CIVREV2-1920-Dean-Delson-Case-Digests-Leonen-Ponencia.pdf - SAN BEDA UNIVERSITY COLLEGE OF LAW CIVIL LAW REVIEW II CASE DIGESTS PENNED CASES OF JUSTICE

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Unformatted text preview: SAN BEDA UNIVERSITY COLLEGE OF LAW CIVIL LAW REVIEW II CASE DIGESTS PENNED CASES OF JUSTICE MARVIC LEONEN Prepared by: Sections S, B, C, D, E and F A.Y. 2019- 2020 Submitted to: Dean Marciano G. Delson Part Ten – Leonen Cases I. Obligations and Contracts • Cases: (1) Arco Pulp and Paper Co., Inc. v. Lim, G.R. No. 20686, June 25, 2014 (2) Aboitiz Equity Ventures, Inc. v. Chiongbian, G.R. No. 197530, July 9, 2014 (3) Loria v. Muñoz, Jr., G.R. No. 187240, October 15, 2014 (4) Saudi Arabian Airlines (Saudia) v. Rebesencio, G.R. No. 198587, January 14, 2015 (5) The Wellex Group, Inc. v. U-Land Airlines, Co., Ltd., G.R. No. 167519, January 14, 2015 (6) Bases Conversion Development Authority v. DMCI Project Developers, Inc., G.R. No. 173137 & 173170, January 11, 2016 (7) University of Mindanao, Inc. v. Bangko Sentral ng Pilipinas, G.R. Nos. 194964-65, January 11, 2016 (8) Spouses Lam v. Kodak Phils., Ltd., G.R. No. 167615, January 11, 2016 (9) Spouses Limso v. Philippine National Bank, G.R. Nos. 158622, 169441, 172958, 173194, 196958, 197120 & 205463, January 27, 2016 (10) Philippine Economic Zone Authority v. Pilhino Sales Corp., G.R. No. 185765, September 28, 2016 (11) Chinatrust (Philippines) Commercial Bank v. Turner, G.R. No. 191458, July 3, 2017 (12) CE Construction Corp. v. Araneta Center, Inc., G.R. No. 192725, August 9, 2017 (13) Department of Public Works and Highways v. CMC/Monark/Pacific/Hi-Tri Joint Venture, G.R. No. 179732, September 13, 2017 (14) Oriental Assurance Corp. v. Ong, G.R. No. 189524, October 11, 2017 (15) Makati Tuscany Condominium Corp. v. Multi-Realty Development Corp., G.R. No. 185530, April 18, 2018 (16) Noell Whessoe, Inc. v. Independent Testing Consultants, Inc., G.R. No. 199851, November 7, 2018 (17) Camp John Hay Development Corp. v. Charter Chemical and Coating Corp., G.R. No. 198849, August 7, 2019 (18) Tankeh v. Development Bank of the Philippines, G.R. No. 171428, November 11, 2013 (19) Metro Rail Transit Development Corp. v. Gammon Philippines, Inc, G.R. No. 20041, January 17, 2018 II. Sales and Lease • Cases: (1) Eagleridge Development Corp. v. Cameron Granville 3 Asset Management, Inc., G.R. No. 204700, April 10, 2013 (2) Heirs of Lopez v. Development Bank of the Philippines, G.R. No. 193551, November 19, 2014 (3) Cabrera v. Ysaac, G.R. No. 166790, November 19, 2014 (4) Mahinay v. Dura Tire & Rubber Industries, Inc., G.R. No. 194152, June 5, 2017 (5) Dee Hwa Liong Foundation Medical Center v. Asiamed Supplies and Equipment Corp., G.R. No. 205638, August 23, 2017 (6) Orbe v. Filinvest Land, Inc., G.R. No. 208185, September 6, 2017 (7) Racelis v. Spouses Javier, G.R. No. 18969, January 29, 2018 (8) Amoguis v. Ballado, G.R. No. 189626, August 20, 2018 (9) Metro Bottled Water Corp. v. Andrada Construction & Development Corp., Inc., G.R. No. 202430, March 6, 2019 (10) BNL Management Corp. v. Uy, G.R. No. 210297, April 3, 2019 (11) Olivarez Realty Corp. v. Castillo, G.R. No. 196251, July 9, 2014 (12) Poole-Blunden v. Union Bank of the Philippines, G.R. No. 205838, November 29, 2017 (13) Land Bank of the Philippines v. Musni, G.R. No. 206343, February 22, 2017 (14) Malabanan v. Malabanan, Jr., G.R. No. 187225, March 6, 2019 III. Partnership, Agency, and Trusts • Cases: (1) Home Guaranty Corp. v. La Savoie Development Corp., G.R. No. 168616, January 28, 2015 (2) International Exchange Bank v. Spouses Briones, G.R. No. 205657, March 29, 2017 (3) Calubad v. Ricarcen Development Corp., G.R. No. 202364, August 30, 2017 (4) Cancio v. Performance Foreign Exchange Corp., G.R. No. 18237, June 6, 2018 (5) Spouses Yulo v. Bank of the Philippine Islands, G.R. No. 217044, January 16, 2019 1 IV. Credit Transactions • Cases: (1) Eagleridge Development Corp. v. Cameron Granville 3 Asset Management, Inc., G.R. No. 204700 (Resolution), November 24, 2014 (2) Stronghold Insurance Company, Inc. v. Spouses Stroem, G.R. No. 204689, January 21, 2015 (3) Spouses Abella v. Spouses Abella, G.R. No. 195166, July 8, 2015 (4) Metropolitan Bank & Trust Co. v. G & P Builders, Inc., G.R. No. 18959, November 23, 2015 (5) Development Bank of the Philippines v. Sta. Ines Melale Forest Products Corp., G.R. Nos. 193068 & 193099, February 1, 2017 (6) FGU Insurance Corp. v. Spouses Roxas, G.R. Nos. 189526 & 189656, August 9, 2017 (7) Cotoner-Zacarias v. Spouses Revilla, G.R. No. 19091, November 12, 2014 (8) Vitug v. Abuda, G.R. No. 201264, January 11, 2016 V. Land Titles and Deeds • Cases: (1) Cathay Metal Corp. v. Laguna West Multi-Purpose Cooperative, Inc., G.R. No. 17224, July 2, 2014 (2) Automat Realty and Development Corp. v. Spouses Dela Cruz, G.R. No. 192026, October 1, 2014 (3) Espiritu v. Del Rosario, G.R. No. 204964, October 15, 2014 (4) Andres v. Philippine National Bank, G.R. No. 173548, October 15, 2014 (5) Canlas v. Republic, G.R. No. 200894, November 10, 2014 (6) De Pedro v. Romasan Development Corp., G.R. No. 194751, November 26, 2014 (7) Leong v. See, G.R. No. 194077, December 3, 2014 (8) Register of Deeds of Negros Occidental v. Anglo, Sr., G.R. No. 17184, August 5, 2015 (9) La Tondeña, Inc. v. Republic, G.R. No. 194617, August 5, 2015 (10) Mendoza v. Valte, G.R. No. 172961, September 7, 2015 (11) Republic v. Sogod Development Corp., G.R. No. 175760, February 17, 2016 (12) Heirs of Delfin v. National Housing Authority, G.R. No. 193618, November 28, 2016 (13) Presidential Decree No. 1271 Committee v. De Guzman, G.R. Nos. 187291 & 187334, December 5, 2016 (14) Heirs of Nuñez, Sr. v. Heirs of Villanoza, G.R. No. 218666, April 26, 2017 (15) Republic v. Spouses Go, G.R. No. 197297, August 2, 2017 (16) Republic v. Spouses Noval, G.R. No. 170316, September 18, 2017 (17) Taar v. Lawan, G.R. No. 190922, October 11, 2017 (18) Republic v. Malijan-Javier, G.R. No. 214367, April 4, 2018 (19) Galindez v. Firmalan, G.R. No. 187186, June 6, 2018 (20) Republic v. Heirs of Daquer, G.R. No. 193657, September 4, 2018 (21) Kawayan Hills Corp. v. Court of Appeals, G.R. No. 203090, September 5, 2018 (22) Sindophil, Inc. v. Republic, G.R. No. 204594, November 7, 2018 (23) Maltos v. Heirs of Borromeo, G.R. No. 172720, September 14, 2015 (24) Spouses Aboitiz v. Spouses Po, G.R. Nos. 208450 & 208497, June 5, 2017 VI. Torts and Damages • Cases: (1) City of Dagupan v. Maramba, G.R. No. 174411, July 2, 2014 (2) Philippine National Bank v. Santos, G.R. Nos. 208293 & 208295, December 10, 2014 (3) Gutierrez v. Commission on Audit, G.R. No. 200628, January 13, 2015 (4) Caravan Travel and Tours International, Inc. v. Abejar, G.R. No. 170631, February 10, 2016 (5) Limlingan v. Asian Institute of Management, Inc., G.R. Nos. 220481 & 22053, February 17, 2016 (6) Department of Public Works and Highways v. City Advertising Ventures Corp., G.R. No. 182944, November 9, 2016 (7) Orient Freight International, Inc. v. Keihin-Everett Forwarding Co., Inc., G.R. No. 191937, August 9, 2017 (8) Visayan Electric Co., Inc. v. Alfeche, G.R. No. 209910, November 29, 2017 (9) Torreon v. Aparra, Jr., G.R. No. 188493, December 13, 2017 (10) Manila Electric Co. v. Nordec Philippines, G.R. Nos. 196020 & 196116, April 18, 2018 (11) Imperial v. Heirs of Spouses Bayaban, G.R. No. 197626, October 3, 2018 (12) Guy v. Tulfo, G.R. No. 213023, April 10, 2019 2 OBLIGATIONS AND CONTRACTS Obligations and Contracts NOVATION MUST BE STATED IN CLEAR AND UNEQUIVOCAL TERMS TO EXTINGUISH AN OBLIGATION; IT CANNOT BE PRESUMED AND MAY BE IMPLIED ONLY IF THE OLD AND NEW CONTRACTS ARE INCOMPATIBLE ON EVERY POINT 1. Arco Pulp and Paper Co., Inc. v. Lim G.R. No. 206806, June 25, 2014 Leonen, J. FACTS: This is a petition for review on certiorari by petitioner Arco Pulp and Paper Company Inc. (Arco Pulp), assailing the Court of Appeal’s decision ordering petitioner to pay respondent Dan Lim (Lim) the total amount of Php 7,220, 968.31 with interest at 12% per annum from the time of demand and other damages and fees. The parties entered into agreement wherein Lim would supply Arco Pulp scrap papers, cartons and other raw materials, and that Arco Pulp would either pay Lim in the value equivalent of the raw materials or deliver to him their finished products of equivalent value. When Lim delivered said materials, a check was issued as down payment, however the same check was dishonored for being drawn against a closed account. Meanwhile, Arco Pulp and a certain Eric Sy (Sy) executed a memorandum of agreement (MOA) where Arco Pulp bound themselves to deliver their finished products to Megapack Container Corporation, owned by Sy. According to the MOA the raw materials would be supplied by Lim. Thereafter, Lim sent a letter to Arco Pulp and Paper demanding payment of the amount, but to no avail. Hence, a complaint for collection of sum of money was filed. The RTC dismissed the complaint holding that a novation took place when the MOA was executed. On appeal to the CA, the latter reversed the RTC decision and rendered the assailed decision. Arco Pulp argues that the execution of the MOA constituted a novation of the original obligation since Sy became Lim’s new debtor, whereas Lim argues that the CA was correct in ruling that there was no proper novation in this case and in ordering the payment of P7,220,968.31 with damages since the debt of petitioners remains unpaid. ISSUE: Was the obligation between the parties extinguished by novation? HELD: No. The obligation between the parties was an alternative obligation. In an alternative obligation, there is more than one object, and the fulfillment of one is sufficient, determined by the choice of the debtor who generally has the right of election. The right of election is extinguished when the party who may exercise that option categorically and unequivocally makes his or her choice known. The choice of the debtor must also be communicated to the creditor who must receive notice of it. Further, The MOA did not constitute a novation of the original contract. When Arco Pulp opted instead to deliver the finished products to a third person, it did not novate the original obligation between the parties. Novation extinguishes an obligation between two parties when there is a substitution of objects or debtors or when there is subrogation of the creditor. It occurs only when the new contract declares so “in unequivocal terms” or that “the old and the new obligations be on every point incompatible with each other.” There is nothing in the MOA that states that with its execution, the obligation of Arco Pulp to Lim would be extinguished. It also does not state that Sy somehow substituted Arco Pulp as Lim’s debtor. It merely shows that Arco Pulp opted to deliver the finished products to a third person instead. In this case, Lim was not privy to the MOA, thus, his conformity to the contract need not be secured. If the MOA was intended to novate the original agreement between the parties, Lim must have first agreed to the substitution of Sy as his new debtor. The MOA must also state in clear and unequivocal terms that it has replaced the original obligation of Arco Pulp to Lim. Neither of these circumstances is present in this case. Arco Pulp’s act of tendering partial payment to Lim also conflicts with their alleged intent to pass on their obligation to Eric Sy. When Lim sent his letter of demand to Arco Pulp, and not to Sy, it showed that the former neither acknowledged nor consented to the latter as his new debtor. These acts, when taken together, clearly show that novation did not take place. Thus, Arco Pulp is liable to pay Lim. 3 OBLIGATIONS AND CONTRACTS Obligations and Contracts FOR ARBITRATION TO BE PROPER, IT IS IMPERATIVE THAT IT BE GROUNDED ON AN AGREEMENT BETWEEN THE PARTIES 2. Aboitiz Equity Ventures, Inc. v. Chiongbian G.R. No.197530, July 9, 2014 Leonen, J. FACTS: This is a petition for review on certiorari with application for the issuance of a TRO and/or WPI which prays that the assailed orders by the RTC denying petitioner Aboitiz Equity Ventures’ s motion to dismiss and motion for reconsideration be nullified and set aside and that judgment be rendered dismissing with prejudice the complaint. There are different contracts in this case entered into by the parties. 1. The January 8, 1996 Agreement in which ASC, CAGLI, and WLI principally owned by Aboitiz family, Gothong family and Chiongbian family respectively, merged their shipping enterprises, with WLI (subsequently renamed WG&A) as the surviving entity. Section 11.06 of this Agreement provided for arbitration as the mechanism for settling all disputes arising out of or in connection with the Agreement; 2. Annex SL-V of the Agreement between CAGLI and WLI (and excluded ASC and any other Aboitiz-controlled entity), and which confirmed WLI’s commitment to acquire certain inventories, worth not more than P400 million, of CAGLI. Annex SL-V stated that the acquisition was “pursuant to the Agreement.” It did not contain an arbitration clause; 3. The September 23, 2003 Share Purchase Agreement or SPA in which AEV agreed to purchase the Chiongbian and Gothong groups’ shares in WG&A’s issued and outstanding stock and renamed its business to ATSC. Section 6.5 of the SPA provided for arbitration as the mode of settling any dispute arising from the SPA. Section 6.8 of the SPA further provided that the Agreement of January 8, 1996 shall be deemed terminated except its Annex SL-V; Thereafter, CAGLI sent a letter to ATSC demanding that the latter pay the excess inventory it delivered to WLI. CAGLI likewise demanded AEV and respondent Chiongbian that they refer their dispute to arbitration. In response, AEV countered that the excess inventory had already been returned to CAGLI and that it should not be included in the dispute, considering that it is an entity separate and distinct from ATSC. Thus, CAGLI was constrained to file a complaint before the RTC against Chiongbian, ATSC, ASC, and AEV to compel them to submit to arbitration. ATSC and AEV moved for the dismissal of the case, contending that CAGLI did not have a cause of action for arbitration since its claim had already been paid. The RTC discharged AEV and ordered the other parties to proceed with arbitration. CAGLI filed another application for arbitration. Dissatisfied, ATSC and ASC moved for reconsideration but the RTC denied ATSC's Motion for Reconsideration. Hence, this petition. ISSUE: Is petitioner bound by an agreement to arbitrate with CAGLI with respect to the latter’s claims for unreturned inventories delivered to William Lines, Inc./WG&A, Inc./Aboitiz Transport System Corporation? HELD: No. There is no agreement binding AEV to arbitrate with CAGLI on the latter’s claims arising from Annex SL-V. For arbitration to be proper, it is imperative that it be grounded on an agreement between the parties. In this petition, not one of the parties — AEV, CAGLI, Victor S. Chiongbian, and Benjamin D. Gothong — has alleged and/or shown that the controversy is properly the subject of compulsory arbitration as provided by statute. Thus, the propriety of compelling AEV to submit itself to arbitration must necessarily be founded on contract. While the principle of privity or relativity of contracts acknowledges that contractual obligations are transmissible to a party’s assigns and heirs, AEV is not WLI’s successor-in-interest. In the period relevant to this petition, the transferee of the inventories transferred by CAGLI pursuant to Annex SL-V assumed three (3) names: (1) WLI, the original name of the entity that survived the merger under the January 8, 1996 Agreement; (2) WG&A, the name taken by WLI in the wake of the Agreement; and (3) ATSC, the name taken by WLI/WG&A in the wake of the SPA. As such, it is now ATSC that is liable under Annex SL-V. Pursuant to the January 8, 1996 Agreement, the Aboitiz group (via ASC) and the Gothong group (via CAGLI) became stockholders of WLI/WG&A, along with the Chiongbian group (which initially controlled WLI). This continued until, pursuant to the SPA, the Gothong group 4 and the Chiongbian group transferred their shares to AEV. With the SPA, AEV became a stockholder of WLI/WG&A, which was subsequently renamed ATSC. Nonetheless, AEV’s status as ATSC’s stockholder does not subject it to ATSC’s obligations It is basic that a corporation has a personality separate and distinct from that of its individual stockholders. AEV’s status as ATSC’s stockholder is, in and of itself, insufficient to make AEV liable for ATSC’s obligations. Moreover, the SPA does not contain any stipulation which makes AEV assume ATSC’s obligations. It is true that Section 6.8 of the SPA stipulates that the rights and obligations arising from Annex SL-V are not terminated. But all that Section 6.8 does is recognize that the obligations under Annex SL-V subsist despite the termination of the January 8, 1996 Agreement. At no point does the text of Section 6.8 support the position that AEV steps into the shoes of the obligor under Annex SL-V and assumes its obligations. Neither does Section 6.5 of the SPA suffice to compel AEV to submit itself to arbitration. While it is true that Section 6.5 mandates arbitration as the mode for settling disputes between the parties to the SPA, Section 6.5 does not indiscriminately cover any and all disputes which may arise between the parties to the SPA. Hence, petition is granted. 5 OBLIGATIONS AND CONTRACTS Obligations and Contracts NO PERSON SHOULD UNJUSTLY ENRICH HIMSELF OR HERSELF AT THE EXPENSE OF ANOTHER 3. Loria v. Muñoz, Jr. G.R. No. 187240, October 15, 2014 Leonen, J. FACTS: This is a petition for review on certiorari to set aside the Court of Appeals' decision and resolution in CA-G.R. CV No. 81882. The Court of Appeals ordered petitioner Carlos A. Loria to pay respondent Ludolfo P. Muñoz, Jr. ₱2,000,000.00 in actual damages with 12% interest per year from the filing of the complaint until full payment. Carlos A. Loria (Loria) invited Ludolfo P. Muñoz, Jr. (Muñoz) to advance ₱2,000,000.00 for a subcontract of a river-dredging project in Guinobatan. As Muñoz had already known Loria for five years, he accepted the latter’s proposal. However, the project was finished without it being subcontracted to Muñoz. Muñoz then filed a complaint for sum of money against Loria. The MTC ruled in favor of Muñoz and ordered Loria to return the ₱2,000,000.00. On appeal, the CA sustained the trial court’s findings. Hence, this petition for review on certiorari. Loria argues that their agreement was void for being contrary to law and public policy. That since their agreement was void, the parties were in pari delicto, and Muñoz should not be allowed to recover the money he gave under the contract. On the other hand, Muñoz argues that Loria’s petition raises questions of fact and law that the trial and appellate courts have already passed upon and resolved in his favor. He prays that this court deny Loria’s petition for raising questions of fact. ISSUE: Is Loria liable for the return of ₱2,000,000.00 to Muñoz? HELD: Yes, Loria is liable and must return Munoz’s ₱2,000,000.00 under the principle of unjust enrichment. Under Article 22 of the Civil Code of the Philippines, "every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him." There is unjust enrichment "when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience.” The principle of unjust enrichment has two conditions. First, a person must have been benefited without a real or valid basis or justification. Second, the benefit was derived at another person’s expense or damage. In this case, Loria received ₱2,000,000.00 from Muñoz for a subcontract of a government project to dredge the Masarawag and San Francisco Rivers in Guinobatan, Albay. However, contrary to the parties’ agreement, Muñoz was...
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