mais Flashcards
1.In their contract, Pedro obliged himself to manufacture and deliver 10 chairs for Juan at Php1,000 per chair. However, due to lack of lumber because of the recent “super” typhoon, Pedro only manufactured 8 chairs and delivered them to Juan. Is the obligation of Pedro to deliver 10 chairs extinguished? What are the respective rights of Pedro and Juan?
Yes, the obligation of Pedro to deliver 10 chairs is extinguished. Pedro can recover P8,000 as payment for 8 chairs from Juan, and Juan may not fully pay the P10,000 as agreed in the contract but may only pay P8,000 for the 8 chairs delivered by Pedro and enforce his right for the damages he suffered.
Under the New Civil Code, if the obligation has been substantially performed in good faith, the obligor may recover as though there had been a strict and complete fulfillment, less damages suffered by the obligee.
(MAY ADD: KNOWING ITS INCOMPLETENESS, GIDAWAT NIMO!)
In the instant case, Pedro is presumed to be in good faith, his delivery of only 8 chairs to Juan instead of 10 is due to the occurrence of the super typhoon which causes the lumber shortage, a reason beyond Pedro’s control, hence after the substantial performance in good faith of Pedro which is the delivery of 8 chairs, his obligation to deliver 10 chairs to Juan is extinguished.
Therefore, Pedro can recover P8,000 (P1000x8) payment for the 8 chairs he delivered to Juan, and Juan may only pay the same (P8,000) to Pedro and enforce his right to damages for failure of Pedro to deliver the difference.
2.Spouses H and W were the owners and proprietors of the Q store and were engaged in the sale and distribution of X Corp.’s beer products. X Corp. sold beer products on credit to the spouses in the amount of Php28,650. Thereafter, the spouses made partial payment of Php3,740 leaving an unpaid balance of Php24,910. As they failed to pay despite repeated demands, X. Corp. filed an action of a sum of money against them. The spouses denied liability claiming that they had already paid X Corp. in full on four separate occasions. To substantiate this claim, the spouses presented 4 Temporary Charge Sales Liquidation Receipts. H testified that he made the foregoing payments to an X Corp. supervisor who came in an X Corp. van. He was then showed a list of customers’ accountabilities which included his account. The defendant, in good faith, then paid to the supervisor, and he was, in turn, issued genuine X Corp. liquidation receipts. For its part, X Corp. submitted a publisher’s affidavit to prove that the entire booklet of Temporary Charge Sales Liquidation Receipts bearing nos. 27301-27350 was reported lost by it, and that it caused the publication of the notice of loss. Was there valid payment?
No,
Payment shall be made to the person in whose favor the obligation has been constituted, or his successor in interest, or any person authorized to receive it.
The basis of agency is representation a person dealing with an agent is put upon inquiry and must discover upon his perie the authority of the agent. Person dealing with an assumed agent are bound at their perie to ascertain not only the fact of agency, but also the nature and extent of authority and in case failed to discharge this burden, considering that the private respondent uchement denied that the payments were accepted by it and were made do its authorized representative.
Pedro and spouses Juan and Maria entered into a contract to sell involving a parcel of land. The land was untitled although Juan and Maria were paying taxes thereon. Under the contract, Pedro undertook to secure title to the property in Juan and Maria’s names. Of the Php312,840 purchase price, Pedro was to pay a down payment of Php50,000 upon signing of the contract, and the balance was to be paid within ten days from the issuance of a court order directing the issuance of a decree of registration for the property. On December 27, 1989, the court ordered the issuance of a decree of land registration for the subject property. payment of Php100,000 to the spouses through a BPI check. Shortly thereafter, in a letter, the spouses offered to sell to Pedro one-half of the property for all the payments the latter had made, instead of rescinding the contract. Pedro did not accept the proposal of the spouses. Instead, in a letter, Y offered to pay the balance in full for the entire property. The spouses refused the offer. Pedro instituted an action for the specific performance against the spouses, alleging that he had substantially complied with his obligation under the contract to sell. Is the contention of Pedro correct?
No,
Article 1248.
Unless there is an express stipulation to that effect, the creditor cannot be compelled partially to receive the prestations in which the obligation consists. Neither may the debtor be required to make partial payments.
Manuel was the president and chairman of “M Transport Services”, a single proprietorship. Sometime in 1972, M Transport Services won a bid for the operation of a fleet of taxicabs within the Subic Naval Base in Olangapo. As the highest bidder, Manuel was to provide radio-controlled taxi service within the US Naval Base, Subic Bay. A contract was signed between Manuel and Pedro (General Manager of W Electronics Laboratories) Pedro contacted his Japanese supplier and placed an order for the transceivers. Pedro was to deliver the transceivers within 60 to 90 days after receiving notice from Manuel of the assigned radio frequency, “taking note of Government Regulations.” On September 25, 1972, the Radio Control Office issued Administrative Circular No. 4where the subject is: SUSPENDING THE ACCEPTANCE AND PROCESSING OFAPPLICATIONS FOR RADIO STATION CONSTRUCTION PERMITS AND FORPERMITS TO OWN AND/OR POSSESS RADIO TRANSMITTERS ORTRANSCEIVERS. On January 10, 1973, Manuel applied for a letter of credit from the Central bank but it was refused due to the refusal of the Philippine Government to issue a permit to import the transceivers, Manuel commenced operation of the taxicabs using radio units borrowed from the US government. Pedro thus canceled his order with his Japanese supplier. Manuel testified that a permit to import the transceivers from Japan was denied by the Radio Control Board. He stated that he, together with Pedro went to the Radio Control Office and were denied a permit to permit. According to Manuel, this prevented him from securing a letter of credit from the Central Bank. May Manuel be released from his obligation under the contract?
Yes, Manuel is released from his obligation under the contract.
Under Article 1267 of the Civil Code of the Philippines,”When the service has become so difficult as to be manifestly beyond the contemplation of the parties, the obligor may also be released therefrom, in whole or in part.”
Here, Manuel’s inability to secure a letter of credit from Central bank and to comply with his obligation was a direct consequence of the refusal of the Philippine Government to issue a permit to import transceivers. Hence, he cannot be faulted.
H and W obtained a loan in the amount of Php1M from X bank. The obligation matured on September 8, 1981; the bank, however, granted an extension but only up until December 29, 1981.Despite several demands form the bank, H and W failed to settle the debt. The bank filed a complaint for recovery of the due amount. On November 16, 1998, H and W filed a motion to admit newly discovered evidence, alleging that while the case was pending before the trial court, H and W executed a real estate mortgage on January 18, 1984 to secure the existing indebtedness of H and W with the bank. They contended that the execution of the real estate mortgage had the effect of novating the contract between them and the bank. Is the contention of the spouses H and W correct?
In order that an obligation may be extinguished by another which substitute the same, it is imperative that it be so declared in unequivocal terms, or as that the old and new obligations be on every point incompatible with each other.
X Inc. entered into a Contract of Lease with Y over a commercial space for the year1999-2000 on which X Inc. intended to operate a branch. While X Inc. was able to secure the necessary licenses and permits for the year 1999, it failed to commence business operations. For the year 2000, X Inc.’s application for renewal of barangay business clearance was held in abeyance “until further study of its kitchen facilities. ”Hence, X Inc. was unable to operate. Fearing further business losses, X Inc. communicated its intent to terminate the lease contract to Y who, however, did not accede. In August 2000, X Inc. for the second time, purportedly informed Y of its intent to terminate the lease, and it in fact stopped paying rent. By letter of March 26, 2001, Y again demanded payment of rentals from X Inc. X Inc. denied liability. Is X Inc. liable to Y?
Yes. X Inc. is liable to Y.
Under the Civil Code, the Doctrine of Unforeseen Events, When the service has become so difficult as to be manifestly beyond the contemplation of the parties, the obligor may also be released therefrom, in whole or in part.
However, In this case, X Inc. was able to secure the permits, licenses and authority to operate when the lease contract was executed. Its failure to renew these permits, licenses and authority for the succeeding year, cannot be construed as an unforeseen event to warrant the application of Article 1267. X Inc. obligation to pay rent was not extinguished upon its failure to secure permits to operate.
Therefore, X Inc. is liable to Y.
M obtained a commercial loan in the amount of Php1M from T Lending Corp. The loan was evidenced by a promissory note dated December 11, 1987 and secured by a real estate mortgage executed on December 15, 1987 over the spouse’s M and N’s land and 4-storey building. To be able to pay the loan, spouses M and N applied for a loan with P Bank and offered as collateral the same properties the previously mortgaged to T Lending Corp. P bank approved the loan application for Php1.3M through a letter dated July 8, 1989. The release of the amount however, was conditioned on the cancellation of the mortgage in favor of T Lending Corp. On July 20, 1989, M executed a SPA authorizing S, T Lending Corp.’s president, to collect the proceeds of his bank P bank loan. However, the bank required S to first sign a deed of release/cancellation of mortgage before they would release the proceeds, but S refused to sign. As a result, the proceeds were not released. Consequently, M and N defaulted. S instituted foreclosure. To prevent the foreclosure, M and N filed an action for specific performance and damages to compel S to sign the deed of release/cancellation of mortgage and to receive the proceeds of the loan from Pbank. Will the unjustified refusal of S to sign the release/cancellation of mortgage extinguish the obligation of spouses M and N from its obligation from S?
No, the obligation of spouses M and N was not extinguished.
Art 1256 of the New Civil Code provides that, if the creditor to whom tender of payment has been made refuses without just cause to accept it, the debtor shall be released from responsibility by consignation of the thing or sum due.
No, refusal without just cause is not equivalent to payment; to have the effect of payment and the consequent extinguishment of the obligation to oat, the law requires the companion acts of tender of payment and consignation.
Spouses Cruz secured several loans from Maria at monthly interest rates of 6% but despite demands they failed to settle their obligation amounting to Php773,000,exclusive of interests. Spouses Cruz admitted that they secured loans from Maria. They used the money to relend to other borrowers at higher interest rates. However, the spouses allegedly executed deeds of assignment in favor of Maria and that their debtors have executed promissory notes in favor of Maria. According to the spouses, this resulted in a novation of the original obligation to Maria. As suggested by Maria’s lawyer, the spouses indorsed the accounts of their debtors to Maria so that the latter would be the one to collect from the debtors of the spouses and that the spouses would no longer have any obligation with Maria. The spouses insisted that by virtue of these documents, Maria became the new collector of their debtors and the obligation to pay the balance of their loans had been extinguished. Maria was only able to collect the total amount of Php 301,000 from the debtors of the spouses. She tried to collect the balance but to no avail.
What is/are the effect/s of the deeds of assignment executed by spouses Cruz in favor of Maria and promissory notes executed by the debtors of the spouses in favor of Maria?
Sps Cruz’ obligation to pay the balance of their account with petitioner was extinguished, pro tanto , by the deeds of assignment of credit executed in favor of Maria.
Under Article 1231(b) of the New Civil Code, novation is enumerated as one of the ways by which obligations are extinguished. Obligations may be modified by changing their object or principal creditor or by substituting the person of the debtor.
All the requisites for a valid dation in payment are present in this case. As gleaned from the deeds, respondent Felicidad assigned to petitioner her credits “to make good” the balance of her obligation. Felicidad testified that she executed the deeds to enable her to make partial payments of her account, since she could not comply with petitioner’s frenetic demands to pay the account in cash. Petitioner and respondent Felicidad agreed to relieve the latter of her obligation to pay the balance of her account, and for petitioner to collect the same from respondent’s debtors.
JURISPRUDENCE (aquintey vs) NOVATION
- Spouses Villanueva applied for and were granted commercial letters of credit by FEBTC for a period of 8 months in connection with the importation of raw textile materials to be used in manufacturing garments. The spouses acting both in their capacity as officers of ABC Corp. and in their personal capacities executed 11 trust receipts to secure the release of the raw materials to ABC Corp. The imported fabrics were withdrawn by ABC Corp under the 11 trust receipts executed by the spouses. Due to their failure to settle their obligations, FEBTC sent a final demand letter to the spouses, however, the latter failed to comply with their obligations stated in the trust receipts agreement. After the FEBTC filed a criminal case for estafa against the spouses, the latter deposited the amount of Php2,800,000 with its account in the bank. However, the RTC still convicted the spouses. The CA reversed the conviction ruling that in making the deposit of the amount, the spouses are entitled to set-off, by way of compensation, their obligations to the bank on their trust receipt liability. Is the CA correct in reversing the conviction of the spouses?
- A, B, and C filed an action for annulment of contracts against D Bank. They claimed that D Bank induced them to avail of its credit facilities by offering low interest rates so they accepted D Bank’s proposal and signed the bank’s pre-printed promissory notes on various dates. They, however, were unaware that the documents contained identical escalation clauses granting D bank authority to increase interest rates without their consent. D Bank asserted that A, B, and C knowingly accepted all the terms and conditions contained in the promissory notes. In fact, they continuously availed of and benefited from D Bank’s credit facilities for five years. After trial, the Regional Trial Court upheld the validity of the promissory notes. The trial court took judicial notice of the steep depreciation of the peso during the intervening period and declared the existence of extraordinary deflation. Is the trial court correct?
