ART.
1158
Office of the Solicitor General vs. Ayala Land Incorporated
Facts:
A case was filed against various shopping malls such as Ayala Land, Robinsons Land Corporation,
Shangri-La Plaza Corporation, and SM Prime Holdings to provide free parking spaces to their
patrons and general public.
Issue:
Were the malls under the obligation to provide free parking spaces?
Ruling:
No. The National Building Code and its IRR make no mention of such fees, nor does it regulate
the collection of the same. Art. 1158 is clear in stipulating that obligations derived from law are
not presumed.
ART. 1159
Tiu v. Platinum
Facts:
Platinum Plans hired petitioner as its Division Marketing Director. In the agreement, there was a
“non-involvement provision” which states that she cannot join any company engaged in the same
business as Platinum within two years from separation. Petitioner however joined a similar
company two months after she left Platinum.
Issue:
Was the Non-Involvement Provision, which put petitioner under the obligation not to engage with
any company in the same business, valid?
Ruling:
Yes.
Art. 1159 of the New Civil Code provides that obligations arising from contract have the force of
law between the contracting parties and should be complied with in good faith.
The Court held that while the “Non-Involvement Provision” was held invalid in other cases, it is
valid herein pursuant to Art. 1159. Petitioner was the Senior Assistant Vice President and
Territorial Operations Head in charge of Platinum’s Hongkong and ASEAN operations and had
been privy to confidential and highly sensitive marketing strategies of the business. To allow her
to engage in a rival business soon after she leaves would make respondent’s trade secrets
vulnerable especially in a highly competitive marketing environment.
Thus, petitioner was bound to comply and liable for the non-compliance of the terms of the Non-
Involvement Provision.
ART. 1160
Sebastian Siga-an vs. Villanueva
Facts:
Petitioner loaned amount of Php 450,000 to respondent. The loan agreement was in writing but
there was no original stipulation as to the payment of interest for the loan. Respondent paid the
amount of Php 540,000 plus the amount of Php 335,000 as interest.
Issue:
Is solution indebiti applicable in the case? Is the respondent liable for the payment of interest?
Ruling:
(1) Yes, solution indebiti was applicable in the instant case.
The principle of solution indebiti applies where
(1) A payment is made where there exists no binding relation between the payor, who no duty to
pay, and the person who received the payment; and
(2) The payment is made through mistake, and not through liberality or some other cause.
The principle of solution indebiti applies in case of erroneous payment of undue interest.
It was duly established that respondent paid interest to petitioner. Respondent was under no duty
to make such payment because there was no express stipulation to that effect. There was no binding
relation between petitioner and respondent as regards to the payment of interest. The payment was
clearly a mistake.
(2) No, respondent is not liable to pay interest.
Under Art. 1956 of the Civil Code, no interest shall be due unless expressly stipulated in writing.
In the case at bar, petitioner presented a handwritten note where respondent purportedly admitted
owing petitioner “capital and interest.” Respondent however explained that it was petitioner who
made the promissory note and she was told to copy it in her own handwriting; that being unaware
of the law on interest and fearing the petitioner would make good of his threats if she would not
obey the instruction to copy the promissory note in her own handwriting. It is evident that
respondent did not really consent to the payment of interest for the loan and that she was merely
tricked and coerced by petitioner to pay interest. Hence, it cannot be gainfully said that such
promissory note pertains to an express stipulation of interest or written agreement of interest on
the loan between petitioner and respondent.
\
Domestic Petroleum Retailer Corporation v. Manila International Airport Authority
Facts:
The petitioner, DPRC, and respondent, MIAA, entered into a lease agreement on June 4, 1998 for
a parcel of land and a building situated at Domestic Road, Pasay City. DPRC was liable to pay
monthly rentals of Php 75,357.74 for the land and Php 33,310.46 for the building.
MIAA passed a resolution which increased the rental charge for its lessees and concessionaires.
DPRC contested the increased rates due to lack of prior notice and public hearing.
In protest to the rate increase, DPRC communicated its objection to MIAA but complied, paying
PHP 628,895.43, under the terms set by the disputed resolution, and accrued a total payment of
PHP 9,593,179.87.
Following a SC decision nullifying the resolutions of MIAA, DPRC stopped paying increased
rentals and resumed paying the original rates. This led to a refund demand which MIAA ignored,
prompting DPRC to file a complaint for sum of money before the RTC.
The RTC ruled in favor of MIAA. The CA decided in favor of MIAA partially, reducing the refund
aount based on a six-year prescriptive period applied to the solution in debiti quasi-contractual
framework, with similar legal interest imposition. Hence, DPRC appealed to the Supreme Court.
Issue:
Can a six-year prescriptive period under the quasi-contract of solutio indebiti be applied in the case
at bar? If so, should the refund amount due from MIAA be reduced?
Ruling:
No, the SC ruled that solution indebiti was incorrectly applied.
Solutio indebiti applies only where no binding relation exists between the parties, and payment is
made due to mistake.
Here, a valid lease contract indicated a clear juridical relationship, thus debunking DPRC’s
overpayment as solutio indebiti. Such lease contract governed the parties’ relations.
Thus, the refund amount due from MIAA should not be reduced.
On prescriptive period: The prescribed return of overpayments derived from a contractual breach
rather than solutio indebiti. Article 1144 of the Civil Code, conferring a ten-year prescriptive period
for written contract-based actions, was pertinent, not the six-year window.
ART. 1163
Gaisano v. Insurance Company of North America
Facts:
The Gaisano Superstore Complex in Cagayan de Oro was consumed by fire which destroyed
clothing materials which were still paid for by Gaisano with its suppliers. The Insurance Company
paid the claims of the suppliers and sought reimbursement from Gaisano. The latter stated that the
fire is a fortuitous event and hence it should not be liable.
Issue:
Was respondent liable for the payment of reimbursement to respondent?
Ruling:
Yes.
An obligation is generic when the object thereof is designated merely by its class or genus without
any particular designation or physical segregation from all others of the same class. The loss or
destruction of anything of the same kind even without the debtor’s fault and before he has incurred
in delay will not have the effect of extinguishing the obligation.
As a rule, an obligor should be held exempt from liability when the loss occurs thru a fortuitous
event only holds true when the obligation consists in the delivery of a determinate thing and there
is no stipulation holding him liable even in the case of fortuitous event. It does not apply when the
obligation is pecuniary in nature. An obligation to pay money is generic.
Pursuant to the principle of genus nunquam perit, the genus of a thing can never perish.
Here, the Court stressed that the insurance in this case is not for loss of goods but for petitioner’s
accounts that remained unpaid 45 days after the fire. Accordingly, petitioner’s obligation is for the
payment of money. As such, the failure of Gaisano to make the payment even by reason of
fortuitous event shall not relieve of his liability.
Thus, whether fire is a fortuitous event or petitioner was negligent are matters immaterial to this
case. What is relevant here is whether it has been established that petitioner has outstanding
accounts.
