Labayen vs Talisay-Silay Milling Co. Inc.

G.R. No. L-29298 (1928)

Ponente: Justice Malcom

Facts: Reynaldo Labayen and Teodoro Labayen are the owners of Dos Hermanos, a hacienda in
Talisay, Negros Occidental. They entered into a contract with Talisay-Silay Milling Company
Incorporated, also called the Central, for the milling of sugar canes from their hacienda. Stipulated
in the contract is the construction of a railroad with three and a half meters right of way and
maintenance of such railroad by the central. However, the central was only able to construct
a railroad reaching hacienda Esmeralda No.2, four kilometers away from hacienda Dos Hermanos.
For a railroad to extend to hacienda Dos Hermanos, the construction would require a gradual
elevation of 4.84% to 7%, would necessitate 26 curves, and would costPhp80,000.00. A civil
engineer testifying on behalf of the defendants alleges that constructing such would be possible, but
it would be very dangerous. This led to an action for damages in the amount of Php 28,620.00 by
the petitioners for the alleged breach of contract to grind sugar canes at the Court of First Instance
of Negros Occidental. The court ruled against the petitioners and on the cross-complaint of the
defendants, condemned the petitioners to pay the sum of Php 12, 114.00.

Issue: Whether or not the action for damages should prosper.

Ruling: No. If the obligor voluntarily prevented the fulfillment of the condition of the obligation,
such condition shall be deemed fulfilled (article 1186 of the New Civil Code). The path of the
railroad has to pass through the haciendas of Esteban de laRama. Since he would not grant
permission to use his land, therefore preventing the compliance of the obligation togrind, the action
cannot prosper.

2. Rodrigo Enriquez Et. Al. vs. Soccoro Ramos G.R. No. L-23616
September 30, 1976

Facts: On November 24, 1958 Enriquez and spouses Dizon sold to Ramos 20 subdivision lots in
Quezon City for the sum of P235,056 of which only P35,056 had been paid. The balance of
P200,000 was to be liquidated within 2 years from the date of the execution of the deed of sale, with
interest at 6% for the 1st year and 12%  thereafter until fully paid. To secure the payment of that
balance, Ramos executed in the same document a deed of mortgage in favor of the vendors on
several parcels of land variously situated in Quezon City, Pampanga and Bulacan. The deed of
mortgage embodies certain stipulations which Ramos invoked. But according to the appellants the
defendant violated the terms of their agreement in the following respects:
The defendant refuse to pay the sum of P200,000 within the stipulated period.
The mortgage on Bulacan property was never registered and,
The realty tax for 1959 on the lots mortgage were not paid by the defendant.
Ramos admits that she has not paid the realty taxes and has not registered the mortgage on Bulacan
property but argues that it was a minor ones and still her obligation to pay the sum of P200,000 has
not arisen as no previous notice and demand for payment has been made and according to her the
road is not completed because the appellants have not yet planted trees nor put up water facilities as
required by the ordinance.
The court held that the non-payment of 1959 realty taxes as well as the non-registration of the
mortgaged Bulacan estate by the defendant were minor matters. On the issue of the completion of
road the appellant adduced the testimonies of 2 witnesses that the road was completed on May 9,
1960 in accordance with the ordinances of Quezon City and there is nothing in Ordinance 2969 that
would indicate that a street may be considered completed with water facilities are built on the
subdivision and these activities are definitely segregable. As to be alleged lack of previous notice
completion and demand for payment, the filling of the case is sufficient notice to the defendant of
the completion of the roads in question and of the appellee’s desire to be paid the purchase price of
the questioned lots.

Issue: Whether or not Ramos should pay her balance to Enriquez and spouses Dizon even though
she is not yet fully satisfied with her demand?

Ruling: Yes, the effect of such demand retroacts to the day of the constitution of the defendant
obligation as it was stated in Art. 1187 provides that “THE EFFECTS OF A CONDITIONAL
OBLIGATION TO GIVE, ONCE THE CONDITION HAS BEEN FULFILLED, SHALL
RETROACT TO THE DAY OF THE CONSTITUTION OF THE OBLIGATION.” her demand on
the road is already considered completed and the filling of the case against her is sufficient notice to
her therefore she is obligated to pay her balance of P200,000 to the appellant’s within 2 years from
the date the roads in question are completed.

3. YHT Realty Corporation, Erlinda Lainez & Anicia Payam vs. The
Court of Appeals & Maurice McLoughlin
G.R. No. 126780

FACTS:
Respondent McLoughlin would always stay at Tropicana Hotel every time he is here in the
Philippines and would rent a safety deposit box. The safety deposit box could only be opened
through the use of 2 keys, one of which is given to the registered guest, and the other remaining in
the possession of the management of the hotel.McLoughlin allegedly placed the following in his
safety deposit box – 2 envelopes containingUS Dollars, one envelope containing Australian Dollars,
Letters, credit cards, bankbooks and acheckbook.On 12 December 1987, before leaving for a brief
trip, McLoughlin took some items from thesafety box which includes the ff: envelope containing
Five Thousand US Dollars (US$5,000.00), theother envelope containing Ten Thousand Australian
Dollars (AUS$10,000.00), his passports and hiscredit cards. The other items were left in the deposit
box. Upon arrival, he found out that a fewdollars were missing and the jewelry he bought was
likewise missing.Eventually, he confronted Lainez and Paiyam who admitted that Tan opened the
safetydeposit box with the key assigned to him. McLoughlin went up to his room where Tan was
stayingand confronted her. Tan admitted that she had stolen McLouglin’s key and was able to open
thesafety deposit box with the assistance of Lopez, Paiyam and Lainez. Lopez also told
McLoughlinthat Tan stole the key assigned to McLouglin while the latter was asleep.McLoughlin
insisted that it must be the hotel who must assume responsibility for the loss hesuffered. Lopez
refused to accept responsibility relying on the conditions for renting the safetydeposit box entitled
“Undertaking For the Use of Safety Deposit Box”

ISSUE:
whether a hotel may evade liability for the loss of items left with it for safekeeping by its guests, by
having these guests execute written waivers holding the establishment or its employees free from
blame for such loss in light of Article 2003 of the Civil Code which voids such waivers

RULING:
NO. 
in case of loss of any item deposited in the safety deposit box, it is inevitable to conclude that the
management had at least a hand in the consummation of the taking unless the reason for the loss is
force majeure
The management contends, however, that McLoughlin, by his act, made its employees believe that
Tan was his spouse for she was always with him most of the time. The evidence on record,
however, is bereft of any showing that McLoughlin introduced Tan to the management as his wife.
Such an inference from the act of McLoughlin will not exculpate the petitioners from liability in the
absence of any showing that he made the management believe that Tan was his wife or was duly
authorized to have access to the safety deposit box. Mere close companionship and intimacy are not
enough to warrant such conclusion considering that what is involved in the instant case is the very
safety of McLoughlin's deposit.
In light of the circumstances surrounding this case, it is undeniable that without the acquiescence of
the employees of Tropicana to the opening of the safety deposit box, the loss of McLoughlin's
money could and should have been avoided.

4. Compañia General De Tabacos De Filipina vs. Araza G.R. No.

FACTS
The plaintiff brought this action in the court below to foreclose a mortgage for 8,000 pesos upon
certain land in the Province of Leyte. The contract send upon was executed on the 11th day of June,
1901. By terms thereof the defendant promised to pay the plaintiff 8,000 pesos as follows: 500
pesos on the 30th of June, 1901, and the remainder at the rate of 100 pesos a month, payable on the
30th day of each month, until the entire 8,000 pesos was paid. The defendant paid 400 pesos and no
more. The suit was commenced on the 12th day of June, 1903.
ISSUE
Whether or not the creditor can recover the said installment and the entire indebtedness.
HELD
There was no provision in the contract by which, upon failure to pay one installment of the debt, the
whole debt should thereupon become at once payable. We are of the opinion that the obligation can
be enforced in this action for only the amount due and payable on the 12th day of June, 1903.
The court below gave no credit for the payment of 400 pesos admitted by the complaint to have
been received by the plaintiff. It is allowed interest upon the entire debt from the 1st day of July,
1901. The contract does not provide for the payment of any interest. There is no provision in it
declaring expressly that the failure to pay when due should put the debtor in default. There was
therefore no default which would make him liable for interest until a demand was made. (Civil
Code, art. 1100; Manresa, Com. on Civil Code, vol 8, p. 56.) The transaction did not constitute a
mercantile loan and article 316 of the Code of Commerce is not applicable. There was no evidence
any demand prior to the presentation of the complaint. The plaintiff is therefore entitled to interest
only from the commencement of the action.

The judgment is set aside and the case is remanded to the court below with directions to determine
the amount due in accordance with the views hereinbefore expressed and to enter judgment for such
amount. No costs will be allowed to either party in this court.

5. NICENCIO TAN QUIOMBING v. COURT OF APPEALS, and Sps.

FACTS:
 On August 30, 1983, Nicencio Tan Quiombing and Dante Biscocho, as the First Party, jointly and
severally bound themselves in a “Construction and Service Agreement” to construct a house for private
respondents Francisco and Manuelita Saligo, as the Second Party, for the contract price of P137,940.00,
which the latter agreed to pay. On October 10, 1984, Quiombing and Manuelita Saligo entered into a
second written agreement under which the latter acknowledged the completion of the house and
undertook to pay the balance of the contract price in the manner prescribed in the said second
agreement. On November 19, 1984, Manuelita Saligo signed a promissory note for P125,363.50
representing the amount still due from her and her husband, payable on or before December 31, 1984, to
Nicencio Tan Quiombing.

On October 9, 1986, Quiombing filed a complaint for recovery of the said amount, plus charges and
interests, which the private respondents had acknowledged and promised to pay but had not, despite
repeated demands. Instead of filing an answer, the defendants moved to dismiss the complaint on
February 4, 1987, contending that Biscocho was an indispensable party and therefore should have been
included as a co-plaintiff.

ISSUE:
Whether or not Biscocho is an indispensable party in the case.