RCBC vs CA
G.R. No 133107, March 25, 1999
Facts: Petitioner and private respondent stipulated a contract of sale, where
payment of latter consisted of an initial lump sum and monthly installments, which
he already made in post-dated checks. They also executed a contract of chattel
mortgage (the car itself) stating that in the event of private respondent’s default,
he is bound to pay the entire remaining balance, along with the interests of the
balance. Unfortunately, one of the checks were left unsigned, thus money debited
from private respondent was returned in his account. Later thereafter, petitioner
declared him in default
Remedies: Regional Trial Court (won by PRIVATE RESPONDENT)
Court of Appeals (won by PRIVATE RESPONDENT)
Issue: Given of the facts, the questions posed is whether or not the unsigned check
causes respondent to be in default, and (underlying issue?) whether or not the
chattel mortgage should be enforced.
Rule: Art. 1159 of the Civil Code provides contractual obligations must be complied
with good faith. Also, Art. 1370 provides that if the terms of a contract are clear
and leave no doubt of intention of the contracting parties, the literal meaning shall
control.
Application: In this case, petitioner could have simply communicated such error to
private respondent and asked for the signature. Instead, the former chose to
inform him late that he “defaulted” from his payments, clearly an absence of good
faith (Art. 1159). Also, it is clearly indicated that the chattel mortgage should only
be enforced in the event that private respondent fails to pay for any of the
installments (Art. 1370). He however did not fail to pay, given of the existence of
sufficient funds, only the absence of required signature.
Conclusion: From the foregoing, it is likely the Court may declare him not in
default, and the mortgage will not be enforced.
Chaves vs Gonzales
G.R. No. L-27454, April 30, 1970
Facts: Petitioner commissioned respondent for the cleaning and repairing of his
typewriter. However, after repeated requests of the former for the latter’s speedy
service, the typewriter was ultimately left unrepaired. Petitioner eventually asked
for the return of his typewriter. Alas, it was returned in shambles and some of its
parts missing. He commissioned another for its repair. He then asked through the
Court, payment for damages (isolated on the relevant ones only) for the non-
repair, and the payment petitioner made to another repairman.
Remedies: Court of First of Instance (actually won by PETITIONER but unsatisfied
with the rule.
Issue: Given these set of facts, the question posed now is whether or not
defendant is liable for these damages petitioner is allegedly entitled to
Rule: Art. 1167 of the Civil Code provides that if a person obliged to do something
is fails to do it, the same shall be executed at his cost. Also, Art. 1170 provides that
those who in the performance of their obligation are guilty of contravening the
tenor of such, are liable for damages.
Application: In this case, even from his own admission, respondent failed to repair
the typewriter. By virtue of Art. 1167, he is liable for the cost petitioner incurred
when he commissioned another person for its repair. As to his return to petitioner
of an already-cannibalized, unrepaired, and incomplete typewriter, he
contravened the tenor of his obligation, for he was obliged to return it to the same
condition it was when he received it (Art. 1170).
Conclusion: From the foregoing, it is likely that defendant will be liable for the
damages petitioner, as he claimed, are entitled to.
Note: Moral and temperate damages, and attorney fees was not affirmed as they
were not alleged in the complaint.
 Tanguilig vs CA
G.R. No. 117190, January 2, 1997
Facts: Petitioner proposed to private respondent to construct windmill for him
with a guaranty. They eventually agreed upon such, with respondent paying for a
downpayment and an installment payment, with a certain balance. Later on,
respondent refused to pay the balance, because he already paid another to
construct a deep well, which petitioner failed to build. Furthermore, petitioner
states that non-payment may also because of destruction of the windmill, which
he claims a cause of fortuitous event.
Remedies: Regional Trial Court (won by PETITIONER)
Court of Appeals (won by RESPONDENT)
Issue: Given these set of facts, the questions posed is whether or not such
construction of the windmill included the installation of deep well (underlying
issue: which may institute respondent to commission it to another – if it was
allowed.) and whether petitioner is under obligation the reconstruction.
Rule: Art. 1371 of the Civil Code provides that the parties’ contemporaneous and
subsequent acts shall be the consideration to judge intention of contracting
parties. Next, Art. 1240 provides that payment shall be made to the person whose
favor the obligation has been constituted or any person authorized to receive it.
Then, Art. 1174 provides that no person shall be responsible for events which could
not be foreseen or inevitable. Finally, Nakpil v CA provides for the precepts to who
may avail defense of a “fortuitous event.”
Application: In this case, the words “suitable for” and “for” in the proposal were
meant to convey the idea it appropriateness for a deep well. Also acts before and
after the contract does not uphold respondent’s defense (Art. 1371).
Consequently, Art. 1240 cannot be raised for two reasons: (1) obligation did not
include construction of the deep well, (2) no substantial proof that he was
authorize to receive such payment in lieu of petitioner.
Onto the second issue, Art. 1174 cannot be invoked because it
was proven that it was not a typhoon that wrecked the windmill but a strong wind,
which does not constitute a fortuitous event.
Conclusion: From the foregoing, it is likely that the Court will award petitioner of
the balance. However, he is liable for the reconstruction of the windmill
Enriquez vs Ramos
G.R. No. L-23616, September 30, 1976
Facts: Plaintiffs averred they sold to defendant lots, of which P200,000 the
remaining balance with interests. They also executed a mortgage (if not
registered, obligation is due and demandable; mortgagor to shoulder taxes) of
various lands in favor of plaintiff should defendant fail to pay. Currently, plaintiffs
argued that defendant violated such agreement/s (?): (1) refused to pay on
stipulated period, (2) a property was not registered for mortgage, and (3) taxes
were not paid. Defendants replied: (1) by res judicata, she has not paid the taxes
and registered the mortgage as it was only a minor matter, (2) the paving of the
roads, which attracted defendant on the sold lots, were still incomplete, and (3)
no demands of payment were made upon completion. No contention however
that she has not paid the balance.
Remedy: Court of First Instance (won by DEFENDANT)
Issue: From the foregoing facts, the question posed is whether or not respondent
has defaulted from her payments.
Rule: Art. 1187 of the Civil Code provides that effects of a conditional obligation to
give, once condition is fulfilled, shall retroact to the day of the constitution of the
obligation.
Application: In this case, the paving of the roads was the prime consideration of
defendant of buying the lots, which she will turn to a subdivision. Any aversion by
defendant (e.g. no trees and water system, acceptance of City Planning) definitely
are not within those contemplated. With such obligation resolved, defendant
cannot argue that proper demands were not made as effect of such demand
retroacts of the constitution of obligation (Art. 1187)
Conclusion: From the foregoing, it seems that the Court may favor the plaintiff-
appellee for his cause.
Notes: Art. 1169 provides that demand by creditor shall not be necessary when the
law expressly so declare (may refer to Art. 1187 thereafter)
 DBP vs Mirang
G.R. No. L-29130, August 8, 1975
Facts: Petitioner granted defendant (now the appealing party) a loan for the
latter’s farming needs, with his homestead as the guaranty. Unfortunately, a
mosaic disease affected defendant’s plantation, and has eventually failed to pay
for the annual amortizations of his loan. His property then was sold for public
auction, with which plaintiff itself the winning bidder. Defendant then aver that
the mortgage absolves him from indebtedness. If not, he prays for reduction by
reason of the attack of the mosaic disease upon the plants.
Remedy: Court of First Instance (won by Plaintiff-appellee)
Issue: Given of the facts, the question posed is whether or not the sale of
defendant’s property absolves him of his indebtedness. Also whether he can’t be
absolved, be at least granted reduction to such indebtedness
Rule: In Philippine Bank of Commerce vs de Vera, it is provided that a real estate
mortgage does not limit or minimize the amount of the obligation. Furthermore,
if after the sale, there is deficiency, the mortgagee may proceed for a proper
action.
Application: In this case, sale of defendant’s homestead in public auction, upon
collection of proceeds thereafter, does not absolve him of his total debt. Also, the
misfortune defendant faced does not justify disregard of the terms of the contract
he entered into.
Conclusion: From the foregoing, it is likely that defendant would be required for
the payment of the deficiency and cannot be necessarily entitled to reduction of
such indebtedness.
Repide vs Afzelius
G.R. No. L-13438, November 20, 1918
Facts: Plaintiff agreed to sell his land to defendant, on a terms of payment of lump
sum and the remaining balance to be paid in monthly installments. The land itself
was to be mortgaged for security. Unfortunately, defendant withdrew his interest
of the purchase. for reasons of equity or lack of money. He furthers that obligation
is extinguished. Plaintiff however demand the execution of the agreement.
Remedy: Court of First Instance (won by DEFENDANT)
Issue: From the given facts, the question posed is whether or not plaintiff may
demand the performance of creditor of their agreement.
Rule: According to Art. 1451 of the Spanish Civil Code, a promise to sell or buy,
when there is an agreement as to the thing and the price, entitles the contracting
parties reciprocally to demand the fulfillment of the contract.
Application: In this case, they already had a prior agreement for plaintiff to sell the
land, and for defendant to buy it. Reasons of equitable doctrine cannot be held if
there exists a law demanding such and does not absolve him of obligation.
Conclusion: From the foregoing, it is likely that plaintiff in this case may have a
favorable judgment against the defendant.
Note: Art. 1124 provides right of prejudiced person exacting performance of
obligation or indemnity for damages and payment of interest.
 Dioquino vs Laureano
G.R. No. L-25906, May 28, 1970
Facts: Plaintiff and defendant drove together to the office of the latter to register
former’s vehicle. While on the way, some mischievous kids stoned said vehicle,
breaking the windshield. The defendant, who effectively borrowed the car,
refused to hold the children liable for shattering the windshield as it was due to a
fortuitous event. Plaintiff then filed this action against defendant.
Remedy: Court of First Instance (won by PLAINTIFF v principal defendant)
Issue: Given of the facts, the question posed is whether or not the defendant, the
borrower of the car, is absolved of liability and (underlying issue) the stoning of
children may be considered fortuitous.
Rule: Art. 1174 of the Civil Code provides no person shall be responsible for those
events which could not be, foreseen, or which, though foreseen were inevitable.
Application: In this case, defendant clearly did not foresee children would perform
such mischief upon plaintiff’s vehicle. It definitely constitutes a fortuitous event
(Art. 1174). Also mere difficulty to foresee is not impossibility to foresee the same.
Conclusion: From the foregoing, it seems that defendant may be relieved from
paying any indemnity to plaintiff as such circumstance was fortuitous in nature.
Republic vs Luzon Stevedoring Corp.
G.R. No. L-21749, September 29, 1967
Facts: Defendant (now appellee) had his barge towed by his two tugboats,
presumably to guide such barge through the Pasig River. Unfortunately, the barge
rammed against one of the wooden piles of the Nagtahan Bailey Bridge to
collapse. Plaintiff, representing the residents of the area, filed for damages.
Defendant however averred that knowing the presence of an unfavorable, heavy
downpour, exercised due diligence on their action, though ultimately resulted to
such accident. Thus, they deemed that a fortuitous event occurred, relieving them
of any liability.
Remedy: Court of First Instance (won by PLAINTIFF)
Issue: Given these facts, the question posed is whether or not the defendant
should be held liable (underlying issue) considering that they may have exercised
due diligence and the unfavorable weather conditions should be blamed for the
incident.
Rule: Art. 1174 of the Civil Code effectively defines what fortuitous events are:
events that could not be foreseen, or which though foreseen, were inevitable.
Application: In this case, herein case is negated by the definition of what fortuitous
events are by their acknowledgment that they there was an unfavorable condition
that may pose peril, yet they pushed through of their action (Art. 1174). They
cannot blame the improper placement of the bridge as they have been crossing
this bridge for years.
Conclusion: From the foregoing, it seems that defendant would be held liable by
the Court for negligence for assuming such risk, but ultimately botched on the
execution of their act.
 Victorias Planters Association vs Victorias Milling Co.
G.R. No. L-6648, July 25, 1955
Facts: Petitioners and respondent executed milling contracts that obliges the the
latter to construct a sugar central and the former to deliver produced sugar to be
milled. The period of their contracts stipulated was to last for 30 years. However,
war ravaged the country (well within the latter half of the contracts’ period),
rendering the planters unable to deliver stipulated sugar cane during the final four
years of the war, and two years for the reconstruction of the sugar central.
Petitioners contend that the war must be considered a fortuitous event and must
not be held against them. Respondent contends that they contracted for 30
milling years and not 30 calendar years. Thus, petitioners are still liable for another
6 years of delivering sugar.
Remedy: Court of First Instance (won by PETITIONERS-APPELLEE)
Issue: Given these facts, the question posed is whether or not the stipulated
period is to be construed as 30 milling years and not 30 calendar years (underlying
issue) considering war, allegedly a fortuitous event, ravaged the country which
rendered the inactivity in the sugar central for six years.
Rule: Art. 1174 of the Civil Code provides that a fortuitous event relieves the obligor
from fulfilling a contractual obligation.
Application: In this case, the six years of non-activity cannot be deducted from the
30-year period agreed upon by the parties. Furthermore, the war was a fortuitous
event that made the inability of the planters to produce sugar needed to be
delivered (Art. 1174).
Conclusion: From the foregoing, it is likely that the Court will not hold such non-
delivery of the sugar to be milled, and the contract may be extinguished.
Note: Nemo tenetur ad impossibilia – an obligation cannot be demanded when
performance is impossible. The performance of what the law has written of
cannot be demanded and required
In Re: Estate of Ceballos
G.R. No. L-4190, December 17, 1908
Facts: Namesake Ceballos died, effectively causing the dissolution of his business
partnership with a certain Sanchez. After the heirs were assigned and awarded of
their respective properties, a mortgaged property (presumably in the course of
the business partnership) was foreclosed in favor of Don Ortiz. The wife, Doña
Matilde, of namesake Ceballos claims, as the wife of the deceased, she still has an
interest on the mortgaged property. Ortiz avers that all interests she might have
had are deemed withdrawn upon execution of sale.
Remedy: Court of First Instance (won by by WIDOW CEBALLOS)
Issue: Given of the facts, the question posed is whether or not the sale of property
effectively strips the wife of claim to redeem such mortgaged property.
Rule: Art. 1111 of the Spanish Civil Code provides that creditors may enforce all the
rights and actions of the debtor for collecting what is due to the former. However,
those inherent in the latter, cannot be enforced. Dela Rosa v Santos further
provides that an owner is entitled to remain in the possession of the land until
proper redemption is made.
Application: In this case, right of redemption are personal in nature, and therefore
Doña Matilde’s conjugal and usufructuary rights cannot be claimed by Don Ortiz.
Conclusion: From the foregoing, it seems that the Court will rule that Doña Matilde
retains her personal rights, and therefore may claim redemption on the foreclosed
land.
Note: Art. 1111 shares a similar definition of Art. 1177 which provides
“creditors…may exercise all the rights and bring all the actions of the latter for
the same purpose, save those which are inherent in his person...”
 Bastida and Ysmael & Co. vs Dy Buncio
G.R. No. L-5145, May 27, 1953

Facts: Co-plaintiffs are respectively industrial and capitalist partners of each other.
Bastida was authorized by defendant to broker for his partner for the purchase of
defendant’s factory for co-petitioners. Though Ysmael did not agree on the sale,
he did express interest but eventually settled on leasing the factory. Along with
the agreement of lease (for two years), defendant also gave an OPTION to buy the
factory within the agreed period at a discount. The OPTION was placed in Bastida’s
name (there was a commission if the transaction was named to him), eventually
however, it was transferred to Ysmael on defendant’s consent. Complications
arose; and ultimately, defendant refused to honor the OPTION he granted
because (1) by virtue of the Constitution, aliens – Bastida being a Spanish citizen –
cannot acquire real property and (2) he only reserved such right to Bastida alone,
and such OPTION cannot be exercise nor exercised by Ysmael.

Remedy: Court of First Instance (won by PLAINTIFF)

Issue: Given these facts, the questions posed are whether or not the OPTION is
still valid (underlying issue) and consequently, if such was valid whether the
transfer to Ysmael is standing.

Rule: Art. 1397 of the Civil Code provides that one who has capacity to contract
may not invoke incapacity of the party whom they contracted to. Also, Art. 1178 of
the Civil Code provides that all rights acquired in virtue of an obligation are
transmissible if there is no stipulation to the contrary.

Application: In this case, defendant well knew that Bastida had no financial means.
However, he assigned the OPTION to him to accommodate his request for such
transaction would warrant him a commission for brokering. Effectively however,
it was still between defendant and Ysmael. He therefore cannot allege Bastida’s
incapacity from being an alien (Art.1397) Lastly, there was no impediment, legal or
contractual, to transfer his right of OPTION to Ysmael, thus; such right arising from
contract is transmissible.

Conclusion: From the foregoing, it is likely that the Court will dismiss defendant’s
complaint and favor the plaintiffs.

Note: OPTION has a legal implication.