August 2009 Philippine Supreme Court Decisions on Civil Law

Here are selected August 2009 Philippine Supreme Court decisions on civil law:

Contracts;  binding effect.  As a general rule, obligations derived from a contract are transmissible (see Article 1311, par.1 of the Civil Code).  The loan in this case was contracted by respondent. He died while the case was pending before the Court of Appeals. While he may no longer be compelled to pay the loan, the debt subsists against his estate. No property or portion of the inheritance may be transmitted to his heirs unless the debt has first been satisfied.  William Ong Genato vs. Benjamin Bayhon, et al., G.R. No. 171035, August 24, 2009.

Contracts;  breach.  CCC defaulted in the payment of its obligation to FILSYSTEMS under the Compromise Agreement. On the other hand, FILSYSTEMS was not in default; however, considering that it failed to perform the obligation incumbent upon it under the Compromise Agreement, it must be held liable for the cost of completion of the unfinished portion of the project.  Continental Cement Corp., vs. Filipinas (PREFAB) Systems, Inc./Filipinas (PREFAB) Systems, inc. vs. Continental Cement Corp., G.R. No. 176917/G.R. No. 176919, August 4, 2009.

Contracts; due and demandable obligations.  Petitioner does not deny that she obtained a loan from respondent. She, however, contends that the loan is not yet due and demandable because the suspensive condition – the completion of the renovation of the apartment units – has not yet been fulfilled. She also assails the award of attorney’s fees to respondent as baseless.

For his part, respondent admits that initially, they agreed that payment of the loan shall be made upon completion of the renovations. However, respondent claims that during their meeting with some family members in the house of their brother Genaro sometime in the second quarter of 1997, he and petitioner entered into a new agreement whereby petitioner was to start making monthly payments on her loan, which she did from June to October of 1997. 

Evidently, by virtue of the subsequent agreement, the parties mutually dispensed with the condition that petitioner shall only begin paying after the completion of all renovations. There was, in effect, a modificatory or partial novation, of petitioner’s obligation under Article 1291 of the Civil Code. Maria Soledad Tomimbang vs. Atty. Jose Tomimbang, G.R. No. 165116, August 4, 2009.

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