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    Insular Life Vs Toyota

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    albycadavis
    The Supreme Court of the Philippines ruled that a compromise agreement between Toyota Bel-Air and Insular Life Assurance Company did not take effect because Toyota failed to comply with suspensive conditions of the agreement. The agreement required Toyota to issue post-dated checks and post a surety bond to settle an unlawful detainer case, but Toyota did not fulfill these conditions. As such, the parties were to stand as if the conditional obligation never existed, and Insular Life was not obligated to end litigation against Toyota. The Court affirmed the writ of execution against Toyota's properties in favor of Insular Life.

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    Insular Life Vs Toyota

    Uploaded by

    albycadavis
    67 views2 pages
    The Supreme Court of the Philippines ruled that a compromise agreement between Toyota Bel-Air and Insular Life Assurance Company did not take effect because Toyota failed to comply with suspensive conditions of the agreement. The agreement required Toyota to issue post-dated checks and post a surety bond to settle an unlawful detainer case, but Toyota did not fulfill these conditions. As such, the parties were to stand as if the conditional obligation never existed, and Insular Life was not obligated to end litigation against Toyota. The Court affirmed the writ of execution against Toyota's properties in favor of Insular Life.

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    14. Insular life vs Toyota

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    The Supreme Court of the Philippines ruled that a compromise agreement between Toyota Bel-Air and Insular Life Assurance Company did not take effect because Toyota failed to comply with suspensive conditions of the agreement. The agreement required Toyota to issue post-dated checks and post a surety bond to settle an unlawful detainer case, but Toyota did not fulfill these conditions. As such, the parties were to stand as if the conditional obligation never existed, and Insular Life was not obligated to end litigation against Toyota. The Court affirmed the writ of execution against Toyota's properties in favor of Insular Life.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    67 views2 pages

    Insular Life Vs Toyota

    Uploaded by

    albycadavis
    The Supreme Court of the Philippines ruled that a compromise agreement between Toyota Bel-Air and Insular Life Assurance Company did not take effect because Toyota failed to comply with suspensive conditions of the agreement. The agreement required Toyota to issue post-dated checks and post a surety bond to settle an unlawful detainer case, but Toyota did not fulfill these conditions. As such, the parties were to stand as if the conditional obligation never existed, and Insular Life was not obligated to end litigation against Toyota. The Court affirmed the writ of execution against Toyota's properties in favor of Insular Life.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 2

    Doctrine: When a contract is subject to a suspensive condition, its

    birth or effectivity can take place only if and when the event which
    constitutes the condition happens or is fulfilled. If the suspensive
    condition does not take place, the parties would stand as if the
    conditional obligation has never existed.
    Case Title: Insular Life Assurance Co., Ltd. vs. Toyota Bel-Air, Inc 550
    SCRA 70 (2008)
    Facts: Toyota Bel-Air, Inc. (Toyota) entered into a Contract of Lease
    over a 3,700sqm lot and building owned by Insular Life Assurance
    Company, Ltd. (Insular Life). Upon expiration of the lease, Toyota remained
    in possession of the property. Despite repeated demands, Toyota refused
    to vacate the property. Thus, Insular Life filed a complaint for unlawful
    detainer against Toyota in the MeTC. MeTC issued a writ of execution
    against Toyota, levying on the latter9s real and personal properties as
    well as garnishing its bank accounts. Toyota and Insular Life entered into
    a Compromise Agreement whereby Toyota was obligated to pay Insular
    Life P8 million through: (1) delivery of 3 Toyota vehicles worth P1.5M, (2)
    issuance of 12 post dated corporate checks to answer for the balance of
    P6.5M in 12 monthly installments, and (3) posting of a surety bond which
    shall guarantee payment of installments.
    Once all the conditions are met, there will be lifting of the
    garnishment.
    Insular Life maintains that Toyota failed to comply with the
    conditionals relating to the postdated checks and surety bond. However,
    Toyota insisted that the Compromise Agreement should be given
    effect as there was already substantial compliance of the conditions
    since the compromised amount was reduced from P8M to P6.5M upon
    delivery of the 3 Toyota vehicles.
    Issue: WON the Compromise Agreement takes effect?
    Held: No. When a contract is subject to a suspensive condition, its
    birth or effectivity can take place only if and when the event which
    constitutes the condition happens or is fulfilled. If the suspensive
    condition does not take place, the parties would stand as if the
    conditional obligation has never existed.
    In this case, the Compromise Agreement clearly stipulates that it shall
    become valid and binding only upon the occurrence of all the conditions in
    the agreement. Thus, the issuance of 12 postdated checks and the
    posting of a surety bond are positive suspensive conditions of the
    Compromise Agreement, the non-compliance with which was not a
    breach but a situation that prevented the obligation under the
    Compromise Agreement from acquiring obligatory force. For its non-
    fulfillment, there was no contract or agreement to speak of. Since Toyota
    was unable to comply with the last two conditions of the agreement,
    which were suspensive conditions, Insular Life cannot be compelled to
    comply with its obligation to end the present litigation. No right in favor
    Toyota arose and no obligation on the part of Insular Life was created.
    WHEREFORE, the petition is hereby GRANTED. The Decision dated
    September 30, 1998 and Order dated March 5, 1999 of the Regional Trial
    Court, Branch 148, Makati City are REVERSED and SET ASIDE. The Writ
    of Execution dated August 12, 1998 as clarified in the Order dated October
    28, 1998 of the Metropolitan Trial Court, Branch 63, Makati, is
    declared VALID.
    Double costs against petitioner.
    SO ORDERED.

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