February 2011 Philippine Supreme Court Decisions on Civil Law

Here are selected February 2011 rulings of the Supreme Court of the Philippines on civil law:

Civil Code

Contract; damages arising from breach of contract. The Court finds that since petitioners’ complaint arose from a contract, the doctrine of proximate cause, which is relevant only in actions for quasi-delicts, finds no application to it. What applies in the present case is Article 1170 of the Civil Code which reads: “[T]hose who in the performance of their obligations are guilty of fraud, negligence or delay, and those who in any manner contravene the tenor thereof, are liable for damages.” Breach of contract is defined as the failure without legal reason to comply with the terms of a contract. It is also defined as the failure, without legal excuse, to perform any promise which forms the whole or part of the contract. As for petitioners’ claim that respondent departed from its verbal agreement with petitioners, the same fails, given that the written contract which the parties entered into the day before the event, being the law between them.  Spouses Luigi Guanio and Anna Guanio v. Makati Shangri-la Hotel and Resort, Inc.; G.R. No. 190601. February 7, 2011.

Contract; novation. There are two ways which could indicate, in fine, the presence of novation and thereby produce the effect of extinguishing an obligation by another which substitutes the same.  The first is when novation has been explicitly stated and declared in unequivocal terms.  The second is when the old and the new obligations are incompatible on every point.  The test of incompatibility is whether the two obligations can stand together, each one having its independent existence.  If they cannot, they are incompatible, and the latter obligation novates the first.  Corollarily, changes that breed incompatibility must be essential in nature and not merely accidental.  The incompatibility must take place in any of the essential elements of the obligation such as its object, cause or principal conditions thereof; otherwise, the change would be merely modificatory in nature and insufficient to extinguish the original obligation.  Carolina Hernandez-Nievera, et al. v. Wilfredo Hernandez, et al.; G.R. No. 171165. February 14, 2011.

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