Dela Cruz v Concepcion (Civil Procedure)

Digest # 1

Dela Cruz v Concepcion
GR No. 172825, October 11, 2012

FACTS:

On March 25, 1996, petitioners entered into a Contract to Sell with respondent involving a house and lot in Antipolo City for a 2 million consideration.

Respondent made the following payments, to wit:
(1) 500,000 by way of downpayment;
(2) 500,000 on May 30, 1996;
(3) 500,000 paid on January 22, 1997; and
(4) 500,000 bounced check dated June 30, 1997 which was replaced.
Thus, Respondent was able to pay the 2 million total obligation.

Before respondent issued the 500,000 replacement check, she told petitioners that based on the computation of her accountant as of July 6, 1997, her unpaid obligation which includes interests and penalties was only 200,000. Petitioners agreed with respondent. Despite repeated demands, petitioners failed to collect the amounts they claimed. Hence, the complaint for sum of money with damages filed with the RTC of Antipolo Rizal. In her answer with Compulsory counterclaim and during the presentation of evidence, respondent presented a receipt purportedly indicating payment of the remaining balance of 200,000 to Losloso who allegedly received the same on behalf of petitioners.

On March 8, 2014, the RTC rendered a decision in favor of respondent. On appeal, the CA affirmed the decision with modification by deleting the award of moral damages and attorney's fees in favor of respondent. Aggrieved, petitioners come before the Court in this petition for review on certiorari under Rule 45.

ISSUE:
Whether it was proper to dismiss the complaint based on the ground that the defendant fully paid the claims of plaintiff

HELD:
Yes.

When the issue is tried without the objection of the parties, it should be treated with all respects as if it had been raised in the pleadings. On the other hand, when there is an objection, the evidence may be admitted where its admission will not prejudice him.

Thus, while respondent judicially admitted in her answer that she only paid 2 million and that she still owed petitioners 200,000, respondent claimed later and in fact, submitted an evidence to show that she already paid the whole amount of her unpaid obligation. It is noteworthy what when respondent presented evidence of payment, petitioners did not object thereto.

To be sure, petitioners were given ample opportunity to refute the fact of and present evidence to prove payment.

Digest # 2

Local and Transitory Actions

Cayetano De La Cruz v. El Seminario De La Cruz Archdiocese of Manila, et. al.

Facts:

·       Petitioner is a member and the President of Methodist Episcopal religious association in Dinalupijan, Bataan;

·       The said religious association, through Petitioner, entered into a lease with Respondent, through its agent, J.C. Miller;

·       The purpose of the lease was for the association to construct a chapel thereon; the lease was for two years;

·       Just when the chapel was completed, an action for forcible entry and unlawful detainer was filed by respondent in the Justice of the Peace of Dinalupijan;

·       Consequently, Judgment was rendered against Petitioners;

·       Since no appeal was taken and the judgment becoming final, it was executed in a manner that the chapel was completely destroyed;

·       Subsequent thereto, Petitioner commenced an action in the CFI of Manila against the appellants to recover the sum of P2,000.00 as damages for a breach of the rental contract;

·       Respondents filed a demurrer based on the ground that the City of Manila was without jurisdiction for the reason that damages for injuries caused to real property situated in the Province of Bataan is sought to be recovered; therefore, Bataan should have jurisdiction;

Lower court decisions:

CFI of Manila: Overruled the demurrer and rendered judgment in favor of Petitioner

*Respondents moved for new trial but such motion was overruled

Issue: WON the demurrer was improperly overruled because the CFI of Manila has no jurisdiction

Ruling: No, the demurrer was properly overruled.

This is not an action to recover damages to real estate; it is an action for breach of covenant in a lease. The fact that the damage to real estate are involved, as an incident to the breach of contract, does not change the character of the action. Such an action is personal and transitory.

If the action is founded on the privity of contract between the parties, the action is transitory whether it is a debt or a covenant. But if there is no privity of contract and the action is founded on privity of estate only, such a covenant runs with the land in the hands of the remote grantees, then the action is local and must be brought in the county wherein the land lies.

In an action on a covenant contained in a lease, whether begun by the lessor against the lessee, or the lessee against the lessor, the action is transitory because it is founded on a mere privity of contract.

In general also, actions which are founded upon contracts are transitory. In an action upon a lease for nonpayment of rent or other breach of covenants, when the action is founded on the privity of contract, it is transitory and the venue may be laid in any county.

Therefore, respondents’ basis that section 377 of the Code of Civil Procedure applies, which provides among others, that actions to recover damages for injuries to real estate shall be brought in the province where the land, or a part thereof, is situated, is not tenable.

Planters Development Bank v Chandumal (Civil Procedure)

Planters Development Bank v Chandumal
GR No. 195619, September 5, 2012

FACTS:

BF Homes, Inc. and Chandumal entered into a contract to sell a parcel of land. BF Homes then sold to PDB all its rights and interests over the contract. On June 18, 1999, an action for judicial confirmation of notarial rescission and delivery of possession was filed by PDP against Chandumal.

Consequently, summons was issued. According to the Sheriff's return, Sheriff Galing attempted to personally serve the summons upon Chandumal on three dates but it was unavailing as she was always out of the house on said dates. Hence, the sheriff caused substituted service of summons by serving the same through Chandumal's mother who acknowledged receipt thereof.

For her failure to file within the prescribed period, PDB filed an ex parte motion to declare Chandumal in default which was granted by the RTC. On February 23, 2001, Chandumal filed an Urgent Motion to Set Aside Order of Default maintaining that she did not receive the summons and/or was not notified of the same. RTC denied Chandumal's motion which was reversed by the Court of Appeals due to invalid and ineffective substituted service of summons.

ISSUES:
(1) Whether there was valid substituted service of summons
(2) Whether Chandumal voluntarily submitted to the jurisdiction of the trial court
(3) Whether there was proper rescission by notarial act of the contract to sell

HELD:
(1) There was no valid substitute service of summons.

The Return of Summons does not specifically show or indicate in detail the actual exertion of efforts or any positive step taken by the officer or process server in attempting to serve the summons personally to the defendant. The return merely states the alleged whereabouts of the defendant without indicating that such information was verified from a person who had knowledge thereof.

(2) Respondent voluntarily submitted to the jurisdiction of the trial court.

Section 20, Rule 14 of the Rules of Court states "The defendant's voluntary appearance in the action shall be equivalent to service of summons"

(3) There is no valid rescission of the contract to sell by notarial act.

The allegation that Chandumal made herself unavailable for payment is not an excuse as the twin requirements for a valid and effective cancellation under the law, i.e. notice of cancellation or demand for rescission by a notarial act and the full payment of the cash surrender value, is mandatory.

CIR v Algue (Taxation)

CIR v Algue
GR No. L-28896, February 17, 1988


FACTS:

The BIR assessed Algue a total amount of delinquency taxes of Php 83,183.85 for the years 1958 and 1959. It contends that the company's claimed deduction of Php 75,000 in the form of promotional fees is disallowed because it was not ordinary reasonable or necessary business expenses. Algue filed a protest.

BIR did not take any action. So, Algue filed a petition for review with the Court of Tax Appeals which rule in favor of Algue. Thus, the current petition.

ISSUE:
Whether the BIR correctly disallowed the deduction

RULING:
No.

The burden is on the taxpayer to prove the validity of the claimed deduction. Here, the onus has been discharged satisfactorily. Here, the onus has been discharged satisfactorily. The promotional fees were necessary and reasonable in the light of the efforts exerted by the payees in the inducement of investors to venture in an experimental enterprise. Thus, the payees should be sufficiently recompensed.