifications
were approved, but was insisted that the
mausoleum be built by it or its agents at a
minimum cost of P100,000.00 as provided
in Rule 69 of the Rules and Regulations the
SFMPI.

On October 17, 1986, SFMPI wrote Dio

informing her that under Rule 69 of SFMPI
Rules and Regulations, she was prohibited
from engaging an outside contractor for the
construction of buildings, improvements
and memorials.

Issue:
Whether or not Rule 69 is valid and binding
upon petitioner.

Held:
Under the Deed of Sale and Certificate of
Perpetual Care, petitioner agreed to be
bound not only by the existing rules but
also by future rules and regulations that