Private respondents planned to travel to Los Angeles, California. They initially engaged
the services of Morelia Travel Agency (Morelia), which booked them with petitioner China Airlines Ltd (CAL). However, private respondents decided to drop the services of Morelia, as the American Express Travel Service Philippines (Amexco) offers cheaper rates, and engage the services of the latter.
Lao then called Amexco and gave the tire record locator number if booking reference that CAL had previously issued to Morelia when Morelia booked the reservations of the private respondents. In the afternoon of the same day, Amexco called up CAL to finalize private respondents' reservation for CAL's 13 June 1990 flight. Amexco used the record locator number given by Lao in confirming the reservations of private respondents. CAL confirmed the booking. Amexco then issued to private respondents the confirmed tickets for the 13 June 1990 flight of CAL. On the same day, CAL called up Morelia to reconfirm the reservations of private respondents. Morelia cancelled the reservations of private respondents.
On the day of the flight, the private respondents were not able to board the plane since their names were not on the passengers’ list. CAL cancelled the reservations when Morelia revoked the booking it had made for the private respondents. Hence this petition.
ISSUE:
Whether the petitioner is liable despite the fact that such acts complained of were acts done by its employees
HELD:
Petition DENIED.
RATIO:
The nature of an airline's contract of carriage partakes of two types, namely: (1) a contract to deliver a cargo or merchandise to its
destination, and (2) a contract to transport passengers to their destination. In this case, when CAL confirmed the reservations, it bound itself to transport private respondents on its flight on 13 June 1990.
The airline business is intended to serve the traveling public primarily and is thus imbued with public interest.The law governing common carriers consequently imposes an exacting standard. Thus, in an action based on a breach of contract of carriage, the aggrieved party does not have to prove that the common carrier was at fault or was negligent. All that he has to prove is the existence of the contract and the fact of its non-performance by the carrier.
CAL does not deny its confirmation of the reservations made by Amexco. The confirmed tickets issued by Amexco to private respondents upon CAL's confirmation of the reservations are undeniable proof of the contract of carriage between CAL and private respondents. In Alitalia Airways v. CA, et al., we held that when an airline issues a ticket to a passenger confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger then has every right to expect that he would fly on that flight and on that date. If he does not, then the carrier opens itself to a suit for breach of contract of carriage.
CAL did not allow private respondents, who were then in possession of the confirmed tickets, from boarding its airplane because their names were not in the passengers' manifest. Clearly, CAL breached its contract of carriage with private respondents. We, however, rule out bad faith by CAL.
SPOUSES SALERA vs SPOUSES RODAJE G.R. No. 135900 17 August 2007 Ponente: Justice Sandoval – Gutierrez, First Division
Facts: Spouses Salera filed an action for quieting of title regarding a parcel of land in Brgy. Basud, San Isidro, Leyte. The land was bought from the heirs of Brigido Tonacio as
evidenced by the Deed of Absolute Sale executed on June 23, 1986. They allege that they have been in possession of the property and the house they built thereon because they had paid the purchase price even before the execution of the deed of sale. When they asked the Provincial Assessor to declare the property under their names for taxation purposes, they found that Tax Declaration No. 2994 (R-5) in the name of Brigido was already cancelled and another one, Tax Declaration No. 2408, was issued in the names of Spouses Rodaje.
Spouses Rodaje claimed that they bought the land from Catalino Tonacio, father of Brigido on June 6, 1986 and that the sale was registered with the Register of Deeds and the Tax Declaration No. 2408 was issued in their name. They also claimed that they had a verbal contract with Catalino even before the execution of the sale since January 1984. They paid a downpayment of P1,000 and paid the balance of P4,000 when the sale was executed. They allege that they been in exercising their right of ownership over the property and the building constructed thereon peacefully, publicly, adversely and continuously. Apart from being the first registrants, they are buyers in good faith.
RTC of Calubian, Leyte declared Spouses Salera as the rightful and legal owners while declaring null and void the Deed of Absolute Sale between Catalino and herein respondents and ordering the cancellation of Tax Declaration No. 2408 issued. The court cited that the real owners of the land, by operation of the law on succession would be the heirs of Brigido and not his father. Catalino had no legal personality to sell the parcel of land.
The Court of Appeals reversed and set aside the decision of the RTC. It based its decision on the Civil Code provision on double sale.
Issue: Which of the two contracts of sale is valid?
Held: Sale made by the heirs of Brigido Tonacao to the spouses Salera is valid. Sale made by Catalino to spouses Rodaje is invalid. The Court of Appeals is wrong. Article 1544 of the Civil Code contemplates a case of double sale or multiple sales by a single vendor. More specifically, it covers a situation where a
single vendor sold one and the same immovable property to two or more buyers. Art. 1544 does not apply in this case since the sale was made by Catalino and the heirs of Brigido.
Bad faith was established in the RTC. The evidence submitted to the court, established that Spouses Rodaje knew beforehand that the property was declared in the name of Brigido Tonacao for taxation purposes. Any lot buyer is expected to be vigilant, exercising utmost care in determining whether the seller is the true owner of the property and whether there are other claimants. There is no indication from the record that Rodaje first determined the status of the lot.
While tax declarations are not conclusive proofs of ownership, however, they are good indicia of possession in the concept of owner, for no one in his right mind would be paying taxes for a property that is not in his actual or at least constructive possession. Hence, Catalino, not being the owner or possessor, could not validly sell the lot to respondents.
The certification presented by respondents clearly shows that the house is owned by Aida Salera and that respondents started paying the electric bills (in the name of Aida Salera) only in 1986. The respondents proof of payment of realty tax from the period of 1974 to 1984 was paid in lump sum.
(Petition is GRANTED. The assailed Decision of the Court of Appeals is REVERSED and the Decision of the trial court is REINSTATED.)
URACA, et al. vs CA and VELEZ, JR., et al. G.R. No. 115158 September 5,
1997
Ponente: Justice Panganiban, Third Division Facts: The Velezes were the owners of the lot and commercial building in question located at Progreso and M.C. Briones Streets in Cebu City. The petitioners were its lessees.
On July 8, 1985, the Velezes through Carmen Velez Ting wrote a letter to petitioners offering to sell the subject property for P1,050,000.00 and to reply within three days. Petitioners, through counsel, accepted the offer.
When Uraca went to Ting, Ting told her that there was a mistake in the price. It should have been P1.4M, Uraca agreed to the new price to be payable in installments with a down payment of P1M and the balance of P400,000 to be paid in 30 days. Carmen Velez Ting did not accept the said counter-offer of Emilia Uraca although this fact is disputed by Uraca.
No payment was made by to the Velezes on July 12 and 13, 1985. On July 13, 1985, the Velezes sold property to Avenue Merchandising Inc. for P1,050,000.00. The certificate of title of the said property was clean and free of any annotation of adverse claims or lis pendens. On July 31, 1985, petitioners filed the instant complaint against the Velezes. On August 1, 1985, they also registered a notice of lis pendens over the property in question with the Office of the Register of Deeds.
On October 30, 1985, the Avenue Group filed an ejectment case against petitioners ordering the latter to vacate the commercial building standing on the lot in question.
Petitoners filed an amended complaint impleading the Avenue Group as new defendants after about 4 years after the filing of the original complaint.
RTC found two perfected contracts of sale between the Velezes and the petitioners involving the real property in question. The first sale was for P1,050,000.00 and the second was for P1,400,000.00. In respect to the first sale, the trial court held that "[d]ue to the unqualified acceptance by the plaintiffs within the period set by the Velezes, there consequently came about a meeting of the minds of the parties not only as to the object certain but also as to the definite consideration or cause of the contract. The second sale merely constituted a mere modificatory novation which did not extinguish the first sale. It also held that the Avenue Group were buyers in bad faith.
The Court of Appeals held that there was a
perfected contract of sale of the property for P1,050,000.00 between the Velezes and herein petitioners. It added, however, that such perfected contract of sale was subsequently novated. However, it was mutually withdrawn, cancelled and rescinded by novation, and was therefore abandoned by the parties when Carmen Velez Ting raised the consideration of the contract by P350,000.00, thus making the price P1.4M instead of the original price of P1,050,000.00. Since there was no agreement as to the 'second' price offered, there was no meeting of minds between the parties, hence, no contract of sale was perfected.
CA added that, even if there was agreement as to the price and a second contract was perfected, the later contract would be unenforceable under the Statute of Frauds. It further held that such second agreement, if there was one, constituted a mere promise to sell which was not binding for lack of acceptance or a separate consideration.
Issues:
1.) Was there novation of the first contract? 2.) Was there a double sale of the real
property involved? Held:
On Novation
Novation is never presumed; it must be sufficiently established that a valid new agreement or obligation has extinguished or changed an existing one. The registration of a later sale must be done in good faith to entitle the registrant to priority in ownership over the vendee in an earlier sale.
Article 1600 of the Civil Code provides that "(s)ales are extinguished by the same causes as all other obligations, . . . ." Article 1231 of the same Code states that novation is one of the ways to wipe out an obligation. Extinctive novation requires: (1) the existence of a previous valid obligation; (2) the agreement of all the parties to the new contract; (3) the extinguishment of the old obligation or contract; and (4) the validity of the new one.
Novation is effected only when a new contract has extinguished an earlier contract between the same parties. It must be proven as a fact either
by express stipulation of the parties or by implication derived from an irreconcilable incompatibility between old and new obligations or contracts.
The petitioners and the Velezes clearly did not perfect a new contract because the essential requisite of consent was absent, the parties having failed to agree on the terms of the payment. Since the parties failed to enter into a new contract that could have extinguished their previously perfected contract of sale, there can be no novation of the latter. Consequently, the first sale of the property in controversy, by the Velezes to petitioners for P1,050,000.00, remained valid and existing.
On Double Sale
Prior registration of the disputed property by the second buyer does not by itself confer ownership or a better right over the property. Article 1544 requires that such registration must be coupled with good faith.
Knowledge gained by the first buyer of the second sale cannot defeat the first buyer's rights except where the second buyer registers in good faith the second sale ahead of the first, as provided by the Civil Code.
Knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register the second sale, since such knowledge taints his prior registration with bad faith (Art. 1544).
The Avenue Group was a buyer and registrants in bad faith. They had actual knowledge of the Velezes' prior sale of the same property to the petitioners.
Hence, the third and not the second paragraph of Article 1544 should be applied to this case. Under this provision, petitioners are entitled to the ownership of the property because they were first in actual possession, having been the property's lessees and possessors for decades prior to the sale.
(The petition is GRANTED. The assailed Decision of the Court of Appeals is hereby SET ASIDE and the dispositive portion of the trial court's decision dated October 19, 1990 is REVIVED with the following MODIFICATION —
the consideration to be paid under par. 2 of the disposition is P1,050,000.00 and not P1,400,000.00.)
BINALBAGAN TECH., INC. vs. COURT OF APPEALS
G.R. No. 100594 March 10, 1993 (219SCRA777)
Third Division MELO, J.:
Facts: On May 11, 1967, private respondents, through Angelina P. Echaus, in her capacity as Judicial Administrator of the intestate estate of Luis B. Puentevella, executed a Contract to Sell and a Deed of Sale of 42 subdivision lots within the Phib-Khik Subdivision of the Puentevella family, conveying and transferring said lots to petitioner Binalbagan Tech., Inc. In turn Binalbagan, through its president, petitioner Hermilo J. Nava, executed an Acknowledgment of Debt with Mortgage Agreement, mortgaging said lots in favor of the estate of Puentevella.
Upon the transfer to Binalbagan of titles to the 42 subdivision lots, said petitioner took possession of the lots and the building and improvements thereon. Binalbagan started operating a school on the property from 1967 when the titles and possession of the lots were transferred to it.
There was a pending case involving the said property. The intestate estate of the late Luis B. Puentevella sold said lots to Raul Javellana with the condition that the vendee- promisee would not transfer his rights to said lots without the express consent of Puentevella and that in case of the cancellation of the contract by reason of the violation of any of the terms thereof, all payments therefore made and all improvements introduced on the property shall pertain to the promissor and shall be considered as rentals for the use and occupation thereof. Javellana having failed to pay the installments for a period of five years, the case was filed by defendant Puentevella against him. Judgment was rendered in favor of Puentevella. Plaintiffs in the instant case on appeal filed their Third- Party Claim based on an alleged Deed of Sale executed in their favor by spouses Jose and Lolita Lopez, thus Puentevella was constrained to assert physical possession of the premises to counteract the fictitious and unenforceable claim of herein plaintiffs. CA issued a writ of preliminary injunction, thus, defendant Puentevella was restored to the possession of the lots and buildings subject of this case. Plaintiffs filed a petition for review with the Supreme Court which issued a restraining order against the sale of the properties claimed by the spouses-plaintiffs [in Abierra vs. Court of Appeals, 45 SCRA 314].
When the Supreme Court dissolved the aforesaid injunction issued by the Court of Appeals, possession of the building and other property was taken from petitioner Binalbagan and given to the third-party claimants, the de la Cruz spouses. Petitioner Binalbagan transferred its school to another location.
After petitioner Binalbagan was again placed in possession of the subdivision lots, private respondent Angelina Echaus demanded payment from petitioner Binalbagan for the subdivision lots, enclosing in the letter of demand a statement of account as of September 1982 showing a total amount due of P367,509.93, representing the price of the land and accrued interest as of that date.
As petitioner Binalbagan failed to effect payment, Echaus filed on October 8, 1982 Civil Case No. 1354 with the RTC in Himamaylan, Negros Occidental against petitioners for recovery of title and damages. Echaus filed an amended complaint by including her mother, brothers, and sisters as co-plaintiffs.
The trial court rendered a decision in favor of the defendants.
Private respondents appealed to the CA which reversed and set aside the appealed decision.
Thus, this petition for review on certiorari wherein petitioners assign the following alleged errors of the Court of Appeals:
Issue: Whether private respondents' cause of action in Civil Case No. 1354 is barred by prescription.
Ruling: Petition is DENIED and the decision of the Court of Appeals in CA-G.R. CV No. 24635 is AFFIRMED.
A party to a contract cannot demand performance of the other party's obligations unless he is in a position to comply with his own obligations. Similarly, the right to rescind a contract can be demanded only if a party thereto is ready, willing and able to comply with his own obligations thereunder (Art. 1191, Civil Code; Seva vs. Berwin, 48 Phil. 581 [1926]; Paras,
Civil Code of the Philippines, 12th ed. Vol. IV, p. 200). In a contract of sale, the vendor is bound to transfer the ownership of and deliver, as well as warrant, the thing which is the object of the sale (Art. 1495, Civil Code); he warrants that the buyer shall, from the time ownership is passed, have and enjoy the legal and peaceful possession of the thing -
Art. 1547. In a contract of sale, unless a contrary intention appears, there is:
(1) An implied warranty on the part of the seller that he has a right to sell the thing at the time when the ownership is to pass, and that the buyer shall from that time have and enjoy the legal and peaceful possession of the thing.
The period of prescription was interrupted, because from 1974 up to 1982, the appellants themselves could not have restored unto the appellees the possession of the 42 subdivision lots precisely because of the preliminary injunction mentioned elsewhere. Consequently, the appellants could not have prospered in any suit to compel performance or payment from the appellees-buyers, because the appellants themselves were in no position to perform their own corresponding obligation to deliver to and maintain said buyers in possession of the lots subject matter of the sale.
ROBERTO Z. LAFORTEZA vs. ALONZO MACHUCA
G.R. No. 137552. June 16, 2000 (333SCRA643) Third Division
GONZAGA_REYES, J.