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Tuesday, January 20, 2015

Cacayorin v. Armed Forces and Police 696 S 311

Cacayorin v. Armed Forces and Police (AFPMBAI)
GR 171298
Facts: AFPMBAI is a mutual benefit association duly organized and existing under Philippine Laws and engaged in the business of developing low-cost housing projects for personnel of the AFP, PNP, Bureau of Fire Protection, Bureau of Jail Management and Penology, and Philippine Coast Guard. Petitioner Cacayorin is a member of AFPMBAI.

                Petitioner applied to purchase a piece of property which the respondent owned through a loan facility. Sps Cacayorin (borrower) and the Rural Bank (lender) executed a Loan and Mortgage Agreement under the auspices of Pag IBIG or HDMF. The Rural Bank granted the loan and in a letter of guaranty informed AFPMBAI to release the proceeds upon the transfer of title in petitioner’s name, and after the registration and annotation of petitioner’s mortgage agreement.

                AFPMBAI executed in petitioner’s favor a DEED OF ABSOLUTE SALE, and a new title was issued in their name, with the corresponding annotation of their mortgage agreement with Rural Bank. Unfortunately, the Pag-IBIG loan facility did not push through and the Rural Bank closed and was placed under receivership by the Philippine Deposit Insurance Corporation (PDIC). Meanwhile, AFPMBAI somehow was able to take possession of petitioners’ loan documents and TCT No. 37017, while petitioners were unable to pay the loan/consideration for the property.

                AFPMBAI made oral and written demands for petitioners to pay the loan/consideration for the property.

                Petitioners filed a Complaint for consignation of loan payment, recovery of title and cancellation of mortgage annotation against AFPMBAI, PDIC and the Register of Deeds of Puerto Princesa City. Petitioners alleged in their Complaint that as a result of the Rural Bank’s closure and PDIC’s claim that their loan papers could not be located, they were left in a quandary as to where they should tender full payment of the loan and how to secure cancellation of the mortgage annotation on TCT No. 37017.
Petitioner- jurisdiction in RTC; AFPMBAI- jurisdiction is in HLURB because of the seller-buyer relationship.

From the above allegations, it appears that the petitioners’ debt is outstanding; that the Rural Bank’s receiver, PDIC, informed petitioners that it has no record of their loan even as it took over the affairs of the Rural Bank, which on
record is the petitioners’ creditor as per the July 4, 1994 Loan and Mortgage Agreement; that one way or another, AFPMBAI came into possession of the loan documents as well as TCT No. 37017; that petitioners are ready to pay the loan in
full; however, under the circumstances, they do not know which of the two – the Rural Bank or AFPMBAI – should receive full payment of the purchase price, or to whom tender of payment must validly be made.
ISSUE: Whether or not this is a case of consignation.

Ruling: Under Article 1256 of the Civil Code, the debtor shall be released from responsibility by the consignation of the thing or sum due, without need of prior tender of payment, when the creditor is absent or unknown, or when he is
incapacitated to receive the payment at the time it is due, or when two or more persons claim the same right to collect, or when the title to the obligation has been lost. Applying Article 1256 to the petitioners’ case as shaped by the allegations in
their Complaint, the Court finds that a case for consignation has been made out, as it now appears that there are two entities which petitioners must deal with in order to fully secure their title to the property: 1) the Rural Bank (through PDIC), which is the apparent creditor under the July 4, 1994 Loan and Mortgage Agreement; and 2) AFPMBAI, which is currently in possession of the loan documents and the certificate of title, and the one making demands upon petitioners to pay.

Clearly, the allegations in the Complaint present a situation where the creditor is unknown, or that two or more entities appear to possess the same right to collect from petitioners. Whatever transpired between the Rural Bank or PDIC and AFPMBAI in respect of petitioners’ loan account, if any, such that AFPMBAI came into possession of the loan documents and TCT No. 37017, it appears that petitioners were not informed thereof, nor made privy thereto.
Indeed, the instant case presents a unique situation where the buyer, through no fault of his own, was able to obtain title to real property in his name even before he could pay the purchase price in full. There appears to be no vitiated consent, nor is there any other impediment to the consummation of their agreement, just as it appears that it would be to the best interests of all parties to the sale that it be once and for all completed and terminated. For this reason, Civil Case No. 3812 should at this juncture be allowed to proceed.

Finally, the lack of prior tender of payment by the petitioners is not fatal to their consignation case. They filed the case for the exact reason that they were at a loss as to which between the two – the Rural Bank or AFPMBAI – was entitled to
such a tender of payment.

On the question of jurisdiction, petitioners’ case should be tried in the Puerto Princesa RTC, and not the HLURB. Consignation is necessarily judicial, as the Civil Code itself provides that consignation shall be made by depositing the
thing or things due at the disposal of judicial authority, thus: Art. 1258. Consignation shall be made by depositing the things due at the disposal of judicial authority, before whom the tender of payment shall be proved, in a proper case, and the announcement of the consignation in other cases.
The consignation having been made, the interested parties shall also be notified thereof. (Emphasis and underscoring supplied)

The above provision clearly precludes consignation in venues other than the courts. Elsewhere, what may be made is a valid tender of payment, but not consignation.

Magat, Jr. v. CA 337 s 298

Magat, Jr. v. CA
GR 124221
Private respondent Santiago A. Guerrero (hereinafter referred to as "Guerrero") was President and Chairman of[4]“Guerrero Transport Services", a single proprietorship.

Sometime in 1972, Guerrero Transport Services won a bid for the operation of a fleet of taxicabs within the Subic Naval Base, in Olongapo. As highest bidder, Guerrero was to "provide radio-controlled taxi service within the U. S. Naval Base, Subic Bay, utilizing as demand requires... 160 operational taxis consisting of four wheel, four-door, four passenger, radio controlled, meter controlled, sedans, not more than one year..."

With the advent of martial law, President Ferdinand E. Marcos issued Letter of Instruction No. 1 (hereinafter referred to as "the LOI"): SEIZURE AND CONTROL OF ALL PRIVATELY OWNED NEWSPAPERS, MAGAZINES, RADIO AND TELEVISION FACILITIES AND ALL OTHERMEDIA OF COMMUNICATION, ordering to take over and control or cause the taking over and control of all such newspapers, magazines, radio and television facilities and all other media of communications, wherever they are, for the duration of the present national emergency, or until otherwise ordered by me or by my duly designated representative.

Pursuant to the LOI, Radio Control Office issued Administrative Circular No.4: SUSPENDING THE ACCEPTANCE AND PROCESSING OF APPLICATIONS FOR RADIO STATION CONSTRUCTION PERMITS AND FOR PERMITS TO OWN AND/OR POSSESS RADIO TRANSMITTERS OR TRANSCEIVERS, suspending the acceptance and processing by the radio control office of applications for radio stations constructions permits and for permits to possess, own, transfer, purchase and sale of radio transmitters and transreceivers as well as manufacturers and dealer’s permits of said equipment.

Guerrero and petitioner Victorino D. Magat (hereinafter referred to as Victorino), as General Manager of Spectrum Electronic Laboratories, a single proprietorship, executed a letter-contract for the purchase of transceivers. Victorino was to deliver the transceivers within 60 to 90 days after receiving notice from Guerrero of the assigned radio frequency, "taking note of Government Regulations."Victorino contacted his Japanese supplier and ordered for the transceivers.

The Navy Exchange Officer confirmed that Guerrero won the bid for the commercial transportation contract. Middle man and broker Aligada advised Victorino Magat "proceed with the order upon receipt of letter of credit.

Guerrero applied for a letter of credit with the Metropolitan Bank and Trust Company.[15] This application was not pursued.

Victorino, represented by his lawyer, Atty. Sinesio S. Vergara, informed Guererro that the order with the Japanese supplier has not been canceled. Should the contract be canceled, the Japanese firm would forfeit 30% of the deposit and charge a cancellation fee in an amount not yet known, Guerrero to bear the loss. Further, should the contract be canceled, Victorino would demand an additional amount equivalent to 10% of the contract price.

Unable to get a letter of credit from the Central Bank due to the refusal of the Philippine government[18] to issue a permit to import the transceivers,[19] Guerrero commenced operation of the taxi cabs within Subic Naval Base, using radio units borrowed from the U.S. government (through the Subic Naval Base authorities).[20] Victorino thus canceled his order with his Japanese supplier. Victorino Magat filed with RTC a complaint for damages arising from breach of contract against Guerrero.

ISSUE/ Ruling:

1.       Whether the contract between Victorino and Guerrero for the purchase of radio transceivers was void.
The contract was valid; the radio transceivers were not contraband. Nowhere in the LOI and Admin. Circular is there an express ban on the importation of transceivers.
"Contraband" generally refers to "any property which is unlawful to produce or possess." It refers to goods which are exported and imported into a country against its laws.
Therefore, possession and importation of the radio transmitters and transceivers was legal provided one had the necessary license for it.[42] Transceivers were not prohibited but merely regulated goods. The LOI and Administrative Circular did not render the transceivers outside the commerce of man. They were valid objects of the contract.[43]
2.       Whether the contract was breached.
The law provides that "[w]hen the service (required by the contract) has become so manifestly beyond the contemplation of the parties, the obligor may also be released therefrom, in whole or in part."[46] Here, Guerrero's inability to secure a letter of credit and to comply with his obligation was a direct consequence of the denial of the permit to import. For this, Guerrero cannot be faulted.
Even if we assume that there was a breach of contract, damages cannot be awarded. Damnum absque injuria. There was no bad faith. No moral damages and no exemplary damages. either can actual damages be awarded. True, indemnification for damages contemplates not only actual loss suffered(damnum emergens) but unrealized profits (lucrum cessans) as well.[53] However, to be entitled to adequate compensation for pecuniary loss, the loss must be actually suffered and duly proved.[54] To recover actual damages, the amount of loss must not only be capable of proof, but must be proven with a reasonable degree of certainty.  The claim must be premised upon competent proof or upon the best evidence obtainable,[55] such as receipts[56] or other documentary proof. There was none.

Philippine National Construction v. CA 272 S 183

Case Digest:
Phil. National Construction v. CA
GR 116896
Petitioner PNC and private respondent entered into a lease contract which term of lease states: This lease shall be for a period of five (5) years, commencing on the date of issuance of the industrial clearance by the Ministry of Human Settlements, renewable for a like or other period at the option of the LESSEE under the same terms and conditions.

Petitioner obtained from the Ministry of Human Settlements a Temporary Use Permit[2] for the proposed rock crushing project.  The permit was to be valid for two years unless sooner revoked by the Ministry.

Private respondents wrote petitioner requesting payment of the first annual rental in the amount ofP240,000 which was due and payable upon the execution of the contract.  They also assured the latter that they had already stopped considering the proposals of other aggregates plants to lease the property because of the existing contract with petitioner.

In its reply-letter, petitioner argued that under paragraph 1 of the lease contract, payment of rental would commence on the date of the issuance of an industrial clearance by the Ministry of Human Settlements, and not from the date of signing of the contract.  It then expressed its intention to terminate the contract, as it had decided to cancel or discontinue with the rock crushing project "due to financial, as well as technical, difficulties."

Petitioner also argued that it was only obligated to pay the amount ofP20,000.00 as rental payments for the one-month period of lease, counted from 07 January 1986 when the Industrial Permit was issued by the Ministry of Human Settlements up to 07 February 1986 when the Notice of Termination was served"[6] on private respondents.

RTC and CA ruled in favor of private respondent ordering petitioner to pay P492,000.
Hence this petition.


1.       Petitioner argues that the Temporary Use Permit is not the industrial clearance referred to in the term of lease, therefore, do not make the obligation effective. ---They are already estopped from claiming that TUP was not the industrial clearance contemplated in the contract. In the letter they sent, it can be gleamed that the petitioner considered the TUP as an industrial clearance; otherwise, petitioner could have simply told the private respondents that its obligation to pay rentals has not yet arisen because the Temporary Use Permit is not the industrial clearance contemplated by them.  Instead, petitioner recognized its obligation to pay rental counted from the date the permit was issued. In another letter conforming to the termination of the contract, it can be deduced from this letter that the suspensive condition - issuance of industrial clearance - has already been fulfilled and that the lease contract has become operative.  Otherwise, petitioner did not have to solicit the conformity of the private respondents to the termination of the contract for the simple reason that no juridical relation was created because of the non-fulfillment of the condition.

2.       Petitioner invokes Article 1266 and the principle of rebus sic stantibus. Whether or not petitioner should be released from the obligatory force  of the contract of lease because the purpose of the contract did not materialize due to unforeseen events and causes beyond its control, i.e., due to abrupt change in political climate after the EDSA Revolution and  financial difficulties. --- Although the contract has the force of law between the parties, Art.1266 is an exception which reads: "The debtor in obligations to do shall also be released when the prestation becomes legally or physically impossible without the fault of the obligor." However, the provision contemplates an obligation ‘to do’ and not an obligation ‘to give’. The obligation to pay rentals[16] or deliver the thing in a contract of lease[17] falls within the prestation “to give”; hence, it is not covered within the scope of Article 1266.  At any rate, the unforeseen event and causes mentioned by petitioner are not the legal or physical impossibilities contemplated in said article Besides, petitioner failed to state specifically the circumstances brought about by “the abrupt change in the political climate in the country” except the alleged prevailing uncertainties in government policies on infrastructure projects.

      The principle of rebus sic stantibus[18] neither fits in with the facts of the case.  Under this theory, the parties stipulate in the light of certain prevailing conditions, and once these conditions cease to exist the contract also ceases to exist.[19] This theory is said to be the basis of Article 1267 of the Civil Code, which provides:
ART. 1267. 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.
This article, which enunciates the doctrine of unforeseen events, is not, however, an absolute application of the principle ofrebus sic stantibus, which would endanger the security of contractual relations.  The parties to the contract must be presumed to have assumed the risks of unfavorable developments.  It is therefore only in absolutely exceptional changes of circumstances that equity demands assistance for the debtor.

                In this case, petitioner PNCC entered into the contract of lease with private respondents with open eyes of the deteriorating conditions of the country. Mere pecuniary inability to fulfill an engagement does not discharge a contractual obligation, nor does it constitute a defense to an action for specific performance.

3.       Whether or not P492,000 award representing the two-year rent was excessive.--- The temporary permit was valid for two years but was automatically revoked because of its non-use within one year from its issuance.  The non-use of the permit and the non-entry into the property subject of the lease contract were both imputable to petitioner and cannot, therefore, be taken advantage of in order to evade or lessen petitioner’s monetary obligation.  The damage or prejudice to private respondents is beyond dispute. They unquestionably suffered pecuniary losses because of their inability to use the leased premises.  Thus, in accordance with Article 1659 of the Civil Code,[25] they are entitled to indemnification for damages; and the award of P492,000 is fair and just under the circumstances of the case.

4.       Whether or not petitioners were denied of due process for not being heard.--- We disagree.  The trial court was in fact liberal in granting several postponements[26] to petitioner before it deemed terminated and waived the presentation of evidence in petitioner’s behalf.

Tuesday, December 9, 2014

Carte Blanche 2014

This post is a little late. But.. but, oh well.

After my Kadayawan Invasion experience (my first ever rave experience), I have now this likeness to party when I can. Of course, not to sacrifice my studies in the process of having fun though. But when I get the chance, I like to chill, party and let loose once in a while. :)

Hence when another rave was to be held on the very same spot (Crocodile Park), my friends and I got a bit excited. I was excited but I had doubts of attending the party at first for some reasons, but eventually, I was persuaded. I'm glad I went though. I enjoyed the night. It was another YOLO kind of night! :)

Live while we're young!

Sunny metallic tattoo! Yes, it's temporary.

Party hard;
Study harder;



Monday, August 18, 2014

Spectrum Kadayawan Invasion Party 2014

I don't really get enticed to go to street parties or raves whenever there are such occasions. It's too crowded for me. I also get paranoid when there are many people. My thoughts don't go for petty unfortunate events like getting robbed or something like that. Mine usually go for things like stampede, fire, bombing, etc. I know, I'm such a negative!

But this year's Kadayawan festival, I decided to make an exemption. I don't know what got into me, but as soon as I heard about the upcoming rave party, Spectrum Kadayawan Invasion, I felt that the party was made for me and that I really have to go. To cut the story short, my friends and I got ourselves Gen Ad tickets for the party.

However, on the day of the party, we Davao Bloggers were invited to spend dinner with the SMART (@smartcares) team at Cafe El Gato at Rancho Palos Verdes near Davao Crocodile Park. We were also given VIP passes for the event (party). I tried looking for someone who might want to use my Gen Ad ticket, but my other friends either are holding one already or are not planning to go. So, I just kept my Gen Ad ticket as a souvenir, instead.

At the party, I met up with my friends (from the Law school) and partied like it was the last day of our lives. Okay, not really, but we sure did partied so hard that we forgot we still got ample of materials to read. We placed aside the thoughts of Law books, recitations and exams for a while and danced to the beat of the music. It was awesome! We felt so NORMAL.

Most of the time, I was with my blogger friends (right after I left the group and jested to be with my blogger friends). I have to say, bloggers sure do know how to groove. Even the "mommy bloggers" came to parteeeey! The VIP area, where we bloggers were at, was not that crowded; just what my antagonistic self wanted. The night was epic. We partied in the rain and got so high (party high).

As some would put it, the Kadayawan Invasion was not a rave at all. It was more of a music festival. A happy music festival where people came for the music churned out by the best DJs in the country (among those were Ace Ramos, Nix Damn P and many more well renowned DJs) . Truly, SPECTRUM (@SpectrumPH) is the best in the business.

Despite the whole "HIPON" issue thing involving Ramon Bautista, which I will not discuss for being so overrated and exaggerated, the party was wild, epic, fun and totally worth it. I had the time of my life. I finally got to untangle my nerves from the stress of being a law student and enjoyed the life of a normal person. I was overwhelmed by the rain, the music and THE PEOPLE I WAS WITH!

A party won't be a party if not for the persons you are with. They define the party.
Good thing I was with pretty good company. :)

I have to commend the skills of SPECTRUM team for really putting up a good show. It was that one of a kind YOLO night! I'm looking forward for the next Kadayawan, or who can tell, I might just find myself chasing down the next party Spectrum throws. HAHA!

To summarize my awesome night, check out our photos of the party below. I got these photos from multiple sources, my friends and more. All rights belong to their respective owners.

'Til the next party!


Angel ♥