Metro Concast Steel Corporation vs. Allied Bank (Art. 1174 Fortuitous Event) Facts:
Metro Concast obtained several loans from allied bank secured by promissory notes and trust receipts. They however, failed to settle their obligation despite receiving demand letters from Allied Bank. This prompted Allied Bank to f ile a case to compel Metro Concast to pay. The petitioner then alleged that the economic reverses suffered by the Philippine economy as well as the devaluation of the peso against the ! dollar contributed greatly to the downfall of the steel industry, directly affecting their business and eventually leading to its cessation. "ence, in order to settle their debts with Allied Bank, petitioners offered the sale of Metro Concast#s remaining assets, consisting of machineries and e$uipment, to Allied Bank, which the latter, however, however, refused. %nstead, Allied Bank advised them to sell the e$uipment and apply the proceeds of the sale to their outstanding obligations. Accordingly, Accordingly, petitioners petitioners offered the e$uipment for sale. Peakstar e&pressed interest in buying the scrap metal. 'uring the negotiations with Peakstar, petitioners claimed that Atty. !aw, a member of Allied Bank#s legal department, acted as the latter#s agent. (ventually, through Atty. !aw, a Memorandum of Agreement was drawn between Metro Concast and Peakstar under which Peakstar obligated itself to purchase the scrap metal. nfortunately, nfortunately, Peakstar reneged on all its obligations under the MoA. %n the presen presentt case, case, petiti petition oners ers essent essential ially ly argue argue that that their their loan loan obliga obligatio tions ns to Alli Allied ed Bank Bank had already already been been e&tinguished due to Peakstar#s failure to perform its own obligations to Metro Concast pursuant to the MoA. Petitioners classify Peakstars de!ault as a !or" o! !orce "a#eure in the sense that they have, beyond their control, lost the funds they e&pected to have received from the Peakstar )due to the MoA* which they would, in turn, use to pay their own loan obligations to Allied Bank. $ssue: %&' tere as !orce "a#eure *ulin+: '& Petitioners# arguments are untenable. At the outset, the Court must dispel the notion that the MoA would have any relevance relevance to the performance performance of petition petitioners# ers# obligat obligations ions to Allied Allied Bank. Bank. The MoA is a sale of assets assets contract, contract, while petitioners# obligations to Allied Bank Bank arose from various loan transactions. transactions. Absent Absent any showing showing that the terms and conditions conditions of the latter transactions have been, in any way, modified or novated by the terms and conditions in the MoA, said contracts should be treated separately and distinctly from each other, such that the e&istence, performance or breach of one would not depend on the e&istence, performance or breach of the other. 'o, anent petitioners reliance on !orce "a#eure, su!!ice it to state tat Peakstars -reac o! its o-li+ations to Metro Concast arisin+ !ro" te MoA cannot -e classi!ied as a !ortuitous event under #urisprudential !or"ulation. %ile it "a -e ar+ued tat Peakstars -reac o! te MoA as un!orseen - petitioners, te sa"e is clearl not /i"possi-le/to !oresee or even an event ic is independent o! u"an ill./ 'eiter as it -een son tat said occurrence rendered it i"possi-le !or petitioners to pa teir loan o-li+ations to Allied Bank and tus, ne+ates te !or"ers force !or"ers force majeure teor majeure teor alto+eter. alto+eter.
Sunli!e o! Canada vs 0an it (Art. 1172 $nterests to -e i"posed on o-li+ations) Facts:
+espondent Tan it is the widow and designated beneficiary of -orberto, whose application for a life insurance policy was granted by b y !unlife. i ithin thin the two/year contestability period, -orberto died of disseminated gastric carcinoma. Conse$uently, respondent Tan it filed a claim under the sub0ect policy. %n a 1etter, petitioner denied respondent Tan it#s claim on account of -orberto#s failure to fully and faithfully disclose disc lose in his insurance application application certain material and relev relevant ant info informati rmation on abou aboutt his health and smok smoking ing hist history ory.. According to petitioner, its underwriters would not have approved -orberto#s application for life insurance had they been given the correct information. Believing that the policy is null and void, petitioner opined that its liability is limited to the refund of all the premiums paid. %n a letter, respondent Tan it refused to accept the check and insisted on the payment of the insurance proceeds. Petitioner filed a Complaint for +escission of %nsurance Contract. +TC ruled in favor of Tan it. CA however reversed such decision and found that there was concealment on the part of -orberto. Therefore, the insurance policy should be rescinded and the amount of premium paid by -orberto should be
refunded with corresponding interest. !unlife assailed the imposition of interest on the premium to be refunded to respondents. $ssue: 2- petitioner is liable to pay interest on the premium to be refunded to respondents *ulin+: -2
As a form of damages, compensatory interest is due only if the obligor is proven to have failed to comply with his obligation. %n this case, it is undisputed that simultaneous to its giving of notice to respondents that it was rescinding the policy due to concealment, petitioner tendered the refund of premium by attaching to the said notice a check representing the amount of refund. "owever, respondents refused to accept the same since they were seeking for the release of the proceeds of the policy. Because of this discord, petitioner filed for 0udicial rescission of the contract. Petitioner, after receiving an adverse 0udgment from the +TC, appealed to the CA. And as may be recalled, the appellate court found -orberto guilty of concealment and thus upheld the rescission of the insurance contract and conse$uently decreed the obligation of petitioner to return to respondents the premium paid by -orberto. Moreover, we find that petitioner did not incur delay or un0ustifiably deny the claim. Based on the foregoing, we find that petitioner properly complied with its obligation under the law and contract. "ence, it should not be made liable to pay compensatory interest.
