Ferrazzini v Gsell | 1916 | Trent, J.

Facts: Carlos Gsell is engaged in the manufacture of umbrellas, matches and hats; Anselmo Ferrazzini was employed by Gsell as foreman in the umbrella factory; At some point, he was discharged by sell so he filed this case to recover damages for an alleged wrongful discharge; Gsell, for his part admitted he discharged Ferrazzini without written advice of six months in advance as provided in the contract; But, he says the discharge was lawful on account of absence ,unfaithfulness, and disobedience of orders; He also sought a counterclaim for further alleged breach by Ferrazzini after his discharge (that he cannot enter into employment of any enterprise in the Philippines, during his employment and within 5 years after termination except when given written permission; if he does, he will pay Gsell P10k; Gsell was employed in cement industry); Trial court favoured Ferrazzini and declined to consider the counterclaim, so Gsell appealed. Issues: 1. Was the discharge lawful? Yes. 2. Is the stipulation preventing Ferrazzini to enter into the employment of any enterprise in the Philippine Islands, whatever, save and except after obtaining special written permission therefor valid? No, against public policy. Ratio: 1. The discharge was lawful. a. Court looked into whether Gsell had just cause to discharge Ferrazzini; Gsell has to prove justification for his act because it was in contravention of the six-month clause in the contract; if it was without just cause, it was in violation of the contract and Ferrazzini is entitled to recover; b. Court based the justifications on the testimonies of the parties; For Ferrazzinis absences during working hours for the purpose of drinking: Ferrazini he said he was allowed by Gsell in the morning ten or fifteen minutes during the hot season to absent himself to have a drink of beer or whiskey, and the same in the afternoon and that the manager (whose name is Bender) merely told him not to do it in such an ostentatious manner; Gsell he directed the manager to discontinue the habit of during; Bender he expressly told Ferrazini not to go out without permission; 1. For his unfaithfulness: Ferrazzini he admitted saying to persons at supper in the mess hall that Gsell measured the cloth for the umbrellas, that it is his idea that Gsell has noconfidence in his employees; but he testified that he did not remember saying that Specht, the foreman, was not receiving sufficient salary; Specht and another co-worker, however, testified positively to what he said about Specht; c. All the foregoing shows a conduct on the part of Ferrazzini inconsistent with the due and faithful performance of his duties as an employee of Gsell; former is at times a foreman and at times in charge of important departments of the factory wherein four hundred employees work, Gsell did only had the right to prohibit the drinking but also his duty for his own interests and the safety of his other employees; d. Although, in the record, Gsell terminated Ferrazzini on account of the conversation at the mess, he, at the time of the discharge, was authorized to take into consideration the latters whole course of conduct in determining whether the contract of employment should be terminated; 2. The stipulation is unlawful for being against public policy;

a. Public policy the principle under which the freedom of contract or private dealing is restricted by law for the good of the public; intended that the principle of the law which holds that no subject or citizen can lawfully do that which has a tendency to be injurious to the public or against the public good; b. Case distinguished from Gsell v Koch there the provisions in the contract against the engaging in the manufacturing of straw hats (by the terminated employee, being the same business the employer is in) were held to be reasonably necessary for the protection of the plaintiff and not oppressive; c. Contract in undue or unreasonable restraint of trade unenforceable because they are repugnant to the established public policy; illegal in the sense that the law will not enforce them LEAL vs IAC G.R. No. L-65425 November 5, 1987

FACTS: -Reversal of IAC in its Resolution dated Sept. 27, 1983 of the earlier decision dated June 28, 1978 penned by Justice Paras of the Court of Appeals, in the same case, affirming the trial courts dismissal of the private respondents complaint. March 21, 1941: Vicente Santiago and Cirilio Leal entered into a contract which was called the Compraventa where V. Santiago sold to the latter three parcels of land. Cited in the contract was: En caso deventa, no podran vender a otros dichos tres lotes de terrenosino al aqui rendedor Vicente Santiago, o los herederos o sucesoresde estepor el niismo precio de P5,600 siempre y cuando estos ultimos pueden hacerla compra. 1960-1965: Parts of the properties were mortgaged or leased to the co-petitioners or to third party 1966-1957: V. Santiago offered re-purchase of the properties but the petitioner refused the offer August 2, 1967: V. Santiago instituted complaint for specific performance. The trial court (Court of First Instance in Q.C.) rendered its decision dismissing the case for it was thought to be a premature case or that there was no sale at all. Therespondent was not contented at all that he filed another complaint in the Court of Appeals June 28, 1978: Justice Paras of the Court of Appeals affirmed the trial courts dismissal of respondents complaint. Included in the decision was the order for the cancellation of the annotations at the back of the Transfer Certificates of Title issued which prohibits the petitioner to sell the land to a third party. Respondents filed a motion for reconsideration and an opposition to the petitioners (Leal) motion to amend but the incidents were not resolved since the Court of Appeals was abolished and was replaced by the IAC. Sept. 27, 1983: The June 28, 1978 decision of the CA was reversed. The petitioners were to accept P5,600 for re-purchase of Land and they should pay rental of P3,087.50 as rental from 1967-1968 and the same amount every year after. The Transfer Certificate of Title No. 42535 was ordered to be in the names of V.Santiago & Luis Santiago and to issue another TCT to S. Santiago.

ISSUE/S: Whether or not it is quoted in the Compraventa that the private respondent has the right of repurchase. Whether the annotations of the prohibition to sell at the back of the TCTs should be cancelled? HELD: The Resolution dated Sept. 27, 1983 was SET ASIDE and the Decision promulgated on June 28, 1978 is reinstated. The annotations of the prohibition to sell at the back of TCT Nos. 138837-138842 were cancelled cost against respondent. For the following reasons:-In IACs resolution: repurchase was given birth by the phrase siempre y cuandoultimos pueden hacer la compra (when the buyer has money to nd buy). Under Article1508 (2 Paragraph) there is agreement as to the time, although it is indefinite,

therefore the right should be exercised within ten years, because the law does not favor suspended ownership.-The right to redeem must be expressly stipulated in the contract of sale in order that it may have legal existence. Under Article 1606 of the Civil Code of the Philippines the right to redeem or repurchase, in the absence of an express agreement as to time, shall last four years from the date of contract.-Prohibition to sell the lots to persons other than the vendor (back of TCT) will be cancelled or deleted since the prohibition to alienate should not exceed 20 years otherwise there would be subversion of public policy.-Civil Code of the Phil. Art. 1306 includes that contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. Public order signifies the public weal public policy. Essentially, therefore, public order and public policy mean one and the same thing. One such condition which is contrary to public policy is the present prohibition to self to third parties or perpetual restriction to the right of ownership specifically the owners right to freely dispose of his properties. Sesbreno vs. Court of Appeals GR 89252, 24 May 1993

FACTS: Petitioner Sesbreno made a money market placement in the amount of P300,000 with the Philippine Underwriters Finance Corporation (PhilFinance), with a term of 32 days. PhilFinance issued to Sesbreno the Certificate of Confirmation of Sale of a Delta Motor Corporation Promissory Note, the Certificate of Securities Delivery Receipt indicating the sale of the note with notation that said security was in the custody of Pilipinas Bank, and post-dated checks drawn against the Insular Bank of Asia and America for P304,533.33 payable on March 13, 1981. The checks were dishonoured for having been drawn against insufficient funds. Pilipinas Bank never released the note, nor any instrument related thereto, to Sesbreno; but Sesbreno learned that the security which was issued on April 10, 1980, maturing on 6 April 1981, has a face value of P2,300,833.33 with PhilFinance as payee and Delta Motors as maker; and was stamped non-negotiable on its face. As Sesbreno was unable to collect his investment and interest thereon, he filed an action for damages against Delta Motors and Pilipinas Bank. Delta Motors contents that said promissory note was not intended to be negotiated or otherwise transferred by Philfinance as manifested by the word "non-negotiable" stamped across the face of the Note. ISSUE: Whether the non-negotiability of a promissory note prevents its assignment? RULING: A negotiable instrument, instead of being negotiated, may also be assigned or transferred. The legal consequences of negotiation and assignment of the instrument are different. A non-negotiable instrument may not be negotiated but may be assigned or transferred, absent an express prohibition against assignment or transfer written in the face of the instrument. The subject promissory note, while marked "non-negotiable," was not at the same time stamped "non-transferable" or "non-assignable." It contained no stipulation which prohibited Philfinance from assigning or transferring such note, in whole or in part. Sy Suan vs Regala G.R. No. L-9506 June 30, 1956 Facts: That on April 11, 1953, defendant Sy Suan, who was at the time president and general manager of his co-defendant [Price Incorporated] and owner of practically all the capital stock of said corporation, executed in favor of plaintiff a special power of attorney authorizing the latter to prosecute the former's applications for import licenses with the Import Control Office At the time of the execution of the said power of attorney, defendants had pending in the Import Control Office the following applications:

a. Application No. 001705 for industrial starch in the sum of $16,477.34 filed on April 6, 1953 in the
name of defendant, Price Incorporated;

b. Application No. 001797 for industrial starch in the sum of $21,678.48 filed on April 6, 1953 in the
name of defendant Price Incorporated; and

c. Application No. 001800 for industrial starch in the sum of $15,778.11 filed on April 6, 1953 in the
name of defendant Price Incorporated Pursuant to said special power of attorney, plaintiff followed up and prosecuted the above-mentioned applications with and through the different offices and divisions of the Import Control Office, conferring with the corresponding Import Control officials. On or about May 19, 1953, the Import Control Office issued the following licenses as a result of the effort made by the herein plaintiff: License No. 15030 on Application No. 001795; License No. 15029 of Application No. 001797; and License No. 15028 on Application No. 001800, the amount of which had been reduced to $11,838.50. Shortly before the execution of the special power of attorney above reffered to, plaintiff and defendant Sy Suan agreed verbally that plaintiff's services for securing the said licenses would be paid or compensated with ten (10%) per cent of the total value of the amounts approved on the said applications. On May 19, 1953, upon the release of the afore-mentioned licenses, defendants paid the plaintiff the sum of P3,000.00 on account of the latter's services. Issue: Whether or not the parole contract of renumeration is valid Held: It is undeniable that the contract in question sought to be enforced by the respondent and assailed by the petitioners as null and void for being against public policy is what is commonly known as 10% contracts which the press decries and the public condemns as inimical to public interest. It is a general rule that agreements against public policy are illegal and void. Under the principles relating to the doctrine of public policy, as applied to the law of contracts, courts of justice will not recognize or uphold any transaction which, in its object operation, or tendency, is calculated to be prejudicial to the public welfare, to sound morality, or to civic honesty. Such intervention by the intermediaries would not render an unmeritorious application deserving, nor undeserving applications meritorious, but would serve no other purpose than to influence or possibly corrupt, in unmeritorious cases, the judgment of the public official or officials performing an act or service connected with the issuance of import license or quota allocation an eventuality which the law precisely sought to avoid. Sources: http://www.lawphil.net/judjuris/juri1959/jun1959/gr_l-9506_1959.html http://legalmatters101.blogspot.com/2010/12/sesbreno-vs-ca.html http://www.scribd.com/doc/89370362/Ferrazzini-v-Gsell http://www.scribd.com/doc/74748318/leal-v-iac