Fernandez vs. Court of Appeals GR No. L-80231. October 18, 1988 case digest

Concept: 1370

Facts:

·         The controversy here revolves around the appropriate reading of a clause in a lease contract that was executed about fifteen years ago.

·         July 31, 1973. Miguel Tajangco (respondent and lessor) and Celso Fernandez (petitioner and lessee) entered into a ten-year Contract of Lease over a piece of land situated along Kahilum Street, Pandacan, Manila, where Fernandez would put up the then proposed New Zamora Market. The parties agreed that the lease, which was scheduled to end on 1 July 1983, would be "renewable for another ten (10) years at the option of both parties under such terms, conditions and rental reasonable at that time" and that, upon expiration of the lease, whatever improvements were then existing thereon should automatically belong to Miguel without having to pay Fernandez.

·         Before the term ended, asshole Miguel said to Fernandez that he is no longer willing to renew the contract. Fernandez being a hardass, replied that he wants to renew the contract so he could recover the expenses he had made. Miguel not giving in, replied through his lawyer, advised that Miguel could not accept Fernandez's unilateral action to renew the lease because, under the contract, any renewal or extension thereof was possible only "at the option of both parties.

·         June 12, 1983. Fernandez filed an action against Miguel. He said that he was entitled to renew the lease contract, under paragraph 3 Section 2 thereof, for another ten (10) years, which paragraph in the contract should be construed in a liberal manner and with justice. In his prayer, he sought to compel Miguel to renew the lease agreement for another term, or asked the court to consider the original contract as renewed for another ten (10) years or to fix another period for the renewal contract.

·         Miguel the asshole replied that judicial interpretation is not needed, the contract is so simple worded that even Homer Simpson can understand it.

·         The trial court held its decision in favor of Fernandez. Miguel, being an asshole and won’t accept defeat, appealed with the CA. The CA reversed the decision of the trial court. BOOM! HEIRARCHY YOW!

Issue:  W/ON the condition of the contract is clear or not.

Held: Shit is clear. The CA said that the contract language as comprising, not technical terms or terms of legal art, but rather just plain and ordinary words. SC affirmed the decision of the CA

Provincial Sheriff of Pampanga vs. Court of Appeals GR No. L-25152. February 26, 1968 case digest

Concept:  Art. 1387

Facts:

·         An action for recovery of a sum of money was filed on June 4, 1960, by Cirilo D. Cabral and Zacarias Perez (both are the petitioners) against Elpidio Agustin and Manuel Flores in the Court of First Instance of Bulacan.

·         Elpidio has a business, the cleverly titled  “Modern Furniture Store” (wow, such creative, much original, very clever).  On January 9, 1961 a fire broke out, shit destroyed Elpidio’s store.  On January 12, 1961 Elpidio surrendered his license to operate to the municipal treasury.

·         Not long thereafter, Elpidio’s brother, Marciano (respondent), erected a store in the same site where Elpidio’s store burned down, Marciano named his store *wait for it* “MODERN FURNITURE STORE” (really dude? Same shit again?). On February 20, 1961, for business purposes, Marciano secured a new license and privilege tax to operate the store. And on the same date, Elpidio verbally transferred "Modern Furniture Store" to his brother Marciano.

·         July 13, 1961. The Court of First Instance of Bulacan, in the aforementioned case, rendered judgment against Elpidio (who had confessed judgment) and Manuel Flores jointly and severally, for P10,685.15 plus interest and P500.00 attorney's fees.

·         CA affirmed the decision.

·         May 3, 1963. The Provincial Sheriff levied some of the pieces of furniture found in "Modern Furniture Store." Stating that said properties do not belong to Elpidio Agustin but to him, Marciano filed a third party claim with the sheriff. An indemnity bond, however, was posted by the judgment creditors (Cabral and Perez) in the sheriff's favor, so he issued notice that the properties levied upon will be sold at public auction on May 18, 1963.

·         May 17, 1963. Marciano filed in the Court of First Instance of Pampanga the present action, against judgment creditors Cabral and Perez and the sheriff, to be declared owner of the pieces of furniture levied upon, with preliminary injunction and damages. A writ of preliminary injunction was issued enjoining the sheriff from proceeding with the sale.

·         The Court of First Instance dismissed the complaint but the CA reversed the decision of the lower court and claimed that Marciano is the owner.

Issue: W/ON Article 1387 of the Civil Code on presumption of fraud apply?

Held:

No. The provision in question applies only when there has in fact been an alienation or transfer, whether gratuitously or by onerous title. In the present case, the finding of the Court of Appeals, which is factual and therefore not proper for Us to alter in this appeal, is that the store of Marciano Agustin is a new and different one from that of Elpidio Agustin. True, Marciano Agustin testified that "Modern Furniture Store" was transferred, verbally to him by Elpidio Agustin on February 20, 1961. As the Court of Appeals found, however, this referred to the business name and style, not to the store or its contents, as the store and contents were completely new, coming from the capital of Marciano Agustin, whereas Elpidio's store and its contents of furniture were destroyed totally by the fire of January 9, 1961.

GAW vs INTERMEDIATE APPELLATE COURT G.R. No. 70451. March 24, 1993 case Digest

Concept: 1293

Facts:

·         Henry Gaw , a business man, got his trading firm appointed as one of the exclusive dealers of white cement of the Prime White Cement Corporation (PWCC). Under the agreement, Gaw would deposit the amount of P200,000 to be repaid or returned" to the dealer under a scheme set forth in the same contract, and that the dealer would increase its allocation to 6,500 bags a month and "increase its loan" to PWCC to Five Hundred Thousand Pesos (P500,000.00)

·         February 2, 1979. Gaw entered into a marketing agreement with Foundation Commercial through Uy Diet Tan.

·         Tan issued a check in the amount of P250,000 payable to PWCC but PWCC refused to accept fearing that it might violate their agreement with Gaw.

·         Gaw, to save his option to increase his monthly allocation, entered into a marketing agreement with Mandee Commercial.

·         March 5, 1979.Tan filed a case against Gaw in the Court of First Instance of Rizal. Tan alleged that when he tried to deposit the money to PWCC, the auditor of PWCC said that he should write the check under the name of Gaw. Tan praying that Gaw should honor his contract and pay him for moral damages, litigation costs and atty.’s fees. Tan also filed a restraining order against Gaw to prevent Gaw from disposing the cement bags.

·         Gaw filed a motion to dismiss on the ground of lack of cause but Tan filed an opposition.

·         July 16, 1979. Tan filed a motion to withdraw, claiming that the litigation is giving him chest pains thus might affect his heart. The case was dismissed.

·         Gaw filed a case against Tan on the ground that the case against him caused him to lose profit. Court held in favor of Gaw, thus ordering Tan to pay Gaw. Tan filed a motion for reconsideration but was denied.

·         Tan appealed in the Immediate Appellate Court. The said court reversed the decision of the lower court and ordered Gaw to pay P100,000 to Tan for actual damages. Gaw filed a motion for reconsideration but was denied.

Issue:

W/ON there is novation if PWCC accepted the payment from Tan.

Held:

No. Because in this case there is a co-terminus marketing agreement present. It is axiomatic that novation is never presumed. It must be explicitly stated in the contract and there must be a manifest

 incompatibility between the old and the new obligation in every aspect. The fact that the two agreements are co-terminous with each other does not imply that a new obligation had arisen when the marketing agreement was signed, thus displacing the dealership contract. Not only was Gaw not released from complying with the terms and conditions of the dealership agreement but he was, in a sense, already implementing the latter.

DKC HOLDINGS CORPORATION vs COURT OF APPEALS G.R. No. 118248. April 5, 2000 case digest

Concept: Art. 1311

Facts

·         The subject of the controversy is a 14,021 square meter parcel of land located in Malinta, Valenzuela, Metro Manila which was originally owned by private respondent Victor U. Bartolome’s deceased mother, Encarnacion Bartolome, under Transfer Certificate of Title No. B-37615 of the Register of Deeds of Metro Manila, District III. This lot was in front of one of the textile plants of petitioner and, as such, was seen by the latter as a potential warehouse site.

·         March 16, 1988. DKC entered a contract of lease with option to buy with Encarnacion Bartolome (Victor’s deceased mom).  DKC was given the option to lease or lease with purchase the subject land, which option must be exercised within a period of two years counted from the signing of the Contract. In turn, DKC undertook to pay P3,000.00 a month as consideration for the reservation of its option. Within the two-year period, DKC shall serve formal written notice upon the lessor Encarnacion Bartolome of its desire to exercise its option. The contract also provided that in case DKC chose to lease the property, it may take actual possession of the premises. In such an event, the lease shall be for a period of six years, renewable for another six years, and the monthly rental fee shall be P15,000.00 for the first six years and P18,000.00 for the next six years, in case of renewal.

·         DKC regularly paid Encarnacion until her death in January 1990. DKC then directed its payment to the son of Enacarnacion who is the sole heir but Victor (Encarnacion’s son) refused the payment.

·         January 10, 1990. Victor executed an affidavit of Self Adjudication all over her deceased mom’s properties, including the subject lot. Victor the dick then cancelled the deed of transfer of DKC and then issued a transfer certificate under his name, what a dick.

·         March 14, 1990. DKC sent a notice to Victor the royal douche, stating that they are going to exercise their option to lease, tendering the amount of P15,000 as rent. Victor the douche, being a dick as he is, refused payment.

·         DKC then opened a saving account with the China Banking Corp. under the name of Victor and deposited the P15,000 as rental fee while also adding another P6000 for reservation fees

·         DKC also tried to register and annotate the Contract on the title of Victor the dick to the property. Although respondent Register of Deeds accepted the required fees, he nevertheless refused to register or annotate the same or even enter it in the day book or primary register.

·         April 23, 1990. DKC filed a complaint for specific performance and damages against Victor and the Register of Deeds. DKC prayed for the surrender and delivery of possession of the subject land in accordance with the Contract terms; the surrender of title for registration and annotation thereon of the Contract; and the payment of P500,000.00 as actual damages, P500,000.00 as moral damages, P500,000.00 as exemplary damages and P300,000.00 as attorney’s fees.

·         During the May of 1990, some guy named Andres Lonzano filed a motion for intervention with motion to dismiss for he was a tenant-tiller of the subject property, dude is under the Comprehensive Agrarian Reform Law, the motion was denied by the court, poor guy.

·         The lower court then rendered its decision, it dismissed the complaint and ordered DKC to pay Victor for P30,000 as attorney’s fee. On appeal, the CA affirmed the decision of the lower court

Issue: W/ON the Contract of Lease with Option to Buy entered into by the late Encarnacion Bartolome with petitioner was terminated upon her death or whether it binds her sole heir, Victor, even after her demise.

Held: No. Article 1311 of the Civil Code and jurisprudence, Victor is bound by the subject Contract of Lease with Option to buy executed by his predecessor-in-interest. It is futile for Victor to insist that he is not a party to the contract because of the clear provision of Article 1311 of the Civil Code. Indeed, being an heir of Encarnacion, there  is privity of interest between him and his deceased mother. He only succeeds to what rights his mother had and what is valid and binding against her is also valid and binding as against him. The general rule, therefore, is that heirs are bound by contracts entered into by their predecessors-in-interest except when the rights and obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3) provision of law.