Sorensen N.

Sapuay
Student No. 2022-00655
1-DLM

Case Digest Assignment No. 2

(1) Luis G. Gemudiano, Jr. v. Naess Shipping Philippines, Inc., G.R. No.
223825, January 20, 2020

FACTS: Mr. Gemudiano Jr. applied for possible employment as a seaman with Naess
Shipping. He was able to have an interview with Naess Shipping and likewise
completed the training on International Safety Management. Furthermore, Mr.
Gemudiano Jr. was declared fit for sea service after undertaking the mandatory
employment medical examination, as advised by Naess Shipping. Thus, the parties
entered into a contract of employment. Consequently, the parties executed an
Addendum stating that the employment relationship between said parties will start
“when the Master issues a boarding confirmation to Mr. Gemudiano Jr.”

Furthermore, Mr. Gemudiano Jr. also signed an Embarkation Order with the
respondents, which was approved. However, eventually, this was canceled by the
respondents, urging Mr. Gemudiano Jr. to file a complaint before the Labor Arbitrary
(LA) for breach of contract of employment against the latter. The respondents
rebutted this by stating that Mr. Gemudiano Jr. was not able to disclose his medical
conditions deeming him unfit for sea service. The LA favored the petitioner,
consequently urging the respondents to appeal before the National Labor Relations
Commission which ruled the same. The case reached the CA, who favored the
respondents, ruling that there was no perfected contract since the condition—
deployment—stated in the Addendum was not fulfilled.

ISSUE(S): Whether or not the potestative condition needs to be fulfilled for the
contract to be perfected.

Whether or not the pure potestative condition under the Addendum was imposed on
the perfection of the contract, which renders the obligation void.

RULING: NO. The SC noted that there was already a perfected contract of
employment between the petitioner and respondents. The contract had reached the
perfection stage and likewise, it was shown that the essential elements were already
present at the time of its perfection.

Furthermore, the SC—cites Article 1182 of the Civil Code of the Philippines which reads
“When the fulfillment of the condition depends upon the sole will of the debtor, the
conditional obligation shall be void. xxxx”—stressed that although the stipulation stated
in the Addendum is a purely potestative condition, it does not affect the obligation
itself for it is only imposed upon the obligation’s fulfillment. Therefore, the SC held
that only the condition is void. Hence, there is still a contract between the parties.
(2) Roberto L. Yupangco v. O.J. Development and Trading Corporation.
G.R. No. 242074, November 10, 2021

FACTS: Petitioners, OJDTC, and Oscar are engaged in the buying and selling of US
Dollars. Grace would receive the dollar remittances of the OFWs in the US, while
OJDTC and Oscar would deliver the peso equivalent of the dollar remittances to the
OFWs' designated beneficiaries in the Philippines. Petitioners advance the peso
equivalent of the dollar remittances by issuing checks in Philippine Pesos to OJDTC
and Oscar, who upon encashment shall deliver it to the named beneficiaries. OJDTC
and Oscar would pay the corresponding amount in dollars to petitioners upon receipt
of the actual remittance from Grace. The foregoing arrangement continued through
the years until it was terminated sometime in February 2002 when OJDTC and Oscar
could no longer pay the full amount of the US dollars that the petitioners
purchased. By then, the unpaid obligation of OJDTC and Oscar amounted to US$1.9
million.

The foregoing arrangement continued through the years until it was terminated
sometime in February 2002 when OJDTC and Oscar could no longer pay the full
amount of the US dollars that the petitioners purchased. By then, the unpaid
obligation of OJDTC and Oscar amounted to US$1.9 million. Thus, executed an
undated Memorandum of Agreement Prior to IPO (First MOA), which provided that,
the petitioners' "existing investment with Grace shall be secured with a blank deed
of sale over certain parcels of land stated therein. Subsequently, respondents
executed a Promissory Note in the petitioners' favor. However, the respondents’
business closed sometime after the said first MOA, hence the IPO of respondents
failed to materialize. For this reason, the respondents entered into a second
Memorandum of Agreement (Second MOA) with petitioners, representing the
Yupangco Family, on December 11, 2003. He acknowledged his and OJDTC's
outstanding obligation to petitioners in the amount of US$1,242,229.77. One notable
point in said Second MOA reads “The FIRST PARTY (respondents) hereby undertakes
to exert best effort to fully pay its obligations.”

ISSUE(S): Whether or not the potestative condition in the Second MOA rendered the
obligation void.

RULING: NO. The SC affirmed that the RTC’s ruling that the phrase "to exert best
effort to fully pay its obligation" is a potestative condition, which is void under Article
1308 of the New Civil Code since the reimbursement of the plaintiffs' investment was
left to the respondents’’ will. A "potestative condition" is a condition the fulfillment
of which depends exclusively upon the will of the debtor, in which case, the conditional
obligation is void. Article 1182 of the Civil Code reads “When the fulfillment of the
condition depends upon the sole will of the debtor, the conditional obligation shall be
void. If it depends upon chance or upon the will of a third person, the obligation shall
take effect in conformity with the provisions of this Code.” In a potestative condition
imposed on the obligation's fulfillment, the condition is voided, leaving unaffected the
obligation itself.
In this case, the condition found in the Second MOA, that is, the full payment of the
obligation through the best efforts of OJDTC and Oscar is a pure potestative condition,
dependent on the sole will or discretion of the respondents. However, the condition
is imposed on the performance or fulfillment of the respondents’ obligation to
reimburse or pay their outstanding obligation to the petitioner, and not on the
perfection of the contract/obligation. Hence, only the condition of providing for
payment on a "best effort" basis is treated as void, and the obligation to return
petitioners' money is unaffected.