CASE in Oblicon Final | Contracts | Damages

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  oblicon finals NPC vs. Dayrit (novation)Held: It is elementary that novation is never presumed; it must be eplicitly stated or there must be manifest incompatibility bet!een the old and the ne! obli ations in every aspect. #hus the Civil Code provides: $rt. %&'&. In order that an obli ation may be etin uished by another !hich substitutes the same it is imperative that it be so declared in uneuivocal terms or that the old and the ne! obli ations be on every point incompatible !ith each other.In the case at bar there is nothin in the *ay %+ %',& a reement !hich supports the petitioner-s contention. #here is neither eplicit novation nor incompatibility on every point  bet!een the old and the ne! a reements. /acts: Daniel 0oas sued NPC to compel the NPC to restore the contract of 0oas for security services !hich the former had terminated. Ho!ever they reached a compromise a reement and the court approved it. 1ne of the stipulations of the a reement !as that the parties shall continue !ith the contract of security services under the same terms and conditions as the previous contract effective upon the si nin thereof. Parties entered into another contract for security services but NPC refused to implement the ne! contract for  !hich Daniel filed a *otion for 2ecution. #he NPC assails the 1rder on the round that it directs eecution of a contract !hich had been novated by that of the ne! contracts. NPC contends there !as novation because they eecuted the second contract !ith 3osefina 0oas;therefore there !as a chan e of party. 4pon the other hand 0oas claims that said contract  !as eecuted precisely to implement the compromise a reement for !hich reason there !as no novation. Inchausti vs. 5ulo (novation)Held: #he contract of *ay %& %'%% does not constitute a novation of the former one of $u .%& %'6' !ith respect to the other debtors !ho eecuted this contract. /irst 7in order that an obli ation may be etin uished by another !hich substitutes it it is necessary that it should  be so epressly declared or that the old and the ne! be incompatible in all points(art. %&'&). It is al!ays necessary to state that it is the intentionof the contractin parties to etin uish the former obli ation by the ne! one.8 #he obli ation to pay a sum of money is not novated in a ne! instrument !herein the old is ratified by chan in only the term of payment and addin other obli ations not incompatible !ith the old one.#he obli ation bein solidary the remission of any part of the debt made by a creditor in favor of one or more of the solidary debtors necessarily benefits the others and therefore there can be no doubt that in accordance !ith the provision of $rt. %&%9 %&&& the defendanthas the ri ht to enoy the benefits of the partial remission. $t present ud ment can be rendered only as to P%%&966./acts: #his suit is brou ht for the recovery of a certain sum of money the balance of a current account opened by the firm of Inchausti  Company !ith #eodor 5ulo and after his death continued by <re orio 5ulo as principal representative of his children. 1n $u .%& %'6' <re orio 5ulo in representation of his = siblin s eecuted a notarial instrument ratifyin all the contents of the prior document of 3an.&> %'6, severally and oint ac?no!led ed their indebtedness for P&9=++9.+& %6 @ per annum 9 installments. Plaintiff  brou ht an action a ainsta <re orio for the payment of the said balance due. Aut on *ay %& %'%% = siblin s eecuted another instrument in reco nition of the debt reduced to P&&9666interest reduced to >@ per annum installments increased to ,.  Baban?alan u ar Co. vs. Pacheco (novation)Held: hen an easement of ri ht !ay is one of the principal conditions of a contract and theduration of said easement is specified the reduction of said period in a subseuent contract  !herein the same obli ation is one of the principal conditions constitutes a novation and to that etent etin uishes the former contractual obli ation. In the contract of November % %'&6 the duration of the ri ht of !ay !hich the defendant  bound herself to impose upon her estate in favor of the plaintiff !as t!enty years !hile in the contract of eptember &' %'&& that period !as reduced to seven crops !hich is euivalent to seven years. #here can be no doubt that these t!o contracts in so far as the duration of the ri ht of !ay is concerned are incompatible !ith each other for the second contract reduces the period a reed upon in the first contract and so both contracts cannot subsist at the same time. #he duration of the ri ht of !ay is one of the principal conditions of the first as !ell as of the second contract and inasmuch as said principal condition has been modified the contract has been novated in accordance !ith the provision uoted above./acts: 3osefa Pacheco binds herself to ac?no!led e in favor of the Baban?alan u ar Co. Inc. all the easements !hich the Baban?alan may consider convenient and necessary for its railroad on the HilabaE an estate belon in to the Pacheco; the only differences bein that the term of the contract of November % %'&6 is t!enty years !hile that of the contract entered into on eptember &' %'&& is seven crops (one of the stipulations of the contract)./ua vs. 5ap (novation)Held: e concur in the theory that appellants liability under the ud ment in civil case No. +&%&9 had been etin uished by the settlement evidenced by the mort a e eecuted by them in favor of the appellee on December %> %'==. $lthou h said mort a e did not epressly cancel the old obli ation this !as impliedly novated by reason of incompatibly resultin from the fact that !hereas the ud ment !as for P%9=,.6+ payable at one time did not provide for attorney-s fees and !as not secured the ne! obli ation is or P%&66 payable in installments stipulated for attorney-s fees and is secured by a mort a e. /acts: Ay virtue of a ud ment for P%9=,.6+ !hich /ua obtained a ainst 5ap a !rit of eecution !as issued in pursuance of !hich a parcel of land belon in to 5ap !as levied upon and its sale at public auction duly advertised. #he sale !as ho!ever suspended as a result of an a reement bet!een the parties by the terms of !hich the obli ation under the  ud ment !as reduced to P%&66 payable in four installments and to secure the payment of this amount the land levied upon !ith its improvement !as mort a ed to appellee !ith the condition that in the event of appellants- default in the payment of any installment they  !ould pay %6 per cent of any unpaid balance as attorney-s fees as !ell as the difference  bet!een the full ud ment credit and the reduced amount thus a reed. $ppellants failed to comply !ith the terms of the settlement !hereupon appellee sou ht the eecution of the  ud ment and by virtue of an alias !rit of eecution the land !as sold at public auction to appellee and a final deed !as eecuted in his favor. $ppellants refused ho!ever to vacate the land and to reco niFe appellee-s title thereto; hence the latter instituted the present action for recovery.*illar vs. C$ (novation)Held: No substantial incompatibility bet!een the mort a e obli ation and the ud ment liability of the respondent sufficient to ustify a conclusion of implied novation. #he stipulation for the payment of the obli ation under the terms of the deed of chattel mort a e serves only to provide an epress and specific method for its etin uishment G payment in  t!o eual installments. #he chattel mort a e simply ave the respondent a method and more time to enable him to fully satisfy the ud ment indebtedness. #he chattel mort a e a reement in no manner introduced any substantial modification or alteration of the  ud ment. Instead of etin uishin the obli ation of the respondent arisin from the  ud ment the deed of chattel mort a e epressly ratified and confirmed the eistence of the same amplifyin only the mode and period for compliance by the respondent.#he defense of implied novation reuires clear and convincin proof of complete incompatibility bet!een the t!o obli ations. #he la! reuires no specific form for an effective novation by implication. #he test is !hether the t!o obli ations can stand to ether. If they cannot incompatibility arises and the second obli ation novates the first. If they can stand to ether no incompatibility results and novation does not ta?e place. /acts: *illar obtained a favorable condemnin $ntonio P. <abriel to pay him the sum of P%+>.', !ith interest at %&@ per annum from the date of the filin of the complaint the sum of P+66 as attorney-s fees and the costs of suit. #he lo!er court issued the !rit of eecution on the basis of !hich the sheriff seiFed the respondent-s illy-s /ord eep. #he respondent ho!ever pleaded !ith the petitioner to release the eep under an arran ement  !hereby the respondent to secure the payment of the ud ment debt a reed to mort a e the vehicle in favor of the petitioner. #he petitioner a reed to the arran ement; thus the parties eecuted a chattel mort a e on the eep. 0esolution of the controversy posed by the petition at bar hin es entirely on a determination of !hether or not the subseuent a reement of the parties as embodied in the deed of chattel mort a e impliedly novated the ud ment obli ation.andico vs. Pi uin (novation)Held: 0eduction of the amount of money to be paid does not amount to novation. #he payment by the respondent of the lesser amount of P+666 accepted by the petitioners  !ithout any protest or obection and ac?no!led ed by them as in full satisfaction of the money ud ment completely etin uished the ud ment debt and released the respondent from his pecuniary liability. In the case at hand !e fail to see !hat ne! or modified obli ation arose out of the payment  by the respondent of the reduced amount of P+666 and substitute the monetary liability for P>666 of the said respondent under the appellate court-s ud ment. $dditionally to sustain novation necessitates that the same be so declared in uneuivocal terms G clearly and unmista?ably sho!n by the epress a reement of the parties or by acts of euivalent import G or that there is complete and substantial incompatibility bet!een the t!o obli ations. 9 /acts: #he appellate court-s ud ment obli es the respondent to do t!o thin s: (%) to reco niFe the easement and (&) to pay the petitioners the sums of P9666 actual and P966 eemplary dama es and P966 attorney-s fees or a total of P>666. #he full satisfaction of thesaid ud ment reuires specific performance and payment of a sum of money by the respondent. #he parties entered into an a reement reducin the payment to P+666 and !as subseuently paid by respondent. as there a novationCui vs. $rellano 4niversity (contracts; contrary to public policy)Held: #he !aiver si ned by Cui !as void as it !as contrary to public policy; it !as null and  void.  /acts: Cui !as a la! scholar at the $rellano 4niversity; he paid the tuition fees but it !as returned to him at the end of every semester. Aefore $rellano a!arded the scholarship rantCui !as made to si n a contract covenant and a reement sayin that he !aives his ri ht to transfer to another school in consideration of the scholarship rant and if he transfers he shall pay the tuition fees a!arded to him !hile bein a scholar. He transferred to another school to finish his last term in la! school. hen he !as about to ta?e the Aar his #10 at  $rellano !as not issued unless he pays the amount of the tuition fees that !ere returned to him !hen he !as still their scholar. He paid under protest. 0P vs. PJD# (contracts; autonomy of !ill)Held: e a ree !ith the court belo! that parties can not be coerced to enter into a contract  !here no a reement is had bet!een them as to the principal terms and conditions of the contract. /reedom to stipulate such terms and conditions is of the essence of our contractual system and by epress provision of the statute a contract may be annulled if tainted by  violence intimidation or undue influence. Aut the court a uo has apparently overloo?ed that !hile the 0epublic may not compel the PJD# to celebrate a contract !ith it the 0epublic may in the eercise of the soverei n po!er of eminent domain reuire the telephone company to permit interconnection of the overnment telephone system and that of the PJD# as the needs of the overnment service may reuire subect to the payment of  ust compensation to be determined by the court. Nominally of course the po!er of eminentdomain results in the ta?in or appropriation of title to and possession of the epropriated property; but no co ent reason appears !hy the said po!er may not be availed of to impose only a burden upon the o!ner of condemned property !ithout loss of title and possession. Itis unuestionable that real property may throu h epropriation be subected to an easement of ri ht of !ay. #he use of the PJD#-s lines and services to allo! interKservice connection bet!een both telephone systems is not much different. In either case private property is subected to a burden for public use and benefit. If under section > $rticle LIII of the Constitution the tate may in the interest of national !elfare transfer utilities to public o!nership upon payment of ust compensation there is no reason !hy the tate may not reuire a public utility to render services in the eneral interest provided ust compensation is paid therefor. 4ltimately the beneficiary of the interconnectin service  !ould be the users of both telephone systems so that the condemnation !ould be for public use. /acts: #he Aureau of #elecommunications had a contract !ith PJD#; that the Aureau !ould pay PJD# for the use the trun? lines of PJD# to establish phone lines in all overnment offices in the country. Ho!ever after sometime the Aureau etended its services for commercial use as PJD# could not cope !ith the demands of the public for phone line connections. PJD# ?ne! about the actuations of the Aureau but it too? PJD# a lon time to file a complaint for the AureauMs act.aura vs. indico (contracts; contrary to public policy)Held: Contract or a reement is a nullity. $mon those that may not be the subect matter (obect) of contracts are certain ri hts of individuals !hich the la! and public policy have deemed !ise to eclude from the commerce of man. $mon them are the political ri hts conferred upon citiFens includin  but not limited to once-s ri ht to vote the ri ht to present one-s candidacy to the people and to be voted to public office provided ho!ever that all the ualifications prescribed by la! obtain. uch ri hts may not therefore be  bar ained a!ay curtailed !ith impunity for they are conferred not for individual or private  benefit or advanta e but for the public ood and interest.
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