1. Sps. Mamaril v. The Boy Scouts of the Philippines, et al.

(2013)
Facts: The Sps. Mamaril are jeepney owners who park their 6 passenger jeeps every night at
the BSP compound for P300/mo for each unit. One of the jeeps was lost. According to the
security guards of AIB, with whom BSP had contracted with, a male person who looked familiar
to them took the jeep out of the compound. The Sps. Mamaril filed a complaint for damages
against BSP, AIB, and the security guards.
Issue: WON BSP should be held liable for the loss of the Sps. Mamaril on the basis of the
Guard Service Contract entered by BSP with AIB and their parking agreement with BSP
Held: No. The Sps. Mamaril cannot hold BSP liable. In order that a 3P benefited by Art. 1311,
para. 2 (stipulation pour autrui), may demand its fulfillment, the ff. requisites must concur:
(1) There is a stipulation in favor of a 3P;
(2) The stipulation is a part, not the whole, of the contract;
(3) The contracting parties clearly and deliberately conferred a favor to the 3P the favor is not
merely incidental;
(4) The favor is unconditional and uncompensated;
(5) The 3P communicated his or her acceptance of the favor before its revocation; and
(6) The contracting parties do not represent, or are not authorized, by the 3P.
None of the requisites are present. The Sps. Mamaril are not parties to the Guard Service
Contract. The Contract did not contain any stipulation pour autrui. And even if there was, Sps.
Mamaril did not convey any acceptance thereof. Thus, under the principle of relativity of
contracts, they cannot validly claim any rights or favor under the Contract.
2. The Manila Insurance Company, Inc. v. Sps. Amurao (2013)
Facts: Sps. Amurao entered into a Construction Contract Agreement (CCA) with Aegean
Construction and Development Corporation for the construction of a building. To guarantee its
full and faithful compliance with the T&C of the CCA, Aegean posted performance bonds
secured by petitioner The Manila Insurance Company, Inc. (MIC) and Intra Strata Assurance
Corporation.
Aegean failed to complete the project so Sps. Amurao filed a Complaint against MIC and Intra
Strata to collect on the performance bonds they issued.
Issue: WON MIC is a surety or a guarantor
Held: MIC is a surety. A contract of suretyship is an agreement whereby a party, called the
surety, guarantees the performance by another party, called the principal or obligor, of an
obligation or undertaking in favor of a third party, called the obligee. It includes official
recognizances, stipulations, bonds or undertakings issued by any company by virtue of and
under the provisions of Act No. 536, as amended by Act No. 2206. A suretys liability is joint and
several, limited to the amount of the bond, and determined strictly by the terms of contract of
suretyship in relation to the principal contract between the obligor and the obligee. Although the
contract of suretyship is secondary to the principal contract, the suretys liability to the obligee is
nevertheless direct, primary, and absolute.

3. Heirs of Ignacio v. Home Bankers Savings and Trust Company, et al. (2013)
Facts: Fausto Ignacio mortgaged 2 parcels of land to HBSTC as security for a loan. Ignacio
defaulted in the payment of the loan so HBSTC foreclosed the REM. During the foreclosure
sale, HBSTC was the highest bidder. Ignacio failed to redeem the foreclosed properties within 1
year from the bank's registration with the RD, but despite the lapse of this period and the
consolidation of title in the bank, Ignacio offered to repurchase the properties. While HBSTC
considered Ignacios offer to repurchase, there was no repurchase contract executed. The
present controversy was fuelled by Ignacios stance that a verbal repurchase/compromise
agreement was actually reached and implemented by the parties.
HBSTC sold the properties to Sps. Rodriguez and the Zuigas, prompting Ignacio to file an
action for specific performance and damages against HBSTC.
Issue: WON a contract for the repurchase of the foreclosed properties was perfected
Held: No. Exh. I clearly shows that Ignacio's acceptance of HBSTC's T&C for the repurchase of
the foreclosed properties was not absolute.
Contracts are perfected by mere consent, which is manifested by the meeting of the offer and
the acceptance upon the thing and the cause which are to constitute the contract.
If the acceptance of the offer was not absolute, such acceptance is insufficient to generate
consent that would perfect a contract. The acceptance must be identical in all respects with that
of the offer so as to produce consent or meeting of the minds. Where a party sets a different
purchase price than the amount of the offer, such acceptance was qualified which can be at
most considered as a counter-offer; a perfected contract would have arisen only if the other
party had accepted this counter-offer
4. Sps. Cabahug v. NPC (2013)
Facts: NPC filed a suit for expropriation against landowners in connection with its Leyte-Cebu
Interconnection Project. The suit was later dismissed when NPC opted to settle with the
landowners by paying an easement fee of 10% of the value of their property. Sps. Cabahug
were among the defendants in the expropriation suit.
Jesus Cabahug executed 2 documents denominated as Right of Way Grant in favor of NPC. For
and in consideration of the easement fees in the sums of P112,225.50 and P21,375.00, Jesus
Cabahug granted NPC a continuous easement of right of way for the latters transmissions lines
and their appurtenances over their lands. By said grant, Jesus Cabahug agreed not to construct
any building or structure whatsoever, nor plant in any area within the Right of Way that will
adversely affect or obstruct the transmission line of NPC, except agricultural crops, the growth
of which will not exceed three meters high. Under para. 4 of the grant, however, Jesus Cabahug
reserved the option to seek additional compensation for easement fee, based on NPC v. Sps.
Gutierrez.

Sps. Cabahug filed a complaint for the payment of just compensation, damages, and attorney's
fees against NPC, alleging they have been totally deprived of their lands.
Issue: WON the Grant was violated by the Sps. Cabahug when they attempted to collect
additional easement fee
Held: No. From the reservation in the 4th paragraph of the Grant, it is evident that the Sps.
Cabahugs receipt of the easement fee did not bar them from seeking further compensation
from NPC. Even by the basic rules in the interpretation of contracts, the payment of additional
sums to the Spouses Cabahug would not be violative of the parties contract and amount to
unjust enrichment.
A contract constitutes the law between the parties who are bound by its stipulations which, when
couched in clear and plain language, should be applied according to their literal tenor. Courts
cannot supply material stipulations, read into the contract words it does not contain or, for that
matter, read into it any other intention that would contradict its plain import. Neither can they
rewrite contracts because they operate harshly or inequitably as to one of the parties, or alter
them for the benefit of one party and to the detriment of the other, or by construction, relieve one
of the parties from the terms which he voluntarily consented to, or impose on him those which
he did not.
5. Gotesco Properties, Inc., et al. v. Sps. Fajardo (2013)
Facts: The Sps Fajardo entered into a Contract to Sell with GPI for the purchase of a lot in
Caloocan City. Sps. Fajardo undertook to pay the purchase price of P126,000.00 in 10 years.
GPI agreed to execute a final deed of sale in favor of the Sps. Fajardo upon full payment.
However, despite full payment of the purchase price and subsequent demands, GPI failed to
execute the deed and to deliver the title and physical possession of the subject lot. Thus the
Sps. Fajardo filed before the HLURB-ENCRFO a complaint for specific performance or
rescission of contract with damages against GPI and the members of its Board of Directors.
Issue: WON Sps. Fajardo could rescind the contract
Held: Yes. The long delay in the performance of GPI's obligation from date of demand was
unreasonable and unjustified. It cannot therefore be denied that GPI substantially breached its
contract to sell with Sps. Fajardo which thereby accords the latter the right to rescind the same
pursuant to Art. 1191.
Rescission does not merely terminate the contract and release the parties from further
obligations to each other, but abrogates the contract from its inception and restores the parties
to their original positions as if no contract has been made. Consequently, mutual restitution,
which entails the return of the benefits that each party may have received as a result of the
contract, is thus required. To be sure, it has been settled that the effects of rescission as
provided for in Article 1385 of the Code are equally applicable to cases under Article 1191.