Ernest Berg vs. National City Bank Of New York G.R. No. L-9312, Oct.

31, 1957 Facts: The plaintiff, Ernest Berg, together with his brother, Alfred Berg, guaranteed Red Star Stores, Inc. loan ($19,956.75) with the National City Bank of New York, Manila Branch. The said loan was acquired shortly before the outbreak of the war. The plaintiff paid the loan during the Japanese Occupation. Bank of Taiwan required the plaintiff to pay the said loan. However, after the liberation, the defendant did not consider such payment as valid to extinguish Red Star Stores obligation. The plaintiff agreed to pay the obligation on the condition that the Bank would forego its claim as to interest. Thus, the plaintiff and the Bank had entered into a compromise agreement. Pursuant to the said compromise, the plaintiff had made payment but unaware of the Supreme Courts ruling where it declared that payments made during the Japanese Occupation were valid. The Supreme Court held such ruling in the case of Haw Pia vs. China Banking Corp (G.R. No. L-554). Two years after, the plaintiff demanded repayment from the Bank on the basis of the SCs ruling in Haw Pia case. The Bank denied such demand on the ground that the case of the plaintiff had been compromised and can no longer be reopened. This led the plaintiff to file a case to recover the payment made and claim damages for P33,000. The lower court ruled in favour of the plaintiff but did not make a ruling on the claim for damages. Hence, both petitioner and the defendant appealed the lower courts ruling. Issue: Whether or not the compromise in question was valid and binding to prevent recovery of plaintiffs payment? Held: Yes. Ratio: That it being a compromise, it is binding upon the parties and as such it has the same authority as res judicata As a rule, a compromise is entered into not because it settles a valid claim but because it settles a controversy between the parties. Threat to bring action to enforce collection is not duress: It is a practice followed not only by banks but even by individual, to demand payment of their accounts with the threat that upon failure to do so, an action would be instituted in court. That such a threat is proper within the realm of law as a means to enforce collection, and it cannot constitute duress even if the claim proves to be unfounded so long as the creditor believes that it was his right to do so. There is absence of intimidation in the case at bar: As warranted by the facts and circumstances established in the case at bar, the compromise agreement has been entered into voluntarily and, as such, is valid and binding, since under law intimidation can only exist when one of the contracting parties is inspired with a reasonable and well-grounded fear of suffering an imminent and serious injury to his person or property.

Vincent Riker vs. Hon. Blas F. Ople and Mayon Imperial Hotel G.R. No. L-50492, Oct. 27, 1987 Facts: The president of Mayon Imperial Hotel, Mrs. Josefa Imperial Aquino, hired Vincent Riker to be the Hotels general manager. Mr. Rikers employment will be subject for probation in a period of four months but the term of employment will be for two years. The probationary contract was only signed by Mr. Riker but not by the respondent. Mr. Riker still, however, received the full amount of his salary which is P7,000 per month. Thereafter, the respondent found Mr. Riker incompetent in his job as a general manager for he is an alcoholic and he was guilty of series of misconducts which made the respondent lose its confidence in him. The series of misconducts include of excess consumption of the ho tels wines and food for himself and his guests and that he had exhibited anti-Filipino behaviour and activities. This led the Hotel to dismiss him from his job. Thereafter, Mr. Riker filed a complaint against the Hotel for illegal dismissal with the Department of Labors Regional Office. The Regional Director ruled in favour of the respondent on the ground that the employment contract submitted by the complainant was not perfected for the respondent had not signed it. On appeal, the Minister of Labor affirmed the Regional Directors ruling on the ground that Mr. Riker was guilty of serious misconduct resulting in the employers loss of confidence in him. Hence, Mr. Riker filed a petition for review on certiorari. Issues: Whether or not Mr. Rikers dismissal from employment was with legal basis? Held: Yes. It was done with legal basis. Ratio: By the very nature of his position, the maintenance of an employer-employee relationship is highly dependent upon the trust and confidence reposed on him by the employer. The loss of trust and confidence by the employee would instantly mean the termination of his employment. Where an employee has been guilty of breach of trust or that his employer has ample reason to distrust him, a labor employer cannot be compelled to continue in employment, an employee guilty of acts inimical to the interests of the employer and justifying loss of confidence in him. Hence, no cogent reason can be found to disturb the pronouncement of the Minister of Labor as to the validity of the act of the respondent hotel in terminating the employment of complainant, as an act well within the prerogatives of the former to terminate the employment of erring employees. Whether or not alleged contract existed and was violated by the respondent so as to warrant the grant of damages prayed for and other money of the petitioner? Held: No. Ratio: Of prime importance is the fact that the proposed employment contract, not having been signed by the Hotel, lacks consent which is the first essential requisite of every contract (Art. 1319, Civil Code). This lack of consent lends credence to the Hotels claim that its verbal agreement with complainant was on a four-month probationary basis, the finalization of which depends on whether or not after the probationary period, respondent is satisfied with complainants services. As to the claims for unpaid wages, the Regional Director found that the complainant was paid in full in the amount of P7,000 a month as shown by his own testimony appearing on page 30 of the transcript of stenographic notes taken on June 3, 1977 and was given reimbursement for his expenses from New York to Manila.

Filoil Refinery Corp., Petrophil Corp. and Filoil Marketing Corp. vs. Hon. Mendoza and Hon. Zosa, in their capacity as Judge of Branch V of CFI of Cebu, Jesus P. Garcia and Severina B. Garcia G.R. No. L-55526, June 15, 1987 Facts: The private respondents, Jesus P. Garcia and Severina B. Garcia, entered into a lease contract with Filoil Refinery Corporation to lease a lot in Cebu City. Filoil Refinery Corp. violated the terms and conditions of the lease agreement when it subleased it to Filoil Marketing Corp. and subsequently the latter subleased it to Petrophil Corp. The petitioner also delayed several monthly rental payments. This caused the private respondents to file a case to rescind the contract of lease. The lower court ruled in favour of the private respondents finding that the petitioner illegally subleased the lot. On appeal, the Court of Appeals affirmed the lower courts ruling where their motion for reconsideration was denied due to their failure to amend or to complete their record on appeal. Hence, the petitioner filed the petition before the Supreme Court. Issues: Whether or not the petitioners timely perfected their appeal? Held: Yes. Ratio: It is a fact that petitioners filed their record on appeal well within the reglementary period and that the lower court never issued an order declaring the Record on Appeal incomplete or defective nor an order ordering petitioners to complete or correct the same. The lower court did not act on the record on appeal filed by petitioners despite the opposition of the private respondents to the approval of the same. Whether or not there was a violation of the terms of the lease contract? Held: No. Ratio: An examination of the lease contract reveals that there is no express prohibition against the assignment of the leasehold right. Under the law, when there is no express prohibition, the lessee may sublet the thing leased and all rights acquired by virtue of an obligation are transmissible, if there has been no stipulation to the contrary. Whether or not there was delay in payment? Held: Yes. Petitioners admit that on a few occasions, they were late in paying the rentals which were due within the first 15 days of each month but their delay was only for a few days. The delayed rentals for the months of May, July, August and September, 1974 were remitted to private respondents on May 21, July 19, August 19 and September 16, 1974, respectively. Such breaches were not so substantial and fundamental as to defeat the object of the parties in making the agreement because the law is not concerned with such trifles. Whether or not the case has become moot and academic? Held: Yes. All these arguments however have become moot and academic considering that the contract of lease sought to be rescinded expired or terminated last September 16, 1982 or almost 5 years ago by its own terms as provided for in the Lease Contract. Petitioners have won the case without the necessity of an order by this Court to reverse the judgment of the respondent court and/or to grant the petition as prayed for.