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People v. Franklin

Appeal taken by the Asian Surety & Insurance Company, Inc. from the decision of the Court of
First Instance of Pampanga dated April 17, 1963, forfeiting the bail bond posted by it for the

e provisional release of Natividad Franklin, the accused in Criminal Case No. 4300 of said
court, as well as from the latter's orders denying the surety company's motion for a reductions
of bail, and its motion for reconsideration thereof.

It appears that an information filed with the Justice of the Peace Court of Angeles, Pampanga,
docketed as Criminal Case No. 5536, Natividad Franklin was charged with estafa. Upon a bail
bond posted by the Asian Surety & Insurance Company, Inc. in the amount of P2,000.00, she

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was released from custody.
After the preliminary investigation of the case, the Justice of the Peace Court elevated it to the
Court of First Instance of Pampanga where the Provincial Fiscal filed the corresponding
information against the accused. The Court of First Instance then set her arraignment on July

e 14, 1962, on which date she failed to appear, but the court postponed the arraignment to July
28 of the same year upon motion of counsel for the surety company. The accused failed to
appear again, for which reason the court ordered her arrest and required the surety company

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to show cause why the bail bond posted by it should not be forfeited.

On September 25, 1962, the court granted the surety company a period of thirty days within
which to produce and surrender the accused, with the warning that upon its failure to do so

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the bail bond posted by it would be forfeited. On October 25, 1962 the surety company filed a
motion praying for an extension of thirty days within which to produce the body of the
accused and to show cause why its bail bond should not be forfeited. As not withstanding the
extension granted the surety company failed to produce the accused again, the court had no

d other alternative but to render the judgment of forfeiture.

Subsequently, the surety company filed a motion for a reduction of bail alleging that the

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reason for its inability to produce and surrender the accused to the court was the fact that the
Philippine Government had allowed her to leave the country and proceed to the United States
on February 27, 1962. The reason thus given not being to the satisfaction of the court, the
motion for reduction of bail was denied. The surety company's motion for reconsideration was

n also denied by the lower court on May 27, 1963, although it stated in its order that it would
consider the matter of reducing the bail bond "upon production of the accused." The surety
company never complied with this condition.
Appellant now contends that the lower court should have released it from all liability under

c the bail bond posted by it because its failure to produce and surrender the accused was due to
the negligence of the Philippine Government itself in issuing a passport to said accused,
thereby enabling her to leave the country. In support of this contention the provisions of

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Article 1266 of the New Civil Code are invoked.
Appellant's contention is untenable. The abovementioned legal provision does not apply to its
case, because the same speaks of the relation between a debtor and a creditor, which does not
exist in the case of a surety upon a bail bond, on the one hand, and the State, on the other.
In U.S. vs. Bonoan, et al., 22 Phil., p. 1, We held that: The rights and liabilities of sureties on a
recognizance or bail bond are, in many respects, different from those of sureties on ordinary
bonds or commercial contracts. The former can discharge themselves from liability by

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surrendering their principal; the latter, as a general rule, can only be released by payment of
the debt or performance of the act stipulated.

In the more recent case of Uy Tuising, 61 Phil. 404, We also held that:By the mere fact that a
person binds himself as surety for the accused, he takes charge of, and absolutely becomes
responsible for the latter's custody, and under such circumstances it is incumbent upon him,
or rather, it is his inevitable obligation not merely a right, to keep the accused at all times
under his surveillance, inasmuch as the authority emanating from his character as surety is no
more nor less than the Government's authority to hold the said accused under preventive
imprisonment. In allowing the accused Eugenio Uy Tuising to leave the jurisdiction of the
Philippines, the appellee necessarily ran the risk of violating and in fact it clearly violated the
terms of its bail bonds because it failed to produce the said accused when on January 15, 1932,
it was required to do so. Undoubtedly, the result of the obligation assumed by the appellee to
hold the accused at all times to the orders and processes of the lower court was to prohibit
said accused from leaving the jurisdiction of the Philippines because, otherwise, said orders
and processes would be nugatory and inasmuch as the jurisdiction of the court from which
they issued does not extend beyond that of the Philippines, they would have no binding force
outside of said jurisdiction.

It is clear, therefore, that in the eyes of the law a surety becomes the legal custodian and jailer
of the accused, thereby assuming the obligation to keep the latter at all times under his
surveillance, and to produce and surrender him to the court upon the latter's demand.
That the accused in this case was able to secure a Philippine passport which enabled her to go
to the United States was, in fact, due to the surety company's fault because it was its duty to do
everything and take all steps necessary to prevent that departure. This could have been
accomplished by seasonably informing the Department of Foreign Affairs and other agencies
of the government of the fact that the accused for whose provisional liberty it had posted a bail
bond was facing a criminal charge in a particular court of the country. Had the surety
company done this, there can be no doubt that no Philippine passport would have been issued
to Natividad Franklin.

UPON ALL THE FOREGOING, the decision appealed from is affirmed in all its parts, with
costs.
Immaculata v. Navarro

Petitioner's Motion for Reconsideration of Our decision dated November 26, 1986 asks Us to consider
a point inadvertently missed by the Court the matter of legal redemption of a parcel of land
previously obtained by petitioner Lauro Immaculata thru a free patent. The reconsideration of this issue
is hereby GRANTED.

While res judicata may bar questions on the validity of the sale in view of alleged insanity and
intimidation (and this point is no longer pressed by counsel for the petitioner) still the question of the
right of legal redemption has remained unresolved.

Be it noted that in an action (Civil Case No. 20968) filed on March 24, 1975 before the defunct Court
of First Instance of Rizal, petitioner presented an alternative cause of action or prayer just in case the
validity of the sale would be sustained. And this alternative cause of action or prayer is to allow
petitioner to legally redeem the property.

We hereby grant said alternative cause of action or prayer. While the sale was originally executed
sometime in December, 1969, it was only on February 3, 1974 when, as prayed for 1 by private
respondent, and as ordered by the court a quo, a "deed of conveyance" was formally executed. Since
offer to redeem was made on March 24, 1975, this was clearly within the five-year period of legal
redemption allowed by the Public Land Act (See Abuan v. Garcia, 14 SCRA 759, 761).

The allegation that the offer to redeem was not sincere, because there was no consignation of the
amount in Court is devoid of merit. The right to redeem is a RIGHT, not an obligation, therefore, there
is no consignation required (De Jesus v. Garcia, C.A. 47 O.G. 2406; Resales v. Reyes, 25 Phil. 495,
Vda. de Quirino v. Palarca, L-28269, Aug. 16, 1969) to preserve the right to redeem (Villegas v.
Capistrano, 9 Phil. 416).

WHEREFORE, as prayed for by the petitioner Lauro Immaculata (represented by his wife, Amparo
Velasco, as Guardian ad litem) the decision of this Court dated November 26, 1986 is hereby
MODIFIED, and the case is remanded to the court a quo for it to accept payment or consignation 2 (in
connection with the legal redemption which We are hereby allowing the petitioner to do) by the herein
petitioner of whatever he received from respondent at the time the transaction was made.
SO ORDERED.
PNCC v. Buan

Facts
On 22 May 1979, private respondent, Romeo Buan, was hired by petitioner,
Philippine National Construction Corporation ("PNCC") to work as Civil Engineer III
in Saudi Arabia for a period of two (2) years with a monthly salary of US$1,024.00.
While in Saudi Arabia, respondent was assigned to work in the Saudi
Government's Mecca Stormwater Drainage Project where petitioner was a sub-
contractor of Saudi Research and Development Corporation ("REDEC"), the main
contractor. After private respondent had served the full term of his two-year
contract, he entered into another two-year contract of employment with petitioner
under which he was hired as Senior Engineer at a higher monthly salary of
US$1,350. This new contract of employment provided, among other things, that:

All expenses for entry visas to Saudi Arabia or residence permits thereof of the EMPLOYEE shall be
borne by the COMPANY. The COMPANY shall assist the employee in the renewal of his Residence
permit during the term of this contract. Should the renewal of the said permit be denied by the
concerned authorities for any reason, this contract shall be cancelled as of the end of the residence
period without prejudice to the rights of the employee, benefits or privileges accrued at the time of
the cancellation of this Agreement.

On 21 August 1981, private respondent arrived in Saudi Arabia on a re-entry

visa sponsored by REDEC. On 1 September 1981, however, private respondent's
Residence and Work Permit ("Iqama") expired. Petitioner transmitted to the
project manager of REDEC a letter requesting extension of private respondent's
Residence and Work permit. However, this request was returned by one Mr. Ziad
Yamut with the notation "returned without renewal" together with a handwritten
note stating "having been dissatisfied with the performance BUAN we
suggest that you send him back on the reason that REDEC has refused to renew
the IQAMA." As a result, private respondent was repatriated on 26 November
1981.
Respondent then filed a complaint against petitioner PNCC before public
respondent Philippine Overseas Employment Administration ("POEA") for breach
of contract or illegal dismissal. In a decision dated 15 April 1986, POEA ordered
petitioner to pay private respondent his salary corresponding to the unexpired
term of the second contract of employment in the total amount of US$28,080.00,
or its equivalent in Philippine currency at the time of actual payment, plus
attorney's fees. Petitioner appealed, the decision of the POEA was affirmed by the
National Labor Relations Commission ("NLRC") with some modifications in respect
of the award granted. Thus this Petition for Certiorari with prayer for temporary
restraining order.

Issue
Whether NLRC abused its discretion in holding petitioner liable for breach of
contract despite the fact that termination of the overseas contract was due
to force majuere and events not foreseen by the parties.

Decision
Yes. We are unable to agree with public respondent NLRC. While it may be
true that under our labor laws petitioner is the employer of private respondent, it
must be noted that the employment contract entered into by private respondent
is an overseas employment contract to be implemented in Saudi Arabia and which
implementation must comply with Saudi Arabian law. It is not disputed that
petitioner had no official standing in Saudi Arabia being only a sub-contractor of
REDEC, the principal contractor. Indeed, the NLRC conceded that "under the Saudi
Arabian law it is only REDEC which can sponsor the renewal of private
respondent's work permit." Under Saudi Arabian law, REDEC was to be, in effect,
the employer of private respondent.

Appraising the second employment contract between petitioner and private

respondent in terms of Philippine law, there are three (3) reasons why petitioner
cannot be held liable under that contract for breach thereof under the
circumstances of this case. The first reason relates to paragraph 13 of the second
contract, quoted earlier. It will be seen that the renewal of private respondent's
Residence and Work permit constituted a condition to his continued employment
in Saudi Arabia. That condition was resolutory in nature, that is, the non-renewal
of private respondent's permit had the effect of resolving, or rendering
cancellable, that contract.

The second reason is found in the rule that an obligor shall be released from
his obligation when the prestation has become legally or physically impossible
without fault on his part. The supervening impossibility of performance, based
upon some factor independent of the will of the obligor, releases the obligor from
his obligation after restitution of what he may have received, if any, in advance
from the other contracting party; 8 the obligor incurs no liability for damages for
his inability to perform. In the case at bar, the failure of refusal of REDEC to
sponsor the renewal of private respondent's Residence and Work permit had
rendered it legally impossible for petitioner to continue to implement its contract
of employment in Saudi Arabia of private respondent. There is no dispute that
REDEC was not subject to the control of petitioner; indeed, it was petitioner which
was wholly subject to the control and even the whims of REDEC. To insist that
petitioner should pay for private respondent's wages under the second contract of
employment under the circumstances of this case, is to impose an unfair burden
upon the latter and to sanction the unjust enrichment of private respondent at the
expense of petitioner. To require petitioner to retain the services of private
respondent in Saudi Arabia would be to require petitioner to violate the labor laws
of its host country. So to require, would be to impose an intolerable burden upon
petitioner.

There is a third and final reason why private respondent cannot hold
petitioner liable for breach of the second contract of employment. Paragraph 13 of
the second contract expressly envisaged the possibility that renewal of the
Residence and Work permit of private respondent could "be denied by the
concerned authorities for any reason," in which case, the contract would be
"cancelled." Private respondent was, of course, aware that his original permit was
about to expire when he left for Saudi Arabia the second time. He must or should
have been also alerted by the second contract of employment to the possibility of
non-renewal of his Residence and Work permit and the ensuing cancellability of
the contract. Petitioner did not, in other words, conceal the legal and practical
situation from private respondent. We find no bad faith on the part of petitioner.

ACCORDINGLY, the Court Resolved to GRANT due course to the Petition for
Certiorari and to REVERSE and SET ASIDE the Decision dated 21 April 1987 of the
NLRC in POEA. The Temporary Restraining Order earlier issued by this Court is
hereby made PERMANENT.

PNCC VS. CA Case Digest

PNCC VS. CA
272 SCRA 183

FACTS: On 18 November 1985, private respondents and petitioner entered into a

contract of lease of a parcel of land owned by the former. The terms and
conditions of said contract of lease are as follows: a) the lease shall be for a
period of five (5) years which begins upon the issuance of permit by the Ministry
of Human Settlement and renewable at the option of the lessee under the terms
and conditions, b) the monthly rent is P20, 000.00 which shall be increased yearly
by 5% based on the monthly rate, c) the rent shall be paid yearly in advance, and
d) the property shall be used as premises of a rock crushing plan.

On January 7, 1986, petitioner obtained permit from the Ministry which was to be
valid for two (2) years unless revoked by the Ministry. Later, respondent requested
the payment of the first annual rental. But petitioner alleged that the payment of
rental should commence on the date of the issuance of the industrial clearance
not on the date of signing of the contract. It then expressed its intention to
terminate the contract and decided to cancel the project due to financial and
technical difficulties. However, petitioner refused to accede to respondents
request and reiterated their demand for the payment of the first annual rental.
But the petitioner argued that it was only obligated to pay P20, 000.00 as rental
for one month prompting private respondent to file an action against the
petitioner for specific performance with damages before the RTC of Pasig. The trial
court rendered decision in favor of private respondent. Petitioner then appealed
the decision of the trial court to the Court of Appeals but the later affirmed the
decision of the trial court and denied the motion for reconsideration.

ISSUE: Whether or not petitioner can avail of the benefit of Article 1267 of the
New Civil Code.

RULING: NO. The petitioner cannot take refuge of the said article. Article 1267 of
the New Civil Code provides that when the service has become so difficult as to
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 of
rebus 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 chances
of circumstances that equity demands assistance for the debtor. The principle of
rebus sic stantibus 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.

In this case, petitioner averred that three (3) abrupt change in the political climate
of the country after the EDSA Revolution and its poor financial condition rendered
the performance of the lease contract impractical and inimical to the corporate
survival of the petitioner. However, as held in Central Bank v. CA, mere pecuniary
inability to fulfill an engagement does not discharge a contractual obligation, nor
does it constitute a defense of an action for specific performance.

Furthermore, even if they knew that the fucking country was having political
upheavals due to the assassination of fucking marcos they still entered into
the contract. It isn't manifestly beyond their contemplation.
1266 also doesn't fucking apply because this isn't an obligation to do but to
fucking give. Furthermore, it isn't physically or legally impossible to comply
with the terms of the contract
Laguna Tayabas Case:

Laguna v. Manabat:
Binan leased their certificates of public convenience to Laguna-Tayabas Bus Co.
and Batangas Transpo separately. Laguna and Batangas stopped paying rent due
to a rally conducted by their employees and the reduction in the amount of
dollars allowed by the Monetary Board for the purchase of spare parts needed in
the operation of their trucks, the alleged difficulty encountered in securing said
parts, and their procurement at exorbitant costs, the high cost of operation,
coupled with the lack of passenger traffic on the leased lines resulted in financial
losses.
Held: the alleged causes for the suspension of operations on the lines leased,
namely, the high prices of spare parts and gasoline and the reduction of the dollar
allocations, already existed when the contract of lease was executed. The cause
of petitioners' inability to operate on the lines cannot, therefore, be ascribed to
fortuitous events or circumstances beyond their control, but to their own
voluntary desistance. 3rd , performance is not excused by subsequent inability to
perform, by unforeseen difficulties, by unusual
or unexpected expenses, by danger, by inevitable accident, by breaking of
machinery, by strikes, by sickness, by failure of a party to avail himself of the
benefits to be had under the contract, by weather conditions, by financial
stringency or by stagnation of business. Neither is performance excused by the
fact that the contract turns out to be hard and improvident, unprofitable, or
impracticable, ill advised, or even foolish, or less profitable, unexpectedly
burdensome.

Occena v. Jabson: Tropical Homes, Inc. filed a complaint for modification of the
terms and conditions of its subdivision contract with petitioners, alleging that due
to the increase in price of oil and its derivatives and the concomitant worldwide
spiraling of prices, which are not within the control of plaintiff, of all commodities
including raw materials required for such development work, the cost of
development has risen to levels which are not within the remotest contemplation
of the parties at the time said agreement was entered into. It further alleges that
further performance by the plaintiff under the contract, will result in situation
where defendants would be unjustly enriched at the expense of the plaintiff.
Tropical homes prays for the modification of the terms and conditions of the
contract by fixing the proper shares that should pertain to the herein parties out
of the gross proceeds from the sales of subdivided lots. Held: The complaint
seeks not release from the subdivision contract
but that the court "render judgment I modifying the terms and Conditions of the
Contract. 1267 does not grant the courts this authority to remake, modify or
revise the contract or to fix the division of shares between the parties as
contractually stipulated with the force of law between the parties, so as to
substitute its own terms for those covenanted by the parties themselves.

Naga Telephone v. CA: NATELCO and CASURECO entered into a contract

wherein NATELCO shall use CASURECOs electric light posts in Naga City. In
consideration, CASURECO agreed to install free of charge, 10 telephone
connections for NATELCOs use. After the contract has been enforced for 10 years,
CASURECO filed a case for reformation of the contract on the ground that it has
become too one-sided in favor of NATELCO because after 11 years of NATELCOs
use of the posts, the telephone cables strung by them have become much heavier
with the increase in the volume of their subscribers, worsened by the fact that
their linemen bore holes through the posts at which points those posts were
broken during typhoons. Held: Art. 1267 is applicable. The report of the Code
Commission reveals that the rationale behind the article is that when the service
has become so difficult as to be manifestly beyond the contemplation of the
parties, the court should be authorized
to release the obligor in whole or in part. This article is based on the doctrine of
rebus sic stantibus which recognizes that the parties stipulate in the light of
certain prevailing conditions, and once these conditions cease to exist the
contract also ceases to exist. Considering practical needs and the demands of
equity and good faith, the disappearance of the basis of a contract gives rise to a
right to relief in favor of the party prejudiced. Further, service under 1267
should be understood as referring to performance of the obligation. In this case,
the performance contemplated is CASURECOs obligation to allow NATELCO to use
its posts. Also, 1267 does not require that the contract be for future service with
future unusual change, contrary to NATELCOs argument. Finally, the Occea
ruling which provides that courts cannot modify the contract is inapplicable in this
case since the Court is NOT making a new contract for the parties herein, but
instead finds the compensation
necessary in order not to disrupt the basic and essential services being rendered
by both parties herein to the public and to avoid unjust enrichment by appellant
at the expense of plaintiff.

Magat v. CA: Guerrero Transport Services, owned by Guerrero, won a bid for the
operation of a fleet of radio-controlled taxicabs within the Subic Naval Base. LOI 1
was passed by Marcos seizing all privately owned media facilities, including radio
facilities. The Radio Control Office also issued AC 4, suspending acceptance of
application for permits to own and/or possess radio transmitters and transceivers.
Thereafter, Guerrero and Victorino entered into a contract for the sale of
transceivers and Victorino placed an order with his Japanese supplier. However,
since the government refused to grant the permit to import the transceivers, the
order was cancelled by Guerrero. Held: no breach of contract and even if there
was, such will not give rise to damages. 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." 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, he cannot be faulted.
Note: Nowhere in the LOI and Admin. Circular is there an express ban on the
importation of transceivers. Possession and importation of the radio transmitters
and transceivers was legal provided one had the necessary license for it.
Transceivers were not
prohibited but merely regulated goods.