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    PNCC vs. CA, Et. Al. GR No. 116896

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    Evander Arcenal
    The petitioner Philippine National Construction Corporation entered into a lease agreement with private respondents to lease land, with annual rental payments of PHP 240,000. After obtaining permits, the private respondents requested the first annual rental payment but the petitioner wanted to terminate the contract due to financial and technical difficulties, arguing it only had to pay for one month. The private respondents filed a case for specific performance and damages. The courts ruled in favor of the private respondents. The Supreme Court upheld this, finding that the petitioner could not avail itself of provisions allowing termination of obligations that become legally or physically impossible, as this applied only to obligations "to do" and not obligations "to give" like the rental payments. It also found the circumstances cited by the petitioner

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    PNCC vs. CA, Et. Al. GR No. 116896

    Uploaded by

    Evander Arcenal
    2K views1 page
    The petitioner Philippine National Construction Corporation entered into a lease agreement with private respondents to lease land, with annual rental payments of PHP 240,000. After obtaining permits, the private respondents requested the first annual rental payment but the petitioner wanted to terminate the contract due to financial and technical difficulties, arguing it only had to pay for one month. The private respondents filed a case for specific performance and damages. The courts ruled in favor of the private respondents. The Supreme Court upheld this, finding that the petitioner could not avail itself of provisions allowing termination of obligations that become legally or physically impossible, as this applied only to obligations "to do" and not obligations "to give" like the rental payments. It also found the circumstances cited by the petitioner

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    1. PNCC vs. CA, et. al. GR No. 116896

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    The petitioner Philippine National Construction Corporation entered into a lease agreement with private respondents to lease land, with annual rental payments of PHP 240,000. After obtaining permits, the private respondents requested the first annual rental payment but the petitioner wanted to terminate the contract due to financial and technical difficulties, arguing it only had to pay for one month. The private respondents filed a case for specific performance and damages. The courts ruled in favor of the private respondents. The Supreme Court upheld this, finding that the petitioner could not avail itself of provisions allowing termination of obligations that become legally or physically impossible, as this applied only to obligations "to do" and not obligations "to give" like the rental payments. It also found the circumstances cited by the petitioner

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views1 page

    PNCC vs. CA, Et. Al. GR No. 116896

    Uploaded by

    Evander Arcenal
    The petitioner Philippine National Construction Corporation entered into a lease agreement with private respondents to lease land, with annual rental payments of PHP 240,000. After obtaining permits, the private respondents requested the first annual rental payment but the petitioner wanted to terminate the contract due to financial and technical difficulties, arguing it only had to pay for one month. The private respondents filed a case for specific performance and damages. The courts ruled in favor of the private respondents. The Supreme Court upheld this, finding that the petitioner could not avail itself of provisions allowing termination of obligations that become legally or physically impossible, as this applied only to obligations "to do" and not obligations "to give" like the rental payments. It also found the circumstances cited by the petitioner

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    PHILIPPINE NATIONAL CONSTRUCTION CORPORATION versus C.A. et al.

    GR No. 116896; May 5, 1997

    FACTS
    Petitioner and private respondents entered into a Lease Agreement commencing on the date of
    issuance of the industrial clearance by the Ministry of Human Settlements and that rental shall be
    paid yearly amounting to Php 240,000.00. Upon obtaining of Temporary Use Permit, private
    respondents wrote a letter requesting the petitioner to pay the first annual rental. However,
    petitioner expressed its intention to terminate the contract due to financial as well as technical
    difficulties. It also argued that it was only obligated to pay for one-month period of lease. This
    prompted the respondent to file an action against the petitioner for specific performance with
    damages before the RTC of Pasig. The trial court and the CA favored the respondents, hence this
    petition.

    ISSUE
    WON the petitioner is entitled to avail the benefit of Articles 1266 and 1267 of the New Civil
    Code

    RULING
    It is a fundamental rule that contracts, once perfected, bind both contracting parties, and
    obligations arising therefrom have the force of law between the parties and should be complied
    with in good faith. But the law recognizes exceptions to the principle of the obligatory force of
    contracts. One exception is laid down in Article 1266 of the Civil Code, which reads: “The
    debtor in obligations to do shall also be released when the prestation becomes legally or
    physically impossible without the fault of the obligor.”
    Petitioner cannot, however, successfully take refuge in the said article, since it is applicable only
    to obligations “to do,” and not to obligations “to give.” An obligation “to do” includes all kinds
    of work or service; while an obligation “to give” is a prestation which consists in the delivery of
    a movable or an immovable thing in order to create a real right or for the use of the recipient, or
    for its simple possession, or in order to return it to its owner.
    The obligation to pay rentals or deliver the thing in a contract of lease falls within the prestation
    “to give;” hence, it is not covered within the scope of Article 1266. At any rate, the unforeseen
    event and causes mentioned by the petitioner are not the legal or physical impossibilities
    contemplated in the said article. Besides, petitioner failed to state specifically the circumstances
    brought about by the “abrupt change in the political climate” except the alleged prevailing
    uncertainties in government policies on infrastructure projects.
    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.

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