Oblicon Case Digests

1. L&L Lawrence Footwear, Inc. vs. PCI Leasing and Finance Corp., 468 SCRA 393.
2. Miailhe vs. CA, 354 SCRA 675
3. Loyola vs. CA, 326 SCRA 285
4. Metropolitan Waterworks And Sewerage System (Mwss), vs.�Court Of Appeals, et
al., , G.R. No. 126000 October 7, 1998
5. Julian Francisco, Et Al. vs. Pastor Herrera, G.R. No. 139982, Nov. 21, 2002
6. First Philippine Holdings Corporation vs. Trans Middle East (Phils.) Equities Inc.,
G.R. No. 179505, December 4, 2009
7. China Banking Corporation vs. CA, 327 SCRA 378
I. unable to present evidence in support
of a valid defense.
G.R. NO. 160531, August 30, 2005
 Surety valid; Petitioner Sae Chae Lee
L & L LAWRENCE FOOTWEAR, INC., SAE CHAE agreed to be solidarily liable for the
LEE and JOHN DOE, Petitioners, v. PCI LEASING obligations incurred by petitioner
AND FINANCE CORPORATION, Respondent. company under the Lease Agreement it
had entered into with respondent.
Facts: Likewise, the terms and conditions of
the Lease Agreement are clear and
 Respondent, PCI Leasing and Finance
leave no doubt upon the intention of
Corp. purchased various shoe making
the parties.
equipment
 The petition is denied. Therefore,
 L & L entered into several lease
respondent’s right to the possession of
contracts embodied in numerous lease
the replevined properties as well as its
schedules where the various shoe
entitlement to the possession of other
making equipment are the leased
properties subject matter of the lease
property.
agreement is affirmed.
 Sae Chae Lee, the former President of L
& L and the surety of petitioner
company, was made to sign a
Continuing Guaranty of Lease
Obligations
 L & L failed to pay the obligation which
caused the respondent to file a
complaint of recovery of sum of money
and/or the leased property with the
prayer of issuance of writ of replevin.

Issues:

 Whether or not the petitioners are

automatically entitled for a relief by
reason of declaration of default.
 Whether or not a surety can be held
liable for an obligation that is not
specified in the surety agreement.

Rulings:

 No automatic relief; Petitioners have

waived their opportunity to contest the
evidence presented by respondents and
II.  Whether or not petitioner’s
extrajudicial demands did not interrupt
G.R. No. 108991, March 20, 2001
prescription in regards to Article 1155
WILLIAM ALAIN MIAILHE, petitioner, vs. COURT of the Civil Code.
OF APPEALS and REPUBLIC OF THE
Rulings:
PHILIPPINES, respondents.
 The reckoning period for prescription
Facts:
would be that pertaining to an action
 Petitioners were the former registered for the annulment of contract; that is,
owners of three parcels of land located four years from the time the defect in
at J.P. Laurel St., San Miguel, Manila the consent ceases. In this case, it was
with an aggregate area of 5,574.30 already four years and 1 month since
square meters, and a one (1) storey the action for annulment of the sale
building erected thereon. prescribed.
 On August 1, 1976, during the height of  Any extrajudicial demand he made did
the martial law regime, the late not or will not interrupt the prescription
President Ferdinand Marcos, through of the action for annulment of the
his armed forces, forcibly and contract of sale because there was no
unlawfully took possession of the obligation in existence. Although it was
aforementioned properties from allegedly voidable, the contract of sale
petitioners. was binding unless it was annulled by a
 On August 1977, through threats and proper action in court. Therefore,
intimidation from defendant Republic of Article 1155 of the Civil Code cannot be
the Philippines, were coerced into applied.
selling the properties to DBP and in turn  The action for the annulment of the
sold the property to Republic of the contract has already prescribed.
Philippines. Therefore, petition is denied.
 On February 24, 1986, petitioners made
repeated extrajudicial demands for the
return and reconveyance of subject
properties.
 On March 23, 1990, petitioners filed a
Complaint for Annulment of Sale,
Reconveyance and Damages against
Republic of the Philippines and
Development Bank of the Philippines.

Issues:

 Whether or not the actions for the

annulment of contracts had prescribed.
III. the purpose of annulling the sale and
cancel the Transfer Certificate of Title.
G.R. No. 115734, February 23, 2000
 Before there was judgment on the
RUBEN LOYOLA, CANDELARIA LOYOLA, preceding case, Victorina died on
LORENZO LOYOLA, FLORA LOYOLA, NICANDRO October 18, 1989. Cecilia, who is
LOYOLA, ROSARIO LOYOLA, TERESITA LOYOLA unmarried and childless, died a year
and VICENTE LOYOLA, petitioners, vs. THE later. They were substituted as
HONORABLE COURT OF APPEALS, NIEVES, petitioners in this case.
ROMANA, ROMUALDO, GUILLERMO, LUCIA,
Issues:
PURIFICACION, ANGELES, ROBERTO, ESTRELLA,
all surnamed ZARRAGA and THE HEIRS OF JOSE  Whether or not the contract of deed of
ZARRAGA, namely AURORA, MARITA, JOSE, absolute sale is simulated and therefore
RONALDO, VICTOR, LAURIANO, and ARIEL, all null and void.
surnamed ZARRAGA, respondent
Rulings:
Facts:
 The requisites for simulation are: (1) an
 The land in dispute is originally owned outward declaration of will different
in common by siblings Mariano and from the will of the parties; (2) the false
Gaudencia Zarraga, who inherited the appearance must have been intended
property from their father. by mutual agreement; and (3) the
 Romualdo Zarraga filed a case against purpose is to deceive third persons.
Gaudencia Zarraga (Civil Case No. B- However, the requisites for simulation
1094). The defendants of this case are of contracts are not satisfied.
the private respondents in the instant  For undue influence to be established
case. to justify the cancellation of an
 On August 24, 1980, three years before instrument, three elements must be
her death, Gaudencia sold her share in present: (a) a person who can be
the inherited property to the private influenced; (b) the fact that improper
respondents evidenced by a notarized influence was exerted; (c) submission to
document entitled “Bilihang Tuluyan ng the overwhelming effect of such
Kalahati (1/2) ng Isang Lagay na Lupa”. unlawful conduct. In this case, the
 On February 16, 1984, the sheriff in the requisites of undue influence are not
previous case (Civil Case No. B-1094) satisfied.
executed the corresponding deed of  The petition for the annulment of the
reconveyance to Gaudencia. However, contract of deed of absolute sale is
the Registry of Deeds of Laguna, denied.
Calamba issued a title in favor of the
private respondents.
 Victorina Zarraga vda. de Loyola and
Cecilia Zarraga filed a complaint
docketed as Civil Case No. B-2194 for
IV. Issue:

G.R. No. 126000, October 7, 1998  Whether or not the MWSS-Silhouette

sales agreement is valid and voidable.
METROPOLITAN WATERWORKS AND
SEWERAGE SYSTEM (MWSS), petitioner, vs. Rulings:
COURT OF APPEALS, HON. PERCIVAL LOPEZ,
AYALA CORPORATION and AYALA LAND, INC.,  The contract is valid because the three
respondents. elements of the contract: consent,
object, and cause of obligation, are
G.R. No. 128520, October 7, 1998 present.
 If the contract is voidable - "a contract
METROPOLITAN WATERWORKS AND
where consent is given through
SEWERAGE SYSTEM, petitioner, vs. HON.
mistake, violence, intimidation, undue
PERCIVAL MANDAP LOPEZ, CAPITOL HILLS
influence or fraud, is voidable", the four
GOLF AND COUNTRY CLUB INC., SILHOUETTE
year prescription period under Article
TRADING CORPORATION, and PABLO ROMAN
1391 of the New Civil Code will apply.
JR., respondents.
 The two ratification (express and
Facts: implied) of the sales agreement was
made in this case: Express – the Board
 In 1965, Petitioner, MWSS, leased of Trustees of MWSS passed a
around 128 hectares of its land to resolution approving the sale. Implied –
Respondent, Capitol Hills Golf and MWSS sent 3 demand letters, accepted
Country Club Inc. (CHGCCI) for 25 years the downpayment of the purchase
or until year 2005. price, and accepted a Letter of Credit
 The late President Ferdinand Marcos for the remaining balance.
issued a Letter of Instruction to  The consolidated petitions are hereby
petitioner cancelling the lease denied.
agreement between MWSS and CHGCCI
and selling the property to CHGCCI
 With the approval of the late President
Marcos, the Board of Trustees of MWSS
approved the sale of the subject
property in favor of respondent
Silhouette Trading Corp., the assignee
of CHGCCI with the total price of
P50,952,200.00
 Subsequently, Silhouette sold the
property to respondent Ayala.
 A decade later, petitioner MWSS filed
an action for declaration of nullity of
the MWSS-Silhouette sales agreement
and recovery of the property.
V.  Petitioner contends that respondent
had effectively ratified both contracts of
G.R. No. 139982, November 21, 2002
sale, by receiving the consideration
JULIAN FRANCISCO (Substituted by his Heirs, offered in each transaction.
namely: CARLOS ALTEA FRANCISCO; the heirs
Issue:
of late ARCADIO FRANCISCO, namely:
CONCHITA SALANGSANG-FRANCISCO  Whether or not the contract of sale was
(surviving spouse), and his children namely: void or voidable and capable of being
TEODULO S. FRANCISCO, EMILIANO S. ratified.
FRANCISCO, MARIA THERESA S. FRANCISCO,  Whether or not the owner’s condition
PAULINA S. FRANCISCO, THOMAS S. of the parcel of land can affect the
FRANCISCO; PEDRO ALTEA FRANCISCO; validity of the sale.
CARINA FRANCISCO-ALCANTARA; EFREN ALTEA
FRANCISCO; DOMINGA LEA FRANCISCO- Rulings:
REGONDON; BENEDICTO ALTEA FRANCISCO
 The contract of sale was valid but
and ANTONIO ALTEA FRANCISCO), petitioner,
voidable due to the fact the vendor
vs. PASTOR HERRERA, respondent.
entered into a contract but his capacity
Facts: to consent was vitiated by senile
dementia. Article 1390 is applied in this
 Eligio Herrera Sr., the father of the case.
respondent, is the owner of two parcels  Respondent’s action of receiving the
of land that is sold to the petitioners. payment is an implied ratification. An
 The first parcel of land covered by Tax annullable contract may be rendered
Declaration No. 01-00495 for the price perfectly valid by ratification. Therefore,
of P1,000,000.00. The other parcel of the annullable contract was valid.
land covered by TD No. 01-00497 was  The declared owner of the lots is in the
bought at P750,000.00 name of Herrera Sr. Therefore, only the
 Respondent negotiated for an increase owner has the right to transfer the
of price while receiving the payments. ownership thereof under the principle
Petitioner refused to agree with of jus dispondendi.
respondent.  The petition is granted. The trial court’s
 Respondent filed a complaint for decision is reversed and the contracts of
annulment of sale on the grounds that sale are hereby declared valid.
he allegedly owned the second parcel of
land; that the first parcel is subject for
co-ownership of the spouse of his
father; and that the sale was null and
void because his father, Herrera Sr., was
already incapacitated to give consent to
the contract because of mental
condition (senile dementia).
VI. Issues:

G.R. No. 179505, December 04, 2009  Whether or not there was consent from
the Board of Directors or “Dummy
FIRST PHILIPPINE HOLDINGS CORPORATION,
Board” of FPHC to sell the shares.
Petitioner, vs. TRANS MIDDLE EAST (Phils.)
 Whether or not the action for the
EQUITIES Inc., Respondent.
intervention for FPHC’s recovery of the
Facts: shares of common stock has already
prescribed.
 The petitioner, FPHC, is a holding
company engaged in power generation Rulings:
and distribution, property development
 The consent of the Board of Directors of
and manufacturing. The Lopez family
FHPC was duly obtained. The
controls the corporation. The
corporation powers of the Board of
respondent, TMEE, is formerly known
Directors are explicit in Section 23 of
as Philippine Commercial International
the Corporation Code which states “All
Bank. The owner of which is Benjamin
corporation powers shall be exercised,
Romualdez.
and all corporate business shall be
 On May 24, 1984, FPHC allegedly sold
conducted by the Board of Directors.
6,299,179 common stock shares to
Therefore, the contract of sale of the
TMEE.
shares of common stock is valid.
 The shares were allegedly illegally
 Mere allegation that the Board of
amassed by Romualdez during the reign
Directors were composed of Marcos
of the late President Marcos.
and Romualdez Group does not make
 The shares were part of the ill-gotten the contract void.
wealth of the late President sought to
 During the sale on May 24, 1984,
be recovered by the Presidential
petitioner did not question the said sale
Commission on Good Government via a
from its inception and some time after.
civil case before the Sandiganbayan.
It was only after four years and seven
 On December 28, 1988, FPHC filed a months that petitioner filed a
“Motion for Leave to Intervene and to complaint. Under Article 1391, the
Admit Complaint in Intervention” prescription period has already lapsed.
before the Sandiganbayan. The
 The petition is denied. The resolutions
corporation claims ownership of the
of Sandiganbayan are hereby affirmed.
shares.
 TMEE filed a motion to dismiss the
complaint on the ground that the action
for recovery had already prescribed.
VII.  Petitioner protested the sale of
Calapatia’s stock and filed a petition
G.R. No. 117604, March 26, 1997
nullifying the auction held by VGCCI and
CHINA BANKING CORPORATION, petitioner, vs. requesting for the issuance in its name.
COURT OF APPEALS, and VALLEY GOLF and
Issues:
COUNTRY CLUB, INC., respondents.
 Whether or not petitioner has the right
Facts:
to Calapatia’s stock when it was
 Galicano Calapatia Jr. is a stockholder of foreclosed due to non-payment of
private respondent VGCCI. obligation of the loan.
 On September 16, 1974, petitioner Rulings:
wrote to VGCCI requesting that the
pledge agreement be recorded in its  Private respondent’s action is held in
books. bad faith because it disregarded
 On September 27, 1974, VGCCI petitioner’s rights as pledgee.
acknowledged and noted the  The pledge was used as security for a
agreement in its corporate books. loan. Therefore, petitioner has its rights
 On August 03, 1983, Calapatia obtained when there was non-payment of the
P20,000.00 loan from petitioner, obligation, despite repeated demands.
pledging his stock from VGCCI.  Petitioner, as third party, cannot be
 Because of Calapatia’s failure to pay his bound by the by-laws of VGCCI.
obligation, petitioner filed a petition for  Section 63 of the Corporation Code
extrajudicial foreclosure for his pledged does not apply because the subscription
stock. for the share was paid. Only the
 On May 14, 1985, petitioner informed monthly dues were not.
VGCCI of the foreclosure proceedings
and requested that the stock be
transferred in its name.
 VGCCI refused petitioner’s request due
to Calapatia’s unsettled accounts with
the club.
 Despite the refusal, there was a public
auction held regarding the stock of
Calapatia. Petitioner was proclaimed
the highest bidder and was issued a
certificate of sale.
 Despite repeated demands from VGCCI,
Calapatia did not settle his dues with
the club. For this reason, VGCCI
conducted a public auction with his
stock included in the list for auction.