Primitivo Ansay, etc., et al. vs. The Board of Directors of National Development Company, et al.

Primitivo Ansay, etc., et al. vs. The Board of Directors of National Development Company, et al.

G.R. No. L-13667. April 29, 1960.

Facts:

On July 25, 1956, appellants filed against appellees in the Court of First Instance of Manila a complaint praying for a 20% Christmas bonus for the years 1954 and 1955. The court a quo on appellees' motion to dismiss, issued that “considering the motion to dismiss filed on 15 August, 1956, set for this morning; considering that at the hearing thereof, only respondents appeared thru counsel and there was no appearance for the plaintiffs although the court waited for sometime for them; considering, however, that petitioners have submitted an opposition which the court will consider together with the arguments presented by respondents and the Exhibits marked and presented, namely, Exhibits 1 to 5, at the hearing of the motion to dismiss; considering that the action in brief is one to compel respondents to declare a Christmas bonus for petitioners workers in the National Development Company; considering that the Court does not see how petitioners may have a cause of action to secure such bonus because:

"(a)A bonus is an act of liberality and the court takes it that it is not within its judicial powers to command respondents to be liberal;

"(b)Petitioners admit that respondents are not under legal duty to give such bonus but that they had only ask that such bonus be given to them because it is a moral obligation of respondents to give that but as this Court understands, it has no power to compel a party to comply with a moral obligation (Art. 142, New Civil Code).

"IN VIEW WHEREOF, dismissed. No pronouncement as to costs."

A motion for reconsideration of the afore-quoted order was denied. Hence this appeal.

Issue:

            Whether or not the contention of the appellants that there exists a cause of action in their complaint because their claim rests on moral grounds or what in brief is defined by law as a natural obligation.

Held:

         No. Since appellants admit that appellees are not under legal obligation to give such claimed bonus; that the grant arises only from a moral obligation or the natural obligation that they discussed in their brief, the Supreme Court feels it urgent to reproduce at this point, the definition and meaning of natural obligation.

Article 1423 of the New Civil Code classifies obligations into civil or natural. "Civil obligations are a right of action to compel their performance. Natural obligations, not being based on positive law but on equity and natural law, do not grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by reason thereof"

It is thus readily seen that an element of natural obligation before it can be cognizable by the court is voluntary fulfillment by the obligor. Certainly retention can be ordered but only after there has been voluntary performance. But here there has been no voluntary performance. In fact, the court cannot order the performance.

Victoria Moreño-Lentfer, et al. vs. Hans Jurgen Wolff

Victoria Moreño-Lentfer, et al. vs. Hans Jurgen Wolff

G.R. No. 152317. November 10, 2004.

Facts:
            The petitioners are Gunter Lentfer, a German citizen; his Filipina wife, Victoria Moreño-Lentfer; and John Craigie Young Cross, an Australian citizen, all residing in Sabang, Puerto Galera, Oriental Mindoro. Respondent Hans Jurgen Wolff is a German citizen, residing in San Lorenzo Village, Makati City.
            Petitioners alleged that with respondent, on March 6, 1992, they engaged the notarial services of Atty. Rodrigo C. Dimayacyac for: (1) the sale of a beach house owned by petitioner Cross in Sabang, Puerto Galera, Oriental Mindoro, and (2) the assignment of Cross' contract of lease on the land where the house stood. The sale of the beach house and the assignment of the lease right would be in the name of petitioner Victoria Moreño-Lentfer, but the total consideration of 220,000 Deutschmarks (DM) would be paid by respondent Hans Jurgen Wolff. A promissory note was executed by said respondent in favor of petitioner Cross.

According to respondent, however, the Lentfer spouses were his confidants who held in trust for him, a time deposit account in the amount of DM 200,000 at Solid Bank Corporation. Apprised of his interest to own a house along a beach, the Lentfer couple urged him to buy petitioner Cross' beach house and lease rights in Puerto Galera. Respondent agreed and through a bank-to-bank transaction, he paid Cross the amount of DM 221,700 as total consideration for the sale and assignment of the lease rights.

However, Cross, Moreño-Lentfer and Atty. Dimayacyac surreptitiously executed a deed of sale whereby the beach house was made to appear as sold to Moreño-Lentfer for only P100,000. The assignment of the lease right was likewise made in favor of Moreño-Lentfer. Upon learning of this, respondent filed a Complaint docketed as Civil Case No. R-4219 with the lower court for annulment of sale and reconveyance of property with damages and prayer for a writ of attachment.

Issue:
            Whether or not the principle of solutio indebiti is applicable in this case.

Held:
            Yes. The Supreme Court held that the payment made by Cross was a mistake. The quasi-contract of solutio indebiti harks back to the ancient principle that no one shall enrich himself unjustly at the expense of another. It applies where a payment is made when there exists no binding relation between the payor, who has no duty to pay, and the person who received the payment, and the payment is made through mistake, and not through liberality or some other cause.

            The records show that a bank-to-bank payment was made by respondent Wolff to petitioner Cross in favor of co-petitioner Moreño-Lentfer. Respondent was under no duty to make such payment for the benefit of Moreño-Lentfer. There was no binding relation between respondent and the beneficiary, Moreño-Lentfer. The payment was clearly a mistake. Since Moreño-Lentfer received something when there was no right to demand it, she had an obligation to return it.

Nestle Philippines, Inc. vs. Court of Appeals

Nestle Philippines, Inc. vs. Court of Appeals

G.R. No. 134114. July 6, 2001.

Facts:

Petitioner Nestle Philippines, Inc. transacted sixteen separate importations of milk and milk products from different countries between the period of July and November 1984. It paid the corresponding customs duties and advance sales taxes to the Collector of Customs of Manila for each transaction based on the published Home Consumption Value (HCV) as indicated in the Bureau of Customs Revision Orders, but it seasonably filed the corresponding protests before the said Collector of Customs. In the said protests, petitioner claimed for the refund of the alleged overpaid import duties and advance sales taxes. With regards to the advance sales taxes, the Court of Tax Appeals eventually ruled in favor of the petitioner. However, the Collector of Customs failed to render a decision on the sixteen protest cases for almost six years for the alleged overpaid customs duties. In order to prevent the claims from becoming stale on the ground of prescription, petitioner immediately filed a petition for review with the Court of Tax Appeals (CTA). The CTA dismissed the said petition for want of jurisdiction. The issue was raised to the Court of Appeals by way of petition for review, but it was also dismissed for failure to exhaust administrative remedies.

Issue:
            Whether or not the petitioner’s claims are governed by the rule on quasi-contracts or solutio indebiti which prescribes in six (6) years under Article 1145 of the New Civil Code.

Held:

No. The Supreme Court ruled that the rule on quasi-contracts or solution indebiti is not applicable in this case. In order for the rule on solution indebiti to apply, it is an essential condition that petitioner must first show that its payment of the customs duties was in excess of what was required by the law at the time when the subject sixteen importations of milk and milk products were made. Unless shown otherwise, the disputable presumption of regularity of performance of duty lies in favor of the Collector of Customs.

In the present case, there is no factual showing that the collection of the alleged overpaid customs duties was more than what is required of the petitioner when it made the aforesaid separate importations. There is no factual finding yet by the government agency concerned that petitioner is indeed entitled to its claim of overpayment and, if true, for how much it is entitled. It bears stress that in determining whether or not petitioner is entitled to refund of alleged overpayment of customs duties, it is necessary to determine exactly how much the Government is entitled to collect as customs duties on the importations. Thus, it would only be just and fair that the petitioner-taxpayer and the Government alike be given equal opportunities to avail of the remedies under the law to contest or defeat each other's claim and to determine all matters of dispute between them in one single case. If the State expects its taxpayers to observe fairness and honesty in paying their taxes, so must it apply the same standard against itself in refunding excess payments, if truly proven, of such taxes. Indeed, the State must lead by its own example of honor, dignity and uprightness.

Thus, the remand of this case to the CTA is warranted for the proper verification and determination of the factual basis and merits of the petition and in order that the ends of substantial justice and fair play may be subserved. In the light of Sections 2308 and 2309 of the Tariff and Customs Code, it appeared that in all cases subject to protest, the claim for refund of customs duties may be foreclosed only when the interested party claiming refund fails to file a written protest before the Collector of Customs. Accordingly, once a written protest is seasonably filed with the Collector of Customs the failure or inaction of the latter to promptly perform his mandated duty under the Tariff and Customs Code should not be allowed to prejudice the right of the party adversely affected thereby. Technicalities and legalisms, however exalted, should not be misused by the government to keep money not belonging to it, if any is proven, and thereby enrich itself at the expense of the taxpayers.

Teofisto Guingona, Jr. vs. PCGG

Teofisto Guingona, Jr. vs. PCGG

G.R. No. 96087 March 31, 1992.

Facts:

On June 30, 1987, the PCGG filed in the Sandiganbayan Civil Case No. 0034, entitled "Republic of the Philippines vs. Roberto S. Benedicto, Spouses Ferdinand and Imelda Marcos, et al." to recover from the defendants (including Roberto S. Benedicto) their ill-gotten wealth consisting of funds and other property which they amassed through breach of trust and abuse of the prerogatives of public office, and in violation of the Constitution and the laws of the land.

On November 3, 1990, the PCGG, through its chairman, David M. Castro, executed a Compromise Agreement with Roberto S. Benedicto ceding to the latter a substantial part of his ill-gotten assets and granting him immunity from further prosecution. On November 25, 1990, the compromise agreement was submitted by the parties to the Sandiganbayan for approval.

On November 29, 1990, the Court directed the PCGG to comment on the petition and issued a Temporary Restraining Order to cease and desist from implementing and enforcing the assailed Compromise Agreement.

Commenting on the petition, the PCGG alleged that the rationale for the Compromise Agreement was the Government's desire to immediately accomplish its recovery mission and Mr. Benedicto's desire to lead a peaceful and normal life. Toward this end, the parties decided to withdraw and/or dismiss their mutual claims and counterclaims in the cases pending in the Philippines. The PCGG's authority to enter into compromises involving ill-gotten wealth and to grant immunity in civil and criminal cases had been challenged before, but it was sustained by this Court in "Republic of the Philippines and Jose Campos, Jr. vs. Sandiganbayan, et al." G.R. No. 84895, May 4, 1989, 173 SCRA 72).

On January 15, 1991, this Court granted the PCGG's motion to suspend consideration by the Sandiganbayan of the "Joint Motion to Approve Compromise Agreement" filed in that court by the PCGG and Benedicto.

The petitioner filed a reply to the comment stating that the issue in this case is not the basic authority of the Commission to enter into a compromise settlement of the liabilities and accountabilities of the Marcoses, but the legality of the Compromise Agreement with Benedicto which, according to the petitioner, was entered into by the Commission without and beyond its lawful authority and with grave abuse of discretion, for it grants Benedicto final, total, and irrevocable immunity from criminal prosecution, sans compliance with the specific conditions imposed therefor by Section 5 of Executive Order No. 14, as amended, in relation to Executive Order No. 2

Issue:
            Whether or not the Compromise Agreement with Benedicto which was entered into by the PCGG is beyond the latter’s lawful authority and with grave abuse of discretion.

Held:
            No. the Supreme Court held that the petition in this case has no merit. The right of parties in a civil action to enter into a compromise for the purpose of avoiding litigation or putting an end to one already commenced is indisputable. The settlement of civil cases in court is authorized and even encouraged by law (Arts. 2028 and 2029, Civil Code). Although there is no similar general rule in criminal prosecutions, that "in the absence of an express prohibition, the rule on amicable settlements and/or compromises on civil cases under the Civil Code is applicable to PCGG cases.”

In the light of this ruling, and in view of the reorganization of the Boards of Directors of RPN, IBC and BBC television stations to administer and manage those sequestered Broadcast City companies, the authority of the Board of Administrators as "trustee and officious manager" of the same corporations, has become functus oficio. In negotiorum gestio, the authority of the officious manager of a property or business is extinguished when the owner demands the return of the same (Art. 2153, Civil Code). With the reorganization of the respective Boards of Directors of the Broadcast City companies, where PCGG controls 2/3 of the board membership, the Board of Administrators has become a supernumerary. The reason for its existence has ceased. This view is bolstered by the fact that Broadcast City is not a purely commercial venture but a media enterprise covered by the freedom of the press provision of the Constitution, and that under our ruling in Liwayway Publishing, Inc., et al. vs. PCGG, et al. (160 SCRA 716), the Government, through the PCGG, may not lawfully intervene and participate in the management and operations of a private mass media to maintain its freedom and independence as guaranteed by the Constitution (Art. XVI, Sec. 11, 1987 Constitution)

Manuel Torres, Jr. vs Court of Appeals

Manuel Torres, Jr. vs Court of Appeals

G.R. No. 120138. September 5, 1997.

Facts:

Petitioner, the late Judge Torres, was the majority stockholder of Tormil Realty & Development Corporation (Tormil), while private respondents, his nieces and nephews, were the minority stockholders. To make substantial savings in taxes, Judge Torres adopted an "estate planning" scheme assigning to Tormil several of his personal and real properties. In turn, Tormil issued 225,000 of its unissued shares in exchange for his properties in the cities of Manila, Quezon, Makati and Pasay. However, Judge Torres unilaterally revoked two deeds of assignment covering the properties in Makati and Pasay for failure of Tormil to issue the remaining balance of 972 shares. Due to the disappearance of the Makati and Pasay properties from the corporation's inventory of assets and financial records, private respondent filed a complaint with the SEC to compel Judge Torres to deliver to the corporation the two deeds of assignment.

Another controversy involving the parties was the election of the 1987 corporate board of directors. During the stockholders meeting, petitioner Pabalan and company were nominated and elected members of the Board after Judge Torres made an assignment of one share to each of them from his own shares. Said assignments were recorded in the stock and transfer book of the corporation. Private respondents, claiming they were denied their right to pre-emption, filed a complaint with the Securities and Exchange Commission (SEC). The Panel of Hearing Officers of the SEC ruled in favor of private respondents and declared null and void the election and appointment of the members of the board. During the pendency of the appeal to the SEC en banc, Judge Torres died. Notice of his death was brought to the attention of the SEC by private respondents. Petitioners then filed a motion to suspend proceedings on the ground that there was no administrator or legal representative of Judge Torres' estate appointed by the court. The SEC En Banc denied said motion, and thereafter rendered judgment affirming the assailed decision. On appeal, the Court of Appeals, without requiring the transmission of the original records of the proceedings before the SEC, dismissed the appeal.

Issue:

Whether or not the decision of the SEC and the Court of Appeals are null and void for being rendered without the necessary substitution of parties, for the deceased petitioner Manuel A. Torres, Jr, when it is sought to justify the non-substitution by its application of the concept of negotiorun gestio.

Held:

No. The Supreme Court held that the concept of negotiorum gestio is not applicable in this case. Said principle explicitly covers abandoned or neglected property or business. Petitioners insist that the SEC en banc should have granted the motions to suspend they filed based as they were on the ground that the Regional Trial Court of Makati, where the probate of the late Judge Torres' will was pending, had yet to appoint an administrator or legal representative of his estate. As early as 8 April 1988, Judge Torres instituted Special Proceedings No. M-1768 before the Regional Trial Court of Makati for the ante-mortem probate of his holographic will which he had executed on 31 October 1986. Testifying in the said proceedings, Judge Torres confirmed his appointment of petitioner Edgardo D. Pabalan as the sole executor of his will and administrator of his estate. The proceedings, however, were opposed by the same parties, herein private respondents Antonio P. Torres, Jr., Ma. Luisa T. Morales and Ma. Cristina T. Carlos, who are nephew and nieces of Judge Torres, being the children of his late brother Antonio A. Torres.

It can readily be observed therefore that the parties involved in the present controversy are virtually the same parties fighting over the representation of the late Judge Torres' estate. It should be recalled that the purpose behind the rule on substitution of parties is the protection of the right of every party to due process. It is to ensure that the deceased party would continue to be properly represented in the suit through the duly appointed legal representative of his estate. In the present case, this purpose has been substantially fulfilled (despite the lack of formal substitution) in view of the peculiar fact that both proceedings involve practically the same parties. Both parties have been fiercely fighting in the probate proceedings of Judge Torres' holographic will for appointment as legal representative of his estate. Since both parties claim interests over the estate, the rights of the estate were expected to be fully protected in the proceedings before the SEC en banc and the Court of Appeals. In either case, whoever shall be appointed legal representative of Judge Torres' estate (petitioner Pabalan or private respondents) would no longer be a stranger to the present case, the said parties having voluntarily submitted to the jurisdiction of the SEC and the Court of Appeals and having thoroughly participated in the proceedings.

It is appropriate to mention here that when Judge Torres died on April 3, 1991, the SEC en banc had already fully heard the parties and what remained was the evaluation of the evidence and rendition of the judgment. Further, petitioners filed their motions to suspend proceedings only after more than two (2) years from the death of Judge Torres. Petitioners' counsel was even remiss in his duty under Sec. 16, Rule 3 of the Revised Rules of Court. Instead, it was private respondents who informed the SEC of Judge Torres' death through a manifestation dated 24 April 1991.

For the SEC en banc to have suspended the proceedings to await the appointment of the legal representative by the estate was impractical and would have caused undue delay in the proceedings and a denial of justice. There is no telling when the probate court will decide the issue, which may still be appealed to the higher courts.

In any case, there has been no final disposition of the properties of the late Judge Torres before the SEC. On the contrary, the decision of the SEC en banc as affirmed by the Court of Appeals served to protect and preserve his estate. Consequently, the rule that when a party dies, he should be substituted by his legal representative to protect the interests of his estate in observance of due process was not violated in this case in view of its peculiar situation where the estate was fully protected by the presence of the parties who claim interests therein either as directors, stockholders or heirs.