ALMERO, JENNIFER T.

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TASK PERFORMANCE – BUSINESS LAW

ASUNCION vs. COURT OF APPEALS G.R. No. 109125,

December 2, 1994

I. ELEMENTS OF OBLIGATION

Fact: Petitioners filed a complaint against Unjiengs, before the Regional Trial Court alleging
that Unjiengs informed Petitioners that they are offering to sell the premises and are giving
them priority to acquire the same; that during the negotiations, Unjiengs offered a price of
P6-million while Petitioners made a counter offer of P5-million; that Petitioners thereafter
asked the Unjiengs to put their offer in writing to which request defendants acceded; that in
reply to Unjiengs letter, plaintiffs asked to specify the terms and conditions of the offer to
sell; that when Petitioners did not receive any reply, they sent another letter; that since
defendants failed to specify the terms and conditions of the offer to sell and because of
information received that defendants were about to sell the property, Petitioners were
compelled to file the complaint to compel Unjiengs to sell the property to them. Judgment
was rendered in favor of the Unjiengs and against the Petitioners summarily dismissing the
complaint subject to the aforementioned condition that if the defendants subsequently
decide to offer their property for sale for a purchase price of Eleven Million Pesos or lower,
then the Petitioners has the option to purchase the property or of first refusal, otherwise,
defendants need not offer the property to the Petitioners if the purchase price is higher than
Eleven Million Pesos. While the case was pending consideration by the SC, the Unjieng
spouses executed a Deed of Sale to the Private Defendant. Private Defendant wrote a letter
to the Petitioners demanding that the latter vacate the premises. Petitioners replied to the
petitioner stating that the petitioner brought the property subject to the notice of lis pendens
regarding Civil Case No. 87-41058 annotated on TCT No. 105254/T-881 in the name of the
Cu Unjiengs. The Petitioners filed a Motion for Execution to the RTC who ordered the
defendants to execute the necessary Deed of Sale of the property in litigation in favor of the
Petitioners for the consideration of P15,000,000.00 and ordering the Register of Deeds of the
City of Manila, to cancel and set aside the title already issued in favor of Private Defendant.
The appellate court, on appeal to it by Private Defendant, set aside and declared without
force and effect the above-questioned orders of the court a quo. Hence this case.

Issue: Whether the plaintiff can compel the defendants to execute the necessary Deed of
Sale of the property in litigation in favor of the plaintiffs who have a right of first refusal?

Held: NO, the final judgment in favor of the plaintiff was merely a “right of first refusal”. The
consequence of such a declaration entails no more than what has heretofore been said. In
fine, if, as it is here so conveyed to us, petitioners are aggrieved by the failure of private
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respondents to honor the right of first refusal, the remedy is not a writ of execution on the
judgment, since there is none to execute, but an action for damages in a proper forum for the
purpose.

II. CLASSIFICATIONS OF OBLIGATION

Development Bank of the Philippines (DBP) v. Adil,

Confessor and Villafuerte, et al., G.R. No. L-48889, 11 May
1989.

FACTS: On February 10, 1940 spouses Patricio Confessor and Jovita Villafuerte obtained
an agricultural loan from the Agricultural and Industrial Bank (AIB), now the Development
of the Philippines (DBP), in the sum of P2,000.00, Philippine Currency, as evidenced by a
promissory note of said date whereby they bound themselves jointly and severally to pay the
account in ten (10) equal yearly amortizations. As the obligation remained outstanding and
unpaid even after the lapse of the aforesaid ten-year period, Confessor, who was by then a
member of the Congress of the Philippines, executed a second promissory note on April 11,
1961, expressly acknowledging said loan and promising to pay the same on or before June
15, 1961. The trial court ordered the spouses to pay the loan, but this was reversed on appeal.

ISSUE#1: Does prescription operate to discharge a debt even if it there was an

acknowledgment of the debtor?

ISSUE#2: Is the conjugal partnership of the confessor and Villafuerte bound by the
execution of the second promissory note?

HELD#1: NO.

This is not a mere case of acknowledgment of a debt that has been prescribed but a new
promise to pay the debt. The consideration of the new promissory note is the pre-existing
obligation under the first promissory note. The statutory limitation bars the remedy but does
not discharge the debt. A new express promise to pay a debt barred … will take the case
from the operation of the statute of limitations as this proceeds upon the ground that as a
statutory limitation merely bars the remedy and does not discharge the debt, there is
something more than a mere moral obligation to support a promise, to wit a – pre-existing
debt which is a sufficient consideration for the new promise; upon this sufficient
consideration constitutes, in fact, a new cause of action.

HELD#2: YES.

Under Article 165 of the Civil Code, the husband is the administrator of the conjugal
partnership. As a such administrator, all debts and obligations contracted by the husband for
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the benefit of the conjugal partnership, are chargeable to the conjugal partnership. No doubt,
in this case, respondent Confessor signed the second promissory note for the benefit of the
conjugal partnership. Hence the conjugal partnership is liable for this obligation.

III. SOURCES OF OBLIGATION

a) Obligations arising from law.

Facts:

On the 23d of November 1900, Arturo Pelayo, a physician residing in Cebu, filed a
complaint against Marcelo Lauron and Juana Abella setting forth that on or about the 13th
of October of said year, at night, the plaintiff was called to the house of the... defendants,
situated in San Nicolas, and that upon arrival he was requested by them to render medical
assistance to their daughter-in-law who was about to give birth to a child
In answer to the complaint counsel for the defendants denied all of the allegations therein
contained and alleged as a special defense, that their daughter-in-law had died in
consequence of the said childbirth, and that when she was alive she lived with her husband
independently... and in a separate house without any relation whatever with them, and that,
if on the day when she gave birth, she was in the house of the defendants, her stay there
was accidental and due to fortuitous circumstances; therefore, he prayed that the
defendants be absolved of the... complaint with costs against the plaintiff.
The plaintiff demurred to the above answer, and the court below sustained the demurrer,
directing the defendants, on the 23rd of January 1907, to amend their answer.
As a result of the evidence adduced by both parties, judgment was entered by the court
below on the 5th of April, 1907, whereby the defendants were absolved from the former
complaint, on account of the lack of sufficient evidence to establish a right of action against
the... defendants, with costs against the plaintiff, who excepted to the said judgment and in
addition moved for a new trial on the ground that the judgment was contrary to law; the
motion was overruled and the plaintiff excepted and in due course presented the
corresponding bill of... exceptions.
Issues:
Assuming that it is a real fact acknowledged by the defendants, that the plaintiff, by having
been sent for by the former, attended as a physician and rendered professional services to
a daughter-in-law of the said defendants during a difficult and laborious childbirth,... to
decide the claim of the said physician regarding the recovery of his fees, it becomes
necessary to decide who is bound to pay the bill, whether the father and mother-in-law of
the patient, or the husband of the latter.
Ruling:
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If every obligation consists in giving, doing, or not doing something (art. 1088), and
spouses are mutually bound to support each other, there can be no question but that, when
either of them because of illness should need medical assistance, the other is under the...
unavoidable obligation to furnish the necessary services of a physician so that health may
be restored, and he or she may be freed from the sickness by which life is jeopardized; the
party bound to furnish such support is therefore liable for all expenses, including the... fees
of the medical expert for his professional services. This liability originates from the above-
cited mutual obligation which the law lies expressly established between the married
couple.
The fact that it was not the husband who called the plaintiff and requested his assistance
for his wife is no bar to the fulfillment of the said obligation, as the defendants, given the
imminent danger to which the life of the... the patient was at that moment exposed,
considered that medical assistance was urgently needed, and the obligation of the husband
to furnish his wife with the indispensable services of a physician at such critical moments is
specially established by the law, as has been seen, and... compliance therewith is
unavoidable; therefore, the plaintiff, who believes that he is entitled to recover his fees,
must direct his action against the husband who is under obligation to furnish medical
assistance to his lawful wife in such an emergency.
b) Obligation arising from contracts. (METROPOLITAN BANK VS ANA GRACE
ROSALES AND YO YUK TO, G.R. NO. 183204, JANUARY 13,2014)
Facts:
Petitioner Metropolitan Bank and Trust Company is a domestic banking corporation duly
organized and existing under the laws of the Philippines.[6] Respondent Ana Grace Rosales
(Rosales) is the owner of China Golden Bridge Travel Services,[7] a travel
agency.[8] Respondent Yo Yuk To is the mother of respondent Rosales.
In 2000, respondents opened a Joint Peso Account[10] with the petitioner's Pritil-Tondo
Branch.[11] As of August 4, 2004, the respondents' Joint Peso Account showed a balance
of P2,515,693.52.
In May 2002, respondent Rosales accompanied her client Liu Chiu Fang, a Taiwanese
National applying for a retiree's visa from the Philippine Leisure and Retirement Authority
(PLRA), to the petitioner's branch in Escolta to open a savings account, as required by the
PLRA.[13] Since Liu Chiu Fang could speak only in Mandarin, respondent Rosales acted as
an interpreter for her.
On March 3, 2003, respondents opened the petitioner's Pritil-Tondo Branch Joint Dollar
Account [15] with an initial deposit of US$14,000.00.
On July 31, 2003, the petitioner issued a "Hold Out" order against the respondents'
accounts.
September 3, 2003, the petitioner, through its Special Audit Department Head Antonio Ivan
Aguirre, filed before the Office of the Prosecutor of Manila a criminal case for Estafa
through False Pretences, Misrepresentation, Deceit, and Use of Falsified Documents,...
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against respondent Rosales.[19] The petitioner accused respondent Rosales and an

unidentified woman as the ones responsible for the unauthorized and fraudulent withdrawal
of US$75,000.00 from Liu Chiu Fang's dollar... account with the petitioner's Escolta Branch.
Petitioner alleged that on February 5, 2003, its branch in Escolta received from the PLRA a
Withdrawal Clearance for the dollar account of Liu Chiu Fang;[21] that in the... afternoon of
the same day, respondent Rosales went to petitioner's Escolta Branch to inform its Branch
Head, Celia A. Gutierrez (Gutierrez), that Liu Chiu Fang was going to withdraw her dollar
deposits in cash;[22] that Gutierrez told respondent Rosales to... come back the following
day because the bank did not have enough dollars;[23] that on February 6, 2003,
respondent Rosales accompanied an unidentified impostor of Liu Chiu Fang to the
bank;[24] that the impostor was able to withdraw
Liu Chiu Fang's dollar deposit in the amount of US$75,000.00;[25] that on March 3, 2003,
respondents opened a dollar account with the petitioner; and that the bank later discovered
that the serial numbers of the dollar notes deposited by respondents in the... amount of
US$11,800.00 were the same as those withdrawn by the impostor.
Respondents... alleged that they attempted several times to withdraw their deposits but
were unable to because the petitioner had placed their accounts under "Hold Out"
status.[45] No explanation, however, was given by the petitioner as to why it issued the
"Hold Out"... order.[46] Thus, they prayed that the "Hold Out" order be lifted and that they
are allowed to withdraw their deposits.[47] They likewise prayed for actual, moral, and
exemplary damages, as well as attorney's fees.
Petitioner alleged that respondents have no cause of action because it has a valid reason
for issuing the "Hold Out" order.[49] It averred that due to the fraudulent scheme of
respondent Rosales, it was compelled to reimburse Liu Chiu Fang the... amount of
US$75,000.00[50] and to file a criminal complaint for Estafa against respondent Rosales.
Issues:
The [CA] ERRED IN RULING THAT THE "HOLD-OUT" PROVISION IN THE
APPLICATION AND AGREEMENT FOR THE DEPOSIT ACCOUNT DOES NOT APPLY
IN THIS CASE
Ruling:
Petitioner's reliance on the "Hold Out" clause in the Application and Agreement for Deposit
Account is misplaced.
The "Hold Out" clause applies only if there is a valid and existing obligation arising from
any of the sources of obligation enumerated in Article 1157[79] of the Civil Code, to wit:
law, contracts, quasi-contracts, delict, and quasi-delict. In this... case, the petitioner failed
to show that respondents have an obligation to it under any law, contract, quasi-contract,
delict, or quasi-delict. And although a criminal case was filed by the petitioner against
respondent Rosales, this is not enough reason for the petitioner to issue a
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"Hold Out" order as the case is still pending and no final judgment of conviction has been
rendered against respondent Rosales. It is significant to note that at the time petitioner
issued the "Hold Out" order, the criminal complaint had not yet been filed.
Thus, considering that respondent Rosales is not liable under any of the five sources of
obligation, there was no legal basis for the petitioner to issue the "Hold Out"
order. Accordingly, we agree with the findings of the RTC and the CA that the "Hold Out"
clause does not... apply in the instant case.
Given the foregoing, we find that the petitioner is guilty of breach of contract when it
unjustifiably refused to release the respondents' deposit despite demand. Having breached
its contract with the respondents, the petitioner is liable for damages.
c) Obligations arising from quasi-contract.
i. Negotiorum Gestio
RUSTICO ADILLE v. CA, GR No. L-44546, 1988-01-29
Facts:
[Th]e land in question Lot 14694... originally belonged to one Felisa Alzul as her private
property;... she married twice in her lifetime; the first, with one Bernabe Adille, with
whom... she had as an only child, herein defendant, Rustico Adillo; in her second marriage
with one Procopio Asejo, her children were herein plaintiffs.
Felisa sold the property in pacto de retro to certain 3rd persons, period of repurchase being
3 years,... but she died... without being able to redeem,... after her death, but during the
period of redemption, herein defendant repurchased, by himself alone, and after that, he
executed a deed of extra-judicial partition representing himself to be the only heir and child
of his... mother Felisa with the consequence that he was able to secure the title in his name
alone also... his half-brothers and sisters,... herein plaintiffs, filed a present case for partition
with accounting on the position that he was only a trustee on an implied trust when he
redeemed... it also turned out that one of the plaintiffs, Emeteria Asejo was occupying a
portion, defendant... counterclaimed for her to vacate... trial Judge sustained defendant in
his position that he was and became absolute owner, he was not a trustee, and therefore,
dismissed the case and also condemned plaintiff occupant,
Emeteria to vacate.
The respondent Court of Appeals reversed the trial court.
Issues:
May a co-owner acquire exclusive ownership over the property held in common?
Ruling:
The right of repurchase may be exercised by a co-owner concerning his share alone.
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While the records show that the petitioner redeemed the property in its entirety,
shouldering the expenses therefor, that did not make him the owner of all of it. In... other
words, it did not put a to end the existing state of co-ownership.
Under the Civil Code:
ART. 488. Each co-owner shall have a right to compel the other co-owners to contribute to
the expenses of preservation of the thing or right owned in common and to the taxes. Any
one of the latter may exempt himself from this obligation by renouncing so much of his
undivided... interest as may be equivalent to his share of the expenses and taxes. No such
waiver shall be made if it is prejudicial to the co-ownership.
The result is that the property remains to be in a condition of co-ownership. While a
vendee a retro
"may not be compelled to consent to a partial redemption," the redemption by one co-heir
or co-owner of the property in its totality does not... vest in him ownership over it.
Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the
property and consolidate title thereto in his name.
But the provision does not give the redeeming co-owner the right to the... entire property.
It does not provide for a mode of terminating a co-ownership.
Neither does the fact that the petitioner had succeeded in securing title over the parcel in
his name terminate the existing co-ownership.
While his half-brothers and sisters are, as we said, liable to him for reimbursement as and
for their shares in redemption expenses, he... cannot claim the exclusive right to the
property owned in common.
Registration of property is not a means of acquiring ownership. It operates as a mere notice
of existing title, that is if there is one.
The petitioner must then be said to be a trustee of the property on behalf of the private
respondents.
The Civil Code states:
ART. 1456. If the property is acquired through mistake or fraud, the person obtaining it is,
by force of law, considered a trustee of an implied trust for the benefit of the person from
whom the property comes.
fraud attended the registration of the property. The petitioner's pretension that he was the
sole heir to the land... a clear... effort on his part to defraud his brothers and sisters and to
exercise sole dominion over the property.
prescription bars any demand on the property (owned in common) held by another (co-
owner) following the required number of years. In that event, the party in possession
acquires title to the property and the state of... co-ownership is ended.
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Has prescription, then, set in?... negative

Prescription, as a mode of terminating a relation of co-ownership, must have been
preceded by repudiation (of the co-ownership). The act of repudiation, in turn, is subject to
certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an... act of
repudiation is made known to the other co-owners; (3) the evidence thereon is clear and
conclusive; and (4) he has been in possession through open, continuous, exclusive, and
notorious possession of the property for the period required by law.
The instant case shows that the petitioner had not complied with these requisites.
he had deliberately kept the private respondents in the dark by feigning sole heirship over
the estate under dispute.
He cannot, therefore, be said to have "made known" his efforts to deny the co-ownership.
It is therefore no argument to say that the... act of registration is equivalent to a notice of
repudiation
WHEREFORE, there being no reversible error committed by the respondent Court of
Appeals, the petition is DENIED.