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Ansay v. DBP
GR L-13667, April 29, 1960 [
Per C.J. Paras

WHAT HAVE WE LEARNED ABOUT THE TOPIC?

Article 1423 of the New Civil Code classifies obligations into civil or natural. “Civil obligations are right of action to compel their
performance. Natural obligations, not being based on positive law but based on equity and natural law, which do not grant a right of action
to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or
rendered by reason thereof”. It is thus readily seen that an element of natural obligation before it can be cognizable by the court is
voluntary fulfillment by the obligor.

WHAT DOES THE CASE TEACH US?

ISSUE: Is the grant of Christmas bonus for the years 1954 and 1955 demandable based on natural or moral obligation?
FACTS: Ansay et al. filed against NDC a complaint praying for a 20% Christmas bonus for the years 1954 and 1955. The trial court
dismissed the complaint ratiocinating that a bonus is an act of liberality and the court takes it that it is not within its judicial powers to
command respondents to be liberal and that Ansay et al. admitted that NDC is not under legal duty to give such bonus and that the court
has no power to compel a party to comply with a moral obligation. Ansay et al. appealed and argued that there exists a cause of action in
their complaint because their claim rests on moral grounds or what in brief is defined by law as a natural obligation.
RULING:
NO. Article 1423 of the New Civil Code classifies obligations into civil or natural. "Civil obligations are a right of action to compel their
performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce
their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by
reason thereof".
It is thus readily seen that an element of natural obligation before it can be cognizable by the court is voluntary fulfillment by the obligo r.
Certainly retention can be ordered but only after there has been voluntary performance. But here there has been no voluntary performance.
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In fact, the court cannot order the performance. In the case of Philippine Education Co. vs. CIR and the Union of Philippine Education
Co., Employees: From the legal point of view a bonus is not a demandable and enforceable obligation. It is so when it is made a part of the
wage or salary compensation.
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CBK Power v. CIR
GR 198729-30, January 15, 2014
Per C.J. Sereno

WHAT HAVE WE LEARNED ABOUT THE TOPIC?

ART. 1162 the term quasi-delict refers to all of those obligations which do not arise from law, contracts, quasi-contracts or criminal
offenses. The civil code defined it as the fault or negligence of a person, who by his act or omission connected or unconnected with, but
independent from, any contractual relation, causes damage to another person.

WHAT DOES THE CASE TEACH US?

ISSUE:
Whether or not BIR Ruling No. DA-489-03 is a general interpretative rule applicable to all taxpayers or a specific ruling applicable only to
a particular taxpayer.
FACTS:
CBK Power is engaged, among others, in the operation, maintenance, and management of the Kalayaan II pumped-storage hydroelectric
power plant, the new Caliraya Spillway, Caliraya, Botocan; and the Kalayaan I hydroelectric power plants and their related facilities
located in the Province of Laguna. On 29 December 2004, petitioner filed an Application for VAT Zero-Rate with the Bureau of Internal
Revenue (BIR) in accordance with Section 108(B)(3) of the National Internal Revenue Code (NIRC) of 1997, as amended. The application
was duly approved by the BIR. Thus, petitioner ’s sale of electricity to the NPC from 1 January 2005 to 31 October 2005 was declared to
be entitled to the benefit of effectively zero-rated value added tax (VAT). The crux of the controversy arose from the proper application of
the prescriptive periods set forth in Section 112 of the NIRC of 1997, as amended, and the interpretation of the applicable jurisprudence.
RULING:
First, there exists a binding relation between petitioner and the CIR, the former being a taxpayer obligated to pay VAT.
Second, the payment of input tax was not made through mistake, since petitioner was legally obligated to pay for that liability. The
entitlement to a refund or credit of excess input tax is solely based on the distinctive nature of the VAT system. At the time of payment of
the input VAT, the amount paid was correct and proper.
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Finally, equity, which has been aptly described as "a justice outside legality," is applied only in the absence of, and never against,
statutory law or judicial rules of procedure. Section 112 is a positive rule that should preempt and prevail over all abstract arguments based
only on equity. Well-settled is the rule that tax refunds or credits, just like tax exemptions, are strictly construed against the taxpayer. The
burden is on the taxpayer to show strict compliance with the conditions for the grant of the tax refund or credit.
Also devoid of merit is the applicability of the principle of solutio indebiti to the present case. According to this principle, if something is
received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises. In that situation,
a creditor-debtor relationship is created under a quasi-contract, whereby the payor becomes the creditor who then has the right to demand
the return of payment made by mistake, and the person who has no right to receive the payment becomes obligated to return it. The quasi-
contract of solutio indebiti is based on the ancient principle that no one shall enrich oneself unjustly at the expense of another.
There is solutio indebiti when:
(1) Payment is made when there exists no binding relation between the payor, who has no duty to pay, and the person who received the
payment; and
(2) Payment is made through mistake, and not through liberality or some other cause.
Though the principle of solutio indebiti may be applicable to some instances of claims for a refund, the elements thereof are wanting in this
case.

Gutierrez v. Gutierrez
GR 34840, September 23, 1931
Per J. Malcolm

WHAT HAVE WE LEARNED ABOUT THE TOPIC?

Civil liability co-exists with criminal responsibility in negligence, there are two option, culpa criminal under Article 100 of RPC and an
action for recovery of damages based on Culpa aquiliana under Article 2177 of Civil code. The two concepts of faults are so distinct from
each other that exoneration from one does not result in exoneration from the other. They can be prosecuted separately.
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ISSUE:
How should civil liability be imposed upon the parties in the present case?
FACTS:
On February 2, 1930, a passenger truck and an automobile of private ownership collided while attempting to pass each other on a bridge.
The truck was driven by Abelardo Velasco, and was owned by Saturnine Cortez. The automobile was being operated by Bonifacio
Gutierrez, a guy,18 years of age, and was owned by his parents, Mr. and Mrs. Manuel Gutierrez. At the time of the collision, the father was
not in the car, but the mother, together with several other members of the Gutierrez family were accommodated therein. A passenger in the
autobus, by the name of Narciso Gutierrez, was en route from San Pablo, Laguna, to Manila. The collision between the bus and the
automobile resulted in Narciso Gutierrez suffering a fractured right leg which required medical attendance for a considerable period of
time.
RULING: Bonifacio Gutierrez’s obligation arises from culpa aquiliana while Saturnino Cortez’s and his driver Abelardo Velasco’s
obligation rise from culpa contractual. Bonifacio was an incompetent driver, that he was driving at an excessive rate of speed, and that, on
approaching the bridge and the truck, he lost his head and so contributed by his negligence to the accident. The guaranty given by the father
at the time the son was granted a license to operate motor vehicles made the father responsible for the acts of his son. Here, pursuant to the
provisions of Art. 1903 of the Civil Code, the father alone and not the minor or the mother would be liable for the damages caused by the
minor.The liability of Saturnino Cortez, the owner of the truck, and his chauffeur Abelardo Velasco rests on a different basis, namely, that
of contract.
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Philippine Banking v. Lui She
GR L-17587, September 12, 1967
Per J. Castro

WHAT HAVE WE LEARNED ABOUT THE TOPIC?

ART.1196 of the Civil code when a period is designated for the performance or fulfillment of an obligation, it is presumed to have been
established for the benefit of both creditor and debtor. The creditor cannot demand the performance of the obligation before the expiration
of the designated period, neither can the debtor perform the obligation before the expiration of such period.

WHAT DOES THE CASE TEACH US?

ISSUE: Whether or not the provisions of contract makes it invalid?
FACTS: Justina Santos executed on a contract of lease in favor of Wong, covering the portion then already leased to him and another
portion fronting Florentino Torres street. The lease was for 50 years, although the lessee was given the right to withdraw at any time from
the agreement.
On December 21 she executed another contract giving Wong the option to buy the leased premises for P120,000, payable within ten years
at a monthly installment of P1,000. The option, written in Tagalog, imposed on him the obligation to pay for the food of the dogs and the
salaries of the maids in her household, the charge not to exceed P1,800 a month. It appears, however, that this application for naturalization
was withdrawn when it was discovered that he was not a resident of Rizal. On October 28, 1958 she filed a petition to adopt him and his
children on the erroneous belief that adoption would confer on them Philippine citizenship. The error was discovered and the proceedings
were abandoned. In two wills executed on August 24 and 29, 1959, she bade her legatees to respect the contracts she had entered into with
Wong, but in a codicil of a later date (November 4, 1959) she appears to have a change of heart. Claiming that the various contracts were
made by her because of machinations and inducements practiced by him, she now directed her executor to secure the annulment of the
contracts.
HELD: No, the contracts show nothing that is necessarily illegal, but considered collectively. So is an option giving an alien the right to
buy real property on condition that he is granted Philippine citizenship.
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But if an alien is given not only a lease of, but also an option to buy, a piece of land, by virtue of which the Filipino owner cannot sell or
otherwise dispose of his property, this to last for 50 years, then it becomes clear that the arrangement is a virtual transfer of ownership
whereby the owner divests himself in stages not only of the right to enjoy the land but also of the right to dispose of it— rights the sum
total of which make up ownership. Also at any rate, even if no term had been fixed in the agreement, this case would at most justify the
fixing of a period but not the annulment of the contract.

The case of Singson Encarnacion v. Baldomar cannot be cited in support of the claim of want of mutuality, because of a difference in
factual setting. In that case, the lessees argued that they could occupy the premises as long as they paid the rent. This is of course
untenable, for as this Court said, "If this defense were to be allowed, so long as defendants elected to continue the lease by continuing the
payment of the rentals, the owner would never be able to discontinue it; conversely, although the owner should desire the lease to continue
the lessees could effectively thwart his purpose if they should prefer to terminate the contract by the simple expedient of stopping payment
of the rentals." Here, in contrast, the right of the lessee to continue the lease or to terminate it is so circumscribed by the term of the
contract that it cannot be said that the continuance of the lease depends upon his will. At any rate, even if no term had been fixed in the
agreement, this case would at most justify the fixing of a period but not the annulment of the contract.
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PNB v. Independent Planters
GR L-11311, May 28, 1958
Per J. Ortega

WHAT HAVE WE LEARNED ABOUT THE TOPIC?

Article 1216 grants the creditor the substantive right to seek satisfaction of his credit from one, some or all of his solidary debtors for the
prosecution of his interest. The choice is undoubtedly left to the solidary creditor to determine against whom he will enforce collection and
in case of death of one of the solidary debtor the creditor may if he chooses proceed against the surviving solidary debtor without necessity
of filing claim in the estate of the deceased debtors.

Issue:
WON the action for collection of a sum of money based on contract against all the solidary debtors, the death of one defendant deprives the
court of jurisdiction to proceed with the case against the surviving defendants?
Facts:
PNB assails the order of the dismissal of the lower court dismissing its complaint against several solidary debtors on the ground that one of
the defendants died during the pendency of the case and therefore the complaint being a money claim based on contract should be
prosecuted in the estate and intestate proceeding for the settlement of the estate of deceased.
HELD:
No. It is now settled that the quoted Article 1216 grants the creditor the substantive right to seek satisfaction of his credit from one, some or
all of his solidary debtors, as he deems fit or convenient for the protection of his interests; and if, after instituting a collection suit based on
contract against some or all of them and, during its pendency, one of the defendants dies, the court retains jurisdiction to continue the
proceedings and decide the case in respect of the surviving defendants. Article 1216 of the New Civil Code would, in effect, be repealed
since under the Rules of Court, petitioner has no choice but to proceed against the estate of Manuel Barredo only. Obviously, this provision
diminishes the Bank's right under the New Civil, Code to proceed against any one, some or all of the solidary debtors. Such a construction
is not sanctioned by the principle, which is too well settled to require citation, that a substantive law cannot be amended by a procedural
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rule. Otherwise stared, Section 6, Rule 86 of the Revised Rules of Court cannot be made to prevail over Article 1216 of the New Civil
Code, the former being merely procedural, while the latter, substantive.
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Pamintuan v. CA
GR L-26339, December 14, 1979
Per J. Aquino

WHAT HAVE WE LEARNED FROM THE TOPIC?

In case of fraud the difference between the proven damages and the stipulated penalty may be recovered. The proven damages supersede
the stipulated liquidated damages. The second sentence of article 1226 itself provides that I nevertheless, damages shall be paid if the
obligor ... is guilty of fraud in the fulfillment of the obligation". "Responsibility arising from fraud is demandable in all obligations" (Art.
1171, Civil Code). "In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for an damages which may be
reasonably attributed to the non-performance of the obligation"

ISSUE:
WON Pamintuan can be made liable only for liquidated damages and on account of the rule that the penalty shall substitute the indemnity
for damages?
FACTS:
This is about the recovery compensatory, damages of breach of a contract of sale in addition to the liquidated damages. Pamintuan and Yu
Ping Kun were business partners. Pamintuan was a license barter who export corn flakes to Japan in exchange of plastic sheetings. Yu Ping
Kun complains in violation of their contract because although plastic sheetings were delivered on the proper time and place. The quality of
materials and overpricing the same violates their agreement.
HELD:
No, for actual damages only. Pamintuan relies on the rule that a penalty and liquidated damages are the same ,that "in obligations with a
penal clause, the penalty shall substitute the indemnity for damages and the payment of interests in case of non-compliance, if there is no
stipulation to the contrary and, it is argued, there is no such stipulation to the contrary in this case and that "liquidated damages are those
agreed upon by the parties to a contract, to be paid in case of breach thereof.” After a conscientious consideration of the facts of the case, as
found by Court of Appeals and the trial court, and after reflecting on the tenor of the stipulation for liquidated damages herein, the true
nature of which is not easy to categorize, we further hold that justice would be adequately done in this case by allowing Yu Ping Kun Co.,
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Inc. to recover only the actual damages proven and not to award to it the stipulated liquidated damages of ten thousand pesos for any
breach of the contract. The proven damages supersede the stipulated liquidated damages.
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Rivera v. Spouses Chua
GR 184458, January 14, 2015
Per J. Perez

WHAT HAVE WE LEARNED FROM THE TOPIC?

Article 1169 of NCC explicitly provides that the demand by the creditor shall not be necessary in order that delay may exist when the
obligation or the law expressly so declare. It is not sufficient that the law or obligation fixes a date for performance; it must further state
expressly that after the period lapses, default will commence.

ISSUE:
Whether or not a demand from spouses Chua is needed to make Rivera liable.
FACTS:
Rivera and Spouses Chua were friends and kumpadres. Rivera obtained a loan from the Spouses Chua evidenced by a Promissory Note
agreeing to pay the amount of Php120,000.00 on December 31, 1995 and a 5% interest monthly from the date of default until the entire
obligation is fully paid for. Three years from the date of payment stipulated in the promissory note, Rivera issued and delivered to Spouses
Chua two (2) checks but upon presentment for payment, the two checks were dishonored for the reason “account closed.” The Spouses
Chua alleged that they have repeatedly demanded payment from Rivera to no avail. On the other hand, Rivera claimed forgery of the
Promissory Note and denied his indebtedness thereunder and that there was no demand for payment of the amount of P120,000.00 prior to
the encashment of the checks.
HELD:
No, a demand from spouses Chua is not needed to make Rivera liable. Here, the clause in the Promissory Note expressly requires Rivera to
pay a 5% monthly interest from the “date of default” until the entire obligation is fully paid for. Rivera and Spouses Chua evidently agreed
that the maturity of the obligation at a date certain, 31 December 1995, will give rise to the obligation to pay interest. Even without the
demand from Spouses Chua, it is understood that Rivera should perform in the date stated in the obligation, therefore making her liable.
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Sanico v. Colipano
GR 209969, September 27, 2017
Per J. Caguioa

WHAT HAVE WE LEARNED FROM THE TOPIC?

Article 1170 of the Civil Code provides that those who in the performance of their obligations are guilty of fraud, negligence, or delay, and
those who in any manner contravene the tenor thereof, are liable for damages. Contravening the tenor of the obligation includes any illicit
act or omission which impairs the strict and faithful fulfillment of the obligation and every kind of defective performance.

Issue:
Whether or not Sanico is liable for damages?
Facts:
Colipano and her daughter were paying passengers in the jeepney operated by Sanico, which was driven by Castro. Colipano was made to
sit on an empty beer case at the edge of the rear entrance/exit of the jeepney with her sleeping child on her lap. At an uphill incline, the
jeepney slid backwards and Colipano pushed both her feet against the step board but the step board was wet and her left foot slipped and
got crushed between the step board and a coconut tree which the jeepney bumped. Colipano’s leg was badly injured and was eventually
amputated.
RULING:
Here, making Colipano sit on the empty beer case was a clear showing of how Sanico contravened the tenor of his obligation to safety
transport Colipano from the place of departure to the place of destination as far as human care and foresight can provide. Therefore, Sanico
is liable for damages. Since the cause of action is based on a breach of a contract of carriage, the liability of Sanico is direct as the contract
is between him and Colipano. Castro, being merely the driver of Sanico's jeepney, cannot be made liable as he is not a party to the contract
of carriage. Since Castro was not a party to the contract of carriage, Colipano had no cause of action against him and the pomplaint against
him should be dismissed. Although he was driving the jeepney, he was a mere employee of Sanico, who was the operator and owner of the
jeepney. The obligation to carry Colipano safely to her destination was with Sanico. In fact, the elements of a contract of carriage existeid
between Colipano and Sanico: consent, as shown when Castro, as employee of Sanico, accepted Colipano as a passenger when he allowed
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Colipano to board the jeepney, and as to Colipano, when she boarded the jeepney;  cause or consideration, when Colipano, for her part,
paid her fare; and, object, the transportation of Colipano from the place of departure to the place of destination.