d'agost del 1911, fa cent anys, va nàixer a Castalla (l'Alcoià) Enric Valor i Vives, l'extraordinari

Held: There exist 3 divisions of times or zones: the first division covers all the time up to the moment when the risk of collision may be said to have begun. The second division covers the time between the moments of the risk of collision begins and the moment it has become a practical certainty. While the third division covers the time between the moments when collision has become a practical certainty and the moment of actual contact.

It was during the time when the sail vessel was passing through the third zone that it changed its course to port in order to avoid, if possible, the collision. This act may be said to have been done in extremis, and even if wrong, the sailing vessel is not responsible for the result.

Article 1305

Cagayan Fishing Development (CFD) vs. Sandiko 65

Phil.223

Facts: Manual Tabora is a registered owner of four parcels of land in barrio Linao, Appari. He mortgage in favor of PNB for P 8,000 and signed mortgage for additional P 7,000. And mortgaged favor of Severina Buzon to whom he is indebted for P 2900.

Tabora executed a public document by virtue of which said lands wore sold to plaintiff company ( CFD) subject to mortgages in favor of PNB and Buzon and will not transfer the title until the later has fully paid its debt. A year after the plaintiff’s incorporation on October 22,1930, a board

resolution was issued authorizing its president to sell the land to Teodoro Sandiko for P42, 000 and evidenced by deed of sale.

The defendant having failed to pay the sum stated in promissory notes, brought a court’s action in Court of First Instance in Manila which this court absolved the defendant. Plaintiff filed a motion but was denied, hence, this appeal was made.

PNB threatened Tabora to foreclose its mortgage, Tabora approached the defendant Sandiko and made him assume the payment of Tabora’s indebtedness. The promissory note was made payable to the plaintiff company so that the lands may not be attached by Tabora’s creditors.

Issue: Whether or not there was a valid contract by transfer of four land by the plaintiff to the defendant?

Held: The transfer from Tabora to CFD was subject to condition precedent. Part of the mortgage and that this condition not having compared with by CFD, the transfer was null and void because at the time was effected, the plaintiff corporation is non-existent. The transfer was effected May 31, 1930 and articles of incorporation was effected later October 22, 1930. In this case, it cannot be denied that the plaintiff was not yet incorporated when it entered into the contract of sale. Not even a de facto corp. not being in legal existence, it did not possess juridical capacity to enter into the contact.

Article 1306

Gabriel vs. Monte de Piedad 71

Phil.497

Facts: Petitioner Leoncio Gabriel was employed as appraiser of jewels in the pawnshop of Monte Piedad defendant from 1913-1933 on December 13, 1932, he executed a chattel mortgage to secure the part of deficiencies which resulted from his erroneous appraisal of jewels amounting to P

4,679.07 with interest and promised to pay the appellee the sum of P300 amount until the P 4,679.07 with interest is fully paid. And this was registered to become the a fore mentioned sum less what the balance of P11,345.75 and in case of default the Chattel Mortgage was based upon all non existing subtract matter as consideration and C.M was null and void. The lower court rendered judgment of lower court. Hence, this petition for review by certiorari.

Issue: Whether or not there was a valid contract made?

Held: There is a valid contract in this case. A contract is to be judged by its characteristics and courts will look to the substance. In the case at bar, the object of contract does not in anyway militate against public good. Neither does it contravene the policy of law as interest of society.

There is sufficient consideration in this contract. A pre-existing admitted liability is a good

consideration for a promise. It has satisfactorily established that it was executed voluntarily by the latter to guarantee the deficiencies resulting from his erroneous appraisals of the jewels. The

exception to this rule is where the inadequacy by is gross as to amount to fraud, oppression /of undue influence as when statutes requires the consideration to be inadequate. We are not convinced that the instant case falls within the exception. Therefore, the petition is dismissed.

Jimeno vs. Gacilago 14 Phil. 16

Facts: On the 7th of June, 1905, Manuel Jimeno, Clara Jimeno, Emilio Jimeno, Filomena Jimeno and her husband, Salvador Trono, filed a complaint with the Court of First Instance of Occidental Negros, alleging: that by means of a public instrument which was attached to the complaint a contract for partition of property had been entered into between them and Lope Gacilogo; that the defendant, Gacilagao, is in possession of all the property described in the instrument of partition, but, with the exception of two cocoanuts groves described in clause 7 thereof, he refuses to deliver to the plaintiffs, as per agreement, the portion that pertains to them; that the defendant, Gacilago, refuses to comply with the terms of the said instrument, under the pretext that clause 2 thereof is slightly

obscure, the obscurity being due to erroneous data furnished by the defendant himself, consisting in the inverted placing of the words north and south used in said clause; and that, by reason of this act of the defendant, the plaintiffs have suffered loss and damages to the extent of P600, wherefore they prayed that judgment be entered against the defendant compelling him to comply with the terms of the attached instrument of partition, and that the plaintiffs be allowed damages, plus cost.

The defendant answered in writing to the complaint and denied each and every one of its allegations with the exception of those contained in paragraphs 1 and 2 of the same, which he admitted as true and, as a defense, he alleged that the defendant had strictly complied with everything stipulated in the public instrument of partition to which the complaint referred.

Issue: Whether in the preparation of the second clause of the instrument of partition of certain undivided property, dated August 29, 1904, an error was committed in the designation of the

portions divided up with relation to two of the cardinal points of the horizon, and the true situation of the estate that is the subject of the division.

Held: It appears stipulated in clause 2 of the said instrument that the hacienda Filomena de Payao should be divided into three parts between the plaintiffs and the defendant; the northern and southern part of the estate to go to the defendant, Gacilago, and the central part of the same, lying between the said hacienda road and the old road to the pueblo of Soledad, both of which run parallel from east to west through the central part of the property, to go to the plaintiffs.

Allegations not duly substantiated by the record cannot prevail against the validity and efficiency of the stipulations contained in authentic documents, whether they be public or private, inasmuch as whatever may have been agreed to in a contract, where it does not violate the prohibitive provisions of the law or public morals, is binding upon the contracting parties. (Arts. 1254 and 1278, Civil Code.) When the terms of a written contract are clear and leave no doubt, the literal sense of its stipulations should be observed, and there should not be understood as included therein things and cases different from those with regard to which the persons interested intended to contract. (Arts.

1281 and 1283, Civil Code.)

From the foregoing it is inferred that there was no just or lawful reason for failure to comply with the stipulations of the written contract in question; therefore, the party that failed to fulfill the agreement is responsible for the loss occasioned to the other party, and is obliged to indemnify him in

accordance with the law and the principles of justice.

Petition granted.

Tiangco vs. CFI 98 SCRA 26

FACTS: Under date of June 13, 1980, a Joint Motion for Judgment on Compromise Agreement was filed by the petitioners and respondents.

JOINT MOTION FOR JUDGMENT ON COMPROMISE AGREEMENT

Now come the petitioners and respondents in the above-entitled cases, assisted by respective counsel and before the Honorable Supreme Court respectfully allege that they have arrived at and agreed to a settlement of their controversy in Civil Case No. Q-25435 entitled 'Dominador N. Venegas vs.

Salvador T. Tiangco. et al., CFI of Rizal Quezon City, Branch IX, which gave rise to and resulted in the above-entitled cases before the Honorable Supreme Court, to wit:

1. That the parties have agreed to ask the Honorable Supreme Court to dismiss or order the Hon.

Trial Court to dismiss Civil Case No. Q-25435 entitled 'Dominador N. Venegas vs. Salvador T.

Tiangco, et al., CFI of Rizal Quezon City, Branch IX, including an claiming, counterclaim and interventions arising from and by reason of said case, and likewise to dismiss the above two said cases on the ground that the same have become moot and academic, which dismissals of Civil Case Q-25435 CFI of Rizal Quezon City, Branch IX and the said above two cases shall be with prejudice;

2. That the parties have also agreed that the Lions Clubs in District 301-D which have been placed in status quo will reorganize themselves in accordance with the Constitution and By-Laws of Lions International after said clubs shall have withdrawn and/or dismissed all cases filed by them, their officers or members against Lions International and/or its representatives, which cases are pending or on appeal in the courts.

3. That after the dismissal of the above-entitled cases by the Supreme Court and all other cases pending in the courts as listed above and the reorganizations, the parties have agreed to request Lions International to authorize as soon as possible the holding of elections to choose the District Governor of District 301-D for the fiscal year 1980-81 in accordance with the Constitution and By-Laws of Lions International, and further to recommend that said elections be conducted and supervised by the Council of governors.

Finding the above-quoted Compromise Agreement to be in order, not contrary to law, public morals or public policy, the same is hereby approved.

The parties are hereby enjoined to comply strictly and in good faith as well as with sincerity and honesty of purpose the terms, conditions and stipulations therein contained.

Puig vs. Sellner 45 Phil. 286

FACTS: This litigation arose from the non-payment of a promissory note signed by the defendants, which is as follows:

On or before July 12, 1921, we promise to pay jointly and severally at Manila to the order of D.

Andres Puig or his general attorney-in-fact, D. Ramon Salinas, the sum of forty seven thousand pesos (P47,000), Philippine currency, which we received on this date from said Mr. Salinas by way of loan at 10 per cent per annum; and we hereby guarantee our said obligation with five hundred seventy (570) preferred shares of the Manila Improvement Co. of the face value of one hundred pesos (P100) each, which will be issued within fifteen (15) days in the name of Mr. Puig, who shall hold them until we fulfill this obligation. In case we fail to make payment on July 12, 1921, the shares pledged shall become the property of D. Andres Puig. — Manila, July 12, 1920.

The Honorable Geo. R. Harvey, judge, rendered a carefully prepared decision, sentencing the defendants Geo. C. Sellner and B. A. Green to pay the plaintiff jointly and severally and ordering, moreover, in the event that the defendants should fail to pay the full amount of the judgment within three (3) months from the date thereof, that the sheriff of this city proceed to sell the five hundred seventy (570) shares pledged at public auction to the highest bidder. From this judgment the defendants have appealed, and in their brief they assign seven errors, which, to our mind, can be reduced to one, namely, that numbered 2, which is as follows:

The trial court erred in not holding that the condition contained in the note, to wit, "In case we fail to make payment on July 12, 1921, the shares pledged shall become the property of D. Andres Puig,"

was valid and binding against the plaintiff, as well as against the defendants.

ISSUE: Whether or not such stipulation of appropriating pledged shares by creditor to himself in case of non-compliance by debtor is valid.

HELD: The question as to the validity of a stipulation, such as that now before us, was already decided by the supreme court of Spain in the negative.

The law does not permit the making of stipulations contrary to law, morals or public order, one of which stipulations would be, according to the general language of article 1859, that wherein it is agreed that the debtor (creditor) may appropriate the thing pledged, as if it were sold to him, by the mere lapse of the term of the contract of loan, and said stipulation being void, under article 1884 of said Code.

The creditor has no right to appropriate to himself the personal property and chattels pledged, nor he can he make payment by himself and to himself for his own credit with the value of the said

property. However, the vice of nullity which vitiates the additional agreement entered into by the contracting parties authorizing the creditor to appropriate the property and effects pledged in payment of his credit does not affect substantially the principal contract of chattel mortgage with regard to its validity and efficacy.

Judgment appealed from is affirmed.

Molina vs. Dela Riva 6 Phil. 12

FACTS: This is an action to recover a debt due upon a contract executed July 27, 1903, whereby plaintiff transferred to the defendant the abaca and coprax business theretofore carried on by him at various places in the Island of Catanduanes, with all the property and right pertaining to the said business, or the sum of 134,636 pesos and 12 cents, payable in Mexican currency or its equivalent in local currency. Defendant paid at the time of the execution of the contract, on account of the

purchase price, the sum of P33,659 pesos and 3 cents, promising to pay the balance on three installments P33,659 pesos and 3 cents each, with interest at the rate of 5 per cent per annum from the date of the contract. The first installment became due July 27, 1904. It was for the recovery of this first installment that their action was brought in the Court of First Instance of the City of Manila.

ISSUES: The appellant relies upon four assignments of error, to wit:

(1) The court had no jurisdiction of the subject of the action.

(2) The court erred in fixing in Philippine currency the sum which the appellee should recover, without hearing evidence as to the relative value of Mexican and Philippine currency.

(3) The court erred in rendering judgment in a sum larger than that sought to be recovered in the complaint.

(4) The court took into consideration as the basis of its judgment the contract in question, the same being null and void on the grounds that the contract did not bear the internal-revenue stamp required by Act No. 1045.

HELD: First. The actual residence, and not that which the parties had four years, prior to the filing of the complaint, is the one that should govern the question as to the jurisdiction of the court. Both parties to this case being residents the city of Manila, it is apparent that the Court of First Instance of that city had jurisdiction to try and determine this action. . The jurisdiction of a court is filed by law and not by the will of the parties. As a matter of public policy, parties can only stipulate in regard to that which is expressly authorized by law.

Second. Plaintiff's allegation must therefore be deemed admitted. Consequently it was not necessary for the court to hear evidence as to the relative value of Mexican and Philippine currency. There is no dispute between the parties as to the fact that the 33,659 pesos and 3 Cents, Mexican currency, referred to in the contract, were equal to 28,049 pesos and 19 centavos, Philippine currency, at the time of the filing of the complaint. The proof required by section 3 of Act No. 1045, cited by the appellant, should be received only when the parties disagree as to the relative value of the currency.

He was rather favored thereby, since he was given an option to pay in whatever currency he might see fit. It is well known that in the case of an alternative obligation the debtor has the right to choose the method of meeting the obligation unless the creditor has expressly reserved that right to himself.

Third. The court had no power to enter judgment in favor of the plaintiff for 30,052 pesos and 70 centavos, under Section 126 of the Code of Civil Procedure. We hold that this was error on the part of the trial court. The judgment of the court below should be modified in this respect.

Finally, the contract under consideration was executed July 27, 1903. Such contract was not subject to the stamp tax provided in Act No. 1045. The penalty of nullity prescribed in section 10 of the act is not applicable to that contract. The court, therefore, committed no error in finding that the absence of revenue stamp did not render the contract void.

Case remanded.

De Los Reyes vs. Alojado 16 Phil. 499

FACTS: On or about January 22, 1905, Veronica Alojado received, as a loan, from Benito de los Reyes that the sum P67 .60, for the purpose of paying a debt she owed to Olimpia Zaballa. It was

agreed between Alojado and Reyes that the debtor should remain as a servant in the house and in the service of her creditor, without any renumeration whatever, until she should find someone who would furnish her with the said sum where with to repeat the loan. The defendant, Veronica Alojado, afterwards left the house of the plaintiff, on March 12, 1906, without having paid him her debt, nor did she do so at any subsequent date, notwithstanding his demands. The plaintiff, therefore, filed suit against Veronica Alojado to recover the said sum or, in a contrary case, to compel her to return to his service. The trial court rendered judgment whereby he sentenced the defendant to pay to the plaintiff the sum claimed and declared that, in case the debtor should be insolvent, she should be obliged to fulfill the agreement between her and the plaintiff, which was reversed in favor of defendant. Hence,

agreed between Alojado and Reyes that the debtor should remain as a servant in the house and in the service of her creditor, without any renumeration whatever, until she should find someone who would furnish her with the said sum where with to repeat the loan. The defendant, Veronica Alojado, afterwards left the house of the plaintiff, on March 12, 1906, without having paid him her debt, nor did she do so at any subsequent date, notwithstanding his demands. The plaintiff, therefore, filed suit against Veronica Alojado to recover the said sum or, in a contrary case, to compel her to return to his service. The trial court rendered judgment whereby he sentenced the defendant to pay to the plaintiff the sum claimed and declared that, in case the debtor should be insolvent, she should be obliged to fulfill the agreement between her and the plaintiff, which was reversed in favor of defendant. Hence,