2-BAIRD Navidad fell onto the tracks and was killed when a train came and ran over
Navidad fell onto the tracks and was killed when a train came and ran over him.
LEUNG BEN vs. P. J. O'BRIEN
FACTS ; Upon December 12, 1917, an action was instituted in the Court of First
Instance of the city of Manila by P. J. O'Brien to recover of Leung Ben the sum of
P15,000 alleged to have been lost by the plaintiff to the defendant in a series of
gambling, banking and percentage games conducted ruing the two or three
months prior to the institution of the suit. In his verified complaint the plaintiff
asked for an attachment, under section 424, and 412 of the Code of Civil
Procedure, against the property of the defendant, on the ground that the latter was
about to depart from the Philippine islands with intent to defraud his creditors. This
attachment was issued; and acting under the authority thereof, the sheriff attached
the sum of P15,000 which had been deposited by the defendant with the
International Banking Corporation. The defendant thereupon appeared by his
attorney and moved the court to quash the attachment. Said motion having
dismissed in the Court of First Instance, the petitioner, Leung Ben, the defendant
in that action, presented to this court, upon January 8, 1918 his petition for the writ
of certiorari directed against P. J. O'Brien and the judges of the Court of First
Instance of the city of Manila whose names are mentioned in the caption hereof.
The prayer is that the Honorable James A. Ostrand, as the judge having
cognizance of the action in said court be required to certify the record to this court
for review and that the order of attachment which had been issued should be
revoked and discharged. With costs.
ISSUE; Whether the statutory obligation to restore money won at gaming an
obligation arising from "contract, express or implied"
RULING; He cause of action stated in the complaints in the court below is based
on a contract, express or implied and is therefore of such nature that the court had
authority to issue writ of attachment his a duty in the nature of debt and is properly
classified as an implied contract. It is well- settled by the English authorities that
money lost in gambling or by lottery, if recoverable at all, can be recovered by the
loser in an action of indebitatus assumpsit for money had and received. It is only
necessary in this connection to observe that the most conspicuous division is that
which comprises duties in the nature of debt. The characteristic feature of these
obligations is that upon certain states of fact the law imposes an obligation to pay
a sum certain of money; and it is characteristic of this obligation that the money in
respect to which the duty is raised is conceived as being equivalent of something
taken or detained under circumstances giving rise to the duty to return or
compensate therefore. The proposition that no one shall be allowed to enrich
himself unduly at the expense of another embodies the general principle here
lying at the basis of obligation.
G.R. NO. L-3756
SAGRADA ORDEN VS NACOCO
Facts:
Plaintiff's land was acquired during the Japanese occupation by Taiwan Tekkosho
for the sum of P140,000, and the title was issued in the Japanese corporation's
name. After liberation, the Alien Property Custodian of USA took possession,
control, and custody of the land by virtue of the Trading with the Enemy Act as it
belonged to an enemy national. Then it was occupied by NACOCO. Plaintiff then
claimed through an action in court. The parties then presented a joint petition
where plaintiff claims that the sale in favor of Taiwan Tekkosho was void as it was
executed under threats, duress, and intimidation. It was agreed that the title would
be cancelled and re-issued in the name of Plaintiff. It was also agreed that the
interest of the Alien Property Custodian of USA over the property be cancelled
and that NACOCO leave the premises. NACOCO does not contest that he is
liable for rent after the judgment was rendered with regard to plaintiff's claim over
the property.
Issue:
W/N Nacoco can be liable for rentals from the date when it began to occupy the
premises to the date it vacated it.
Ruling:
No, NACOCO is not liable for rentals prior to the Judgment. For NACOCO to be
liable at all, its obligations must arise from any of the sources of obligations,
namely law, contract or quasi contract, crime or negligence. NACOCO is not guilty
of any offense at all because it entered the premises and occupied it with the
permission of the entity that had the legal control and administration thereof, the
Alien Property Custodian of USA.
4. CHUA
Vasquez v. De Borja
FACTS: An action was commenced in the Court of First Instance by De Borja
against Vazquez to recover a total sum of P4,702.70 upon three alleged causes of
action;
First, that in or about the month of January, 1932, the defendants jointly and
severally obligated themselves to sell to the plaintiff 4,000 cavans of palay at
P2.10 per cavan, to be delivered during the month of February, 1932, the said
defendants having subsequently received from the plaintiff in virtue of said
agreement the sum of P8,400; that the defendants delivered to the plaintiff during
the months of February, March, and April, 1932, only 2,488 cavans of palay of the
value of P5,224.80 and refused to deliver the balance of 1,512 cavans of the
value of P3,175.20 notwithstanding repeated demands. Second and third, plaintiff
suffered damages for the refusal of delivery by the defendant.
The defendant Antonio Vazquez answered the complaint, denying having entered
into the contract mentioned in the first cause of action in his own individual and
personal capacity, either solely or together with his codefendant Fernando
Busuego, and alleging that the agreement for the purchase of 4,000 cavans of
palay and the payment of the price of P8,400 were made by the plaintiff with and
to the Natividad-Vasquez Sabani Development Co., Inc.,
ISSUE: Whether the plaintiff filed an action to the right respondent
RULING: No, It is well known that a corporation is an artificial being invested by
law with a personality of its own, separate and distinct from that of its stockholders
and from that of its officers who manage and run its affairs. The mere fact that its
personality is owing to a legal fiction and that it necessarily has to act thru its
agents, does not make the latter personally liable on a contract duly entered into,
or for an act lawfully performed, by them for an in its behalf.
MAIN POINT: The legal fiction by which the personality of a corporation is created
is a practical reality and necessity. Without it no corporate entities may exists and
no corporate business may be transacted. Such legal fiction may be disregarded
only when an attempt is made to use it as a cloak to hide an unlawful or fraudulent
purpose.
5 CRUZ
LRTA v Navidad
G.R. No. 145804, February 6, 2003
Facts: Navidad was drunk when he entered the boarding platform EDSA LRT. He
got into an altercation with Escartin, the security guard. They had a fistfight and
The Heirs of Navidad filed a complaint for damages against Escartin, the train
driver (Roman), the LRTA, the Metro Transit Organization and Prudent Security
Agency (Prudent). LRTA and Roman filed a counterclaim against Navidad and a
cross-caim against Escartin and Prudent. Prudent denied liability and averred that
it had exercised due diligence in the selection and supervision of its security
guards. The trial court found Prudent and Escartin liable for damages to the heirs.
Upon their appeal, Prudent was exonerated by the CA and instead held the LRTA
and the train driver Romero liable. The reasoning of the CA was that a contract of
carriage already existed between Navidad and LRTA (by virtue of his having
purchased train tickets) and the liability was caused by the mere fact of Navidad's
death after being hit by the train being managed by the LRTA and operated by
Roman. The CA also blamed LRTA for not having presented expert evidence
showing that the emergency brakes could not have stopped the train on time.
Issue: Whether or not LRTA and/or Roman is liable for the death.
Whether or not Escartin and/or Prudent are liable.
Ruling: Yes, LRTA (but not Roman). The foundation of LRTA's liability is the
contract of carriage and its obligation to indemnify the victim arising from the
breach of that contract by reason of its failure to exercise the high diligence
required of a common carrier.
No, fault was not established on the part of Escartin to make hime liable based on
Tort under Art. 2176 of the New Civil Code. And consequently, there is nothing to
link Prudent to the death of Navidad for the reason that their employee’s
negligence has not been duly proven. If Prudent is to be held liable, it would be for
a tort under Art. 2176 in conjunction with Art. 2180. If the fault of the employee
Escartin was established, the employer, Prudent, would be held liable on the
presumption that it did not exercise the diligence of a good father of the family in
the selection and supervision of its employees.
6 DARLUCIO
PEOPLE’S CAR VS COMMANDO SECURITY G.R. L-36840
FACTS:
People’s Car entered into a contract with Commando Security to safeguard and
protect the business premises of the plaintiff from theft, pilferage, robbery,
vandalism, and all other unlawful acts of any person/s prejudicial to the interest of
the plaintiff. On April 5, 1970, around 1:00am, defendant’s security guard on duty
at plaintiff’s premises, without any authority, consent, approval, or orders of the
plaintiff and/or defendant brought out the compound of the plaintiff a car belonging
to its customer and drove said car to a place or places unknown, abandoning his
post and while driving the car lost control of it causing it to fall into a ditch. As a
result, the car of plaintiff’s customer, which had been left with plaintiff for servicing
and maintenance, suffered extensive damage besides the car rental value for a
car that plaintiff had to rent and make available to its customer, Joseph Luy, to
enable him to pursue his business and occupation.
ISSUE: Whether the plaintiff is liable to its customer for the damages caused
HELD:
Yes. Plaintiff was in law liable to its customer for the damages caused the
customer’s car, which had been entrusted into its custody. Plaintiff therefore was
in law justified in making good such damages and relying in turn on defendant to
honor its contract and indemnify it for such undisputed damages, which had been
caused directly by the unlawful and wrongful acts of defendant’s security guard in
breach of their contract. As ordained in Article 1159, Civil Code, "obligations
arising from contracts have the force of law between the contracting parties and
should be complied with in good faith."
7 FLORES
PNNC v CA
FACTS: The petitioners had refused to pay the rental fees as stipulated in the
contract of lease in a parcel of land that was owned by the private respondents.
The petitioner had retrieved a Temporary Use Permit from the Ministry of Human
Settlements for a proposed rock crushing project in 1986 January 7 and on 1986
January 16 the private respondents had request the first annual payment of
P240,000. The respondents had contended that there can be no more
negotiations on the lease of the property due to the existing contract between the
respondent and the petitioner. However, the petitioner had disagreed when the
call for payment should take effect, stating that the payment of rental will start on
the date of issuance of industrial clearance from the Ministry of Human
Settlements and not from when the signing of the contract had taken place. The
private respondents had no change of mind and insisted on the payment. The
petitioner had still disagreed and contends that their party should only pay
P20,000 as rental payments on the first month once the permit from the Ministry of
Human Settlements was issued. The trial court had decided that the private
petitioners are obliged to pay the respondents P492,000 which was equivalent to
rent for two years with legal interest plus attorney’s fees. The petitioner had filed
an appeal to the CA alleging that the trial court had erred in its decision.
ISSUE: Whether the trial court erred in its decision for the petitioner to be obliged
to pay the rental fees once the contract between themselves and the private
respondents was perfected.
RULING: Negative, the Court of Appeals had ruled that the petitioners in this case
are obliged to pay the rental fees once the contract between themselves and the
private respondents had been perfected. According to Article 1156 of the Civil
Code of the Philippines, it states, “An obligation is a juridical necessity to give, to
do or not to do”. The court had incorporated this provision in its decisions
contending that the petitioners were obliged under the obligation to give rather
than an obligation to do which was implied by the petitioner. The obligation to give
arises from an obligation with a prestation that consists in the delivery of a
movable or immovable property that creates a real right or for the use of the
recipient, or for a simple possession, or in order to return such thing to its owner.
Therefore, the obligation of the payment of rental fees should be very much
obliged upon the petitioners.
8 GENON
Ferrazini v. Gsell, 34 Phil 693, August 10, 1916
FACTS:
The issue started when defendant, Gsell, was alleged to wrongfully discharge the
plaintiff, Ferrazini, who had been employed by the defendant for an indefinite time,
admitting that he discharged the plaintiff without written advice, however,
asserting that such discharge is lawful on account of absence and disobedience of
the plaintiff. The previous judgment was in favor of the plaintiff, hence, the
defendant now seeks an appeal. The defendant asserts that in their contract, the
petitioner cannot enter into an employment within five years after the termination
of their agreement except when given permission by the plaintiff, if he does, he
will pay Gsell, P10,000. However, it is discovered that the plaintiff has contracted
another employment, hence, violating their agreement.
ISSUE: Whether or not the contract is valid.
RULING:
No. It is not valid because it is contrary to public policy. The Court ruled that it is
the policy of the law that the freedom of persons to enter into contracts shall
not be lightly interfered with, as long as it does not conflict with the morals
of the times or contravenes the interest of the society. Defining public policy,
is the law of persons the public, of social and legal interest, that which is
permanent and essential of the institutions, cannot be left to his own will.
The doctrine that a contract in restraint of trade is void as against public policy is
based on two principal grounds:
1.) the injury to the public by being deprived of the restricted party’s industry;
2.) and 2.) the injury to the party himself by being precluded from pursuing his
occupation, preventing him from supporting his family and/or himself.
Moreover, stressing a rule in Gibbs v. CGCB, the court held that public welfare is
first considered. Therefore, the contract between the plaintiff and defendant is
clearly one that is against public policy because it deprives the former in
obtaining a livelihood.
9. HALID
DAISY B. TIU v. PLATINUM PLANS PHIL.
FACTS: Respondent Platinum Plans Philippines, Inc. is a domestic corporation
engaged in the pre-need industry. From 1987 to 1989, petitioner Daisy B. Tiu was
its Division Marketing Director and re-hired petitioner as Senior Assistant Vice-
President and Territorial Operations Head in charge of its Hongkong and Asean
operations. The parties executed a contract of employment valid for five years.
Petitioner stopped reporting for work. She became Vice-President for Sales of
Professional Pension Plans, Inc., a corporation engaged also in the pre-need
industry.
Respondent sued petitioner for damages before the RTC of Pasig City, violated
the non-involvement clause in her contract of employment, Petitioner countered
that the non-involvement clause was unenforceable for being against public order
or public policy.
ISSUE: Whether the Court of Appeals erred when THE VALIDITY OF THE NON-
INVOLVEMENT CLAUSE IN PETITIONER'S CONTRACT CONSIDERING THAT
THE PERIOD FIXED THEREIN IS VOID FOR BEING OFFENSIVE TO PUBLIC
POLICY
RULING: No. A non-involvement clause is not necessarily void for being in
restraint of trade as long as there are reasonable limitations as to time, trade, and
place.
In this case the non-involvement clause has a time limit: two years from the time
petitioner's employment with respondent ends. It is also limited as to trade, since it
only prohibits petitioner from engaging in any pre-need business akin to
respondents. Petitioner entered into the contract on her own will and volition.
Thus, she bound herself to fulfil not only what was expressly stipulated in the
contract, but also all its consequences that were not against good faith, usage,
and law. Prohibiting non-employment for two years was valid and enforceable
considering the nature of respondent's business. Not being contrary to public
policy, the non-involvement clause, which petitioner and respondent freely agreed
upon, has the force of law between them, and thus, should be complied with in
good faith.
10-Hammisani
Del Castillo VS Richmond
FACTS:
Richmond, defendant, who owned a Botica Americana hired Del Castillo, plaintiff,
as a pharmacist. They made a contract for rendering services, one of the
stipulation in the said contract is that Del Castillo shall not open, nor own, nor
have any interest directly or indirectly in any other drugstore either in his own
name or in the name of another; nor have any connection with or be employed by
any other drugstore as pharmacist or in any capacity in any drugstore situated
within a radius of four miles from the district of Legaspi, municipality and Province
of Albay. The plaintiff alleges that this questioned stipulation of said contract
constitute an illegal and unreasonable restriction upon his liberty to contract, are
contrary to public policy, and are unnecessary in order to constitute a just and
reasonable protection to the defendant, and asked that the same be declared null
and void and of no effect.
The defendant in his defense he alleges "that during the time the plaintiff was in
the defendant's employ he obtained knowledge of his trade and professional
secrets and came to know and became acquainted and established friendly
relations with his customers so that to now annul the contract and permit plaintiff
to establish a competing drugstore in the town of Legaspi, as plaintiff has
announced his intention to do, would be extremely prejudicial to defendant's
interest.
ISSUE:
WoN the stipulation is legal and reasonable and not contrary to public policy.
RULING:
Yes. In the present case, establishing whether the contract is a reasonable or
unreasonable one, the nature of the business must also be considered.
Considering the nature of the business in which the defendant is engaged, in
relation with the limitation placed upon the plaintiff both as to time and place, the
court decide, that such limitation is legal and reasonable and not contrary to public
policy.
Makati Stock Exchange Vs Miguel Campos
GR. 138814
FACTS: SEC Case No. 02-94-4678 was instituted on 10 February 1994 by
respondent Miguel V. Campos, who filed with the Securities, Investigation and
Clearing Department (SICD) of the Securities and Exchange Commission (SEC),
a Petition against herein petitioners Makati Stock Exchange, Inc. (MKSE) and
MKSE directors, Ma. Vivian Yuchengco, et al. Respondent, in said Petition,
sought: (1) the nullification of the Resolution dated 3 June 1993 of the MKSE
Board of Directors, which allegedly deprived him of his right to participate equally
in the allocation of Initial Public Offerings (IPO) of corporations registered with
MKSE; (2) the delivery of the IPO shares he was allegedly deprived of, for which
he would pay IPO prices; and (3) the payment of ₱2 million as moral damages, ₱1
million as exemplary damages, and ₱500,000.00 as attorney’s fees and litigation
expenses.
The SICD issued an Order granting respondent’s prayer for the issuance of a
Temporary Restraining Order to enjoin petitioners from implementing or enforcing
the Resolution of the MKSE Board of Directors. Subsequently issued another
Order on 10 March1994 granting respondent’s application for a Writ of Preliminary
Injunction, to continuously enjoin, during the pendency of SEC Case No. 02-94-
4678, the implementation or enforcement of the MKSE Board Resolution in
question. On 11 March 1994, petitioners filed a Motion to Dismiss respondent’s
Petition based on the following grounds: (1) the Petition became moot due to the
cancellation of the license of MKSE; (2) the SICD had no jurisdiction over the
Petition; and (3) the Petition failed to state a cause of action.
The SICD denied petitioner’s Motion to Dismiss. Petitioners again challenged
Order of SICD before the SEC en banc through another Petition for Certiorari. The
SEC en banc nullified the Order of SICD granting a Writ of Preliminary Injunction
in favour of respondent. SEC en banc annulled the Order of SICD in SEC Case
No. 02-94-4678 denying petitioners’ Motion to Dismiss, and accordingly ordered
the dismissal of respondent’s Petition before the SICD. Respondent filed a
Petition for Certiorari with the Court of Appeals.
Petitioners filed a Motion for Reconsideration but was denied by the Court of
Appeals.
Issue: Whether or not the petition failed to state a cause of action.
Ruling: No, A cause of action is the act or omission by which a party violates a
right of another. A complaint states a cause of action where it contains three
essential elements of a cause of action, namely: (1) the legal right of the plaintiff,
(2) the correlative obligation of the defendant, and (3) the act or omission of the
defendant in violation of said legal right. If these elements are absent, the
complaint becomes vulnerable to dismissal on the ground of failure to state a
cause of action. However, the terms right and obligation are not magic words that
would automatically lead to the conclusion that such Petition sufficiently states a
cause of action. Right and obligation are legal terms with specific legal meaning. A
right is a claim or title to an interest in anything whatsoever that is enforceable by
law while an obligation is defined in the Civil Code as a juridical necessity to give,
to do or not to do.
Justice J.B.L. Reyes offers the definition given by Arias Ramos as a more
complete definition: An obligation is a juridical relation whereby a person (called
the creditor) may demand from another (called the debtor) the observance of a
determinative conduct (the giving, doing or not doing), and in case of breach, may
demand satisfaction from the assets of the latter. Art. 1157 of the Civil Code
provides that Obligations arise from (1) Law; (2) Contracts; (3) Quasi-contracts;
(4) Acts or omissions punished by law; and (5) Quasi- delicts. The mere assertion
of a right and claim of an obligation in an initiatory pleading, whether a Complaint
or Petition, without identifying the basis or source thereof, is merely a conclusion
of fact and law. (In the case at bar, although the Petition in SEC Case No. 02-94-
4678 does allege respondent’s right to subscribe to the IPOs of corporations listed
in the stock market at their offering prices, and petitioners’ obligation to continue
respecting and observing such right, the Petition utterly failed to lay down the
source or basis of respondent’s right and/or petitioners’ obligation.)
HSBC v. CATALAN G.R. NO. 159590 October 18, 2004
FACTS: Catalan filed before the RTC, a complaint for sum of money with
damages against petitioner praying that HSBANK and HSBC TRUSTEE be
ordered to pay P20,864,000.00 representing the value of the five checks issued
by Thomson to respondent.
The checks when deposited were returned by HSBANK purportedly for reason of
“payment stopped” pending confirmation, despite the fact that the checks were
duly funded, and that Thomson has demanded the bank to pay the same. Catalan
alleged in the complaint the gross inaction of HSBANK on Thomson’s instructions,
as well as its evident failure to inform Catalan of the reason for its continued
inaction and non-payment of the checks. Catalan invoked Article 19 of the Civil
Code as basis for her cause of action. HSBANK & HSBC TRUSTEE filed Motions
to Dismiss.
The RTC denied the two motions to dismiss.
HSBANK and HSBC TRUSTEE filed separate petitions for certiorari and/or
prohibition with the CA.
The CA dismissed the two petitions for certiorari.
Hence, the present petitions.
ISSUE: Whether or not the payee may sue the drawee bank based on tort under
Art. 19 of the New Civil Code.
RULING: Yes, the payee may sue the bank under Art. 19. In order to be liable
under the abuse of rights principle, three elements must concur, to wit: (a) that
there is a legal right or duty; (b) which is exercised in bad faith; and (c) for the sole
intent of prejudicing or injuring another. It is evident that Catalan is suing HSBANK
and HSBC TRUSTEE for unjustified and willful refusal to pay the value of the
checks.
HSBANK claims that Catalan has no cause of action because under Section 189
of the Negotiable Instruments Law, “a check of itself does not operate as an
assignment of any part of the funds to the credit of the drawer with the bank, and
the bank is not liable to the holder unless and until it accepts or certifies it.”
However, HSBANK is not being sued on the value of the check itself but for how it
acted in relation to Catalan’s claim for payment despite the repeated directives of
the drawer Thomson to recognize the check the latter issued.
Anent HSBC TRUSTEE, it is being sued for the baseless rejection of Catalan’s
claim. When Catalan went to the extent of traveling to Hongkong to deliver
personally the checks, HSBC TRUSTEE summarily disapproved her claim with
nary a reason.
13. LIM
G.F. Equity Inc. vs. Valenzona
FACTS: Valenzona was hired as Alaska’s head coach, the team placed third both
in the Open and All-Filipino PBA Conferences in 1988. While the employment
period agreed upon was for two years commencing on January 1, 1988 and
ending on December 31, 1989, the last sentence of paragraph 3 of the contract
carried the following condition: “If at any time during the contract, the COACH, in
the sole opinion of the CORPORATION, fails to exhibit sufficient skill or
competitive ability to coach the team, the CORPORATION may terminate this
contract.” Valenzona was later advised by the management of GF Equity by letter
of September 26, 1988 of the termination of his services.
Valenzona filed in RTC of Manila against the GF Equity of breach of contract with
damages. The RTC dismissed the complaint stating that the contract was valid
and that he is aware of the bad bargain. In the CA, where he appealed, the
appellate court reversed the RTC’s decision
ISSUE: whether the questioned last sentence of paragraph 3 is violative of the
principle of mutuality of contracts.
RULING: Yes, the assailed stipulation being violative of the mutuality principle
underlying Article 1308 of the Civil Code, it is null and void. The CA bases their
judgment on Article 19 of the Civil Code, or the principle of abuse of rights. The
ultimate purpose of the mutuality principle is thus to nullify a contract containing a
condition which makes its fulfillment or pre-termination dependent exclusively
upon the uncontrolled will of one of the contracting parties.
In the case at bar, the contract incorporates in paragraph 3 the right of GF Equity
to pre-terminate the contract — that "if the coach, in the sole opinion of the
corporation, fails to exhibit sufficient skill or competitive ability to coach the team,
the corporation may terminate the contract." The assailed condition clearly
transgresses the principle of mutuality of contracts. It leaves the determination of
whether Valenzona failed to exhibit sufficient skill or competitive ability to coach
Alaska team solely to the opinion of GF Equity. Whether Valenzona indeed failed
to exhibit the required skill or competitive ability depended exclusively on the
judgment of GF Equity. In other words, GF Equity was given an unbridled
prerogative to pre-terminate the contract irrespective of the soundness, fairness or
reasonableness, or even lack of basis of its opinion.
14. MACAPUGAY
Cuyugan v. Santos
FACTS: Guillerma Cuyugan, deceased, borrowed from Isidro Santos, defendant,
the sum of P3,500.00 and executed a document which states on its face to be a
deed of sale of the land, with reservation in favor of the vendor of the right to
repurchase for the same amount therein. Withal, the aforesaid was intended by
the parties merely to evidence the loan of the nominal purchase price and to serve
as a security for the repayment of the amount of the loan. Guillerma shall continue
to have the possession of the land as a nominal tenant of the defendant at an
annual rental of P420.00 which is the amount equal to the loan’s interest. In 1987,
a year after the foregoing, the she paid the amount of P1,000.00 for the loan
which reduced the nominal rent to P300.00 per annum. Peaceably on possession
of the land, her son, plaintiff Eutiquino Cuyugan, received a notice from the
defendant requiring him for an annual payment of P420.00 on which he refused.
Thereafter, the former was threatened by the latter by ejecting him from the land
and set up a claim of ownership himself. The plaintiff offered to pay the balance of
the amount that his mother owned by virtue of the right to repurchase that was
agreed upon the deed of sale, but the defendant turned down. A demurer to the
complaint was filed by the defendant which was sustained by the court alleging
that the period of the right to repurchase has long been expired.
ISSUE: Whether or not the demurer should be sustained or overruled by the
court.
RULING: The Supreme Court ruled that the demurer of evidence should be
overruled. What should be given force is the intention of the parties and not the
provisions of the instruments on its face. Under the provisions of contracts, for a
valid contract to exists, there should be: (1) consent; (2) cause; and (3)
consideration. In the case at bar, what was given consent by both parties was that
the deed of sale was only in consideration for a contract or mortgage. The court
pointed out that the evidence explicitly established that both parties treated such
contract as a loan rather than a deed of sale. Provided herein was when Guillerma
paid P1,000.00 to the defendant, thereby lowering the annual rental to P300.00.
This transaction showed that the treatment and intention of the parties was indeed
as a security for the loan and not as a deed of sale.
15 MUSA
PELAYO v. LAURON
FACTS: On November 23, 1906, Arturo Pelayo, a physician, filed a complaint
against Marcelo and Juana Abella. He alleged that on October 13, 1906 at night,
Pelayo was called to the house of the defendants to assist their daughter-in-law
who was about to give birth to a child. Unfortunately, the daughter-in-law died as a
consequence of said childbirth. Thus, the defendant refuses to pay. The
defendants argue that their daughter-in-law lived with her husband independently
and in a separate house without any relation, that her stay there was accidental
and due to fortuitous event.
ISSUE: Whether or not the defendants should be held liable for the fees
demanded by the plaintiff upon rendering medical assistance to the defendants’
daughter-in-law.
RULING: No. The Court held that the rendering of medical assistance is one of
the obligations to which spouses are bound by mutual support, expressly
determined by law and readily demanded. Obligations arising from law are not
presumed. Those expressly determined in the Code or in special law, etc., are the
only demandable ones. Therefore, there was no obligation on the part of the in-
laws but rather on the part of the husband who is not a party.
16 OCENA
Barredo v. Garcia, 73 phil. 607
FACTS: On May 3, 1936, there was a head-on collision between a taxi of the
Malate taxicab driven by Pedro Fontanilla and a carretela guided by Pedro
Dimapilis. The carretela was over-turned, and one of the passengers, Faustino
Garcia, suffered injuries and died 2 days later. A criminal action was filed against
Fontanilla, and was convicted. The court in the criminal case granted the petition
to reserve the civil action. Parents of the deceased, later, filed a civil action
against Barredo, the proprietor of the Malate Taxicab and employer of Fontanilla,
making him primarily and directly responsible. It is undisputed that Fontanilla’s
negligence was the cause of accident, as he was driving on the wrong side of the
road at high speed, and there was no showing that Barredo exercised the
diligence of a good father of a family. Main theory of the defense is that the liability
of Barredo is only subsidiary under the RPC and since no civil action was filed
against Fontanilla, he cannot be held responsible in the case.
ISSUE: Whether plaintiffs may bring separate civil action against Barredo, thus
making him primarily and directly responsible under Article 1903 of the civil code
as an employer of Fontanilla.
RULING: Yes. The taxi driver was found guilty of criminal negligence, so that if he
had even sued for his civil responsibility arising from the crime, he would have
been held primarily liable for civil damages, and Barredo would have been held
subsidiarily liable for the same. But the plaintiffs are directly suing Barredo, on his
primary responsibility because of his owned presumed negligence, which he did
not overcome, under Article 1903. Thus, there were two liabilities of Barredo: first,
the subsidiary one because of the civil liability of the taxi driver arising from the
latter’s criminal negligence; and second, Barredo’s primary liability as an employer
under Article 1903. The plaintiffs were free to choose which course to take, and
they preferred the second remedy. The master is liable for the negligent acts of
his servant where he is the owner or director of a business or enterprise and the
negligent acts are committed while the servant is engaged in his master’s
employment as such owner.
17 REYES
Cangco vs. Manila Railroad
FACTS:
Jose Cangco, an employee of Manila Railroad Co., was taking his daily train ride
to the company’s office in Manila on January 20, 1915. As the train drew near to
his destination, he arose from his seat. When he was about to alight from the
train, he accidentally stepped on a sack of watermelons which he failed to notice
because it was already 7:00pm and it was dim when it happened. His body rolled
from the platform and was drawn under the moving car. His right arm was badly
crushed and lacerated which was eventually amputated.
Cangco then instituted a proceeding against Manila Railroad to recover damages
before the Court of First Instance of Manila, founding his action on the negligence
of its employees in placing and leaving the sacks on the platform. However, the
judge ruled in favor of Manila Railroad and stated that Cangco failed to use due
caution in alighting from the train.
ISSUE:
Whether Manila Railroad can be held liable for damages.
RULING:
Yes. Extra-contractual obligations have their source in those mutual duties which
civilized society imposes upon its members, the breach of which give rise to an
obligation to indemnify the injured party. As such, in cases of culpa aquiliana it is
the wrongful or negligent act or omission that creates the vinculum juris, whereas
in contractual relations the vinculum juris exists independently of the breach. In
culpa aquiliana, where the plaintiff’s cause of action depends on a negligent act or
omission, the burden of proof rests upon the plaintiff to prove negligence. On the
other hand, since an obligation already exists in culpa contractual, mere proof of
the contract and of its nonperformance are sufficient prima facie for a recovery.
In this case, the foundation of defendant’s liability is its contract of carriage
between Manila Railroad and Cangco, which carries by implication the duty to
carry Cangco safely and provide safe means of entering and leaving its trains.
Thus, non-performance of the contract could not be excused by proof that the fault
was imputable to defendant’s employees.
18 SABTALUH
TANADA VS TUVERA
FACTS: Petitioners Lorenzo M. Tanada, et. al. invoked due process in demanding
the disclosure of a number of Presidential Decrees which they claimed had not
been published as required by Law. The government argued that while publication
was necessary as a rule, it was not so when it was otherwise provided, as when
the decrees themselves declared that they were to become effective immediately
upon approval. The petitioners suggest that there should be no distinction
between laws of general applicability and those which are not. The publication
means complete publication, and that publication must be made in the official
gazette.
ISSUES:
(1) Whether or not all laws shall be published in the official gazette.
(2) Whether or not publication in the official gazette must be in full.
RULING:
(1) Yes. all statute including those of local application shall be
published as condition for their effectivity, which shall begin 15
days after publication unless a different effectivity date is fixed by
the legislature.
(2) The publication must be full or no publication at all since its
purpose is to inform the public of the content of the law
19 SALINAS
Elcano v. Hill
Facts: Respondent Reginald Hill killed the son of the plaintiffs named Agapito
Elcano. A criminal complaint was instituted against him but he was acquitted on
the ground that his act was not criminal, because of lack of intent to kill, couple
with mistake. Subsequently, plaintiffs filed a complaint for recovery of damages
against defendant Reginald Hill, a minor, married at the time of the occurrence,
and his father, the defendant Marvin Hill, with who he was living and getting
subsistence, for the same killing. A motion to dismiss was filed by the defendants.
The Court of First Instance of Quezon City denied the motion. Nevertheless, the
civil case was finally dismissed upon motion for reconsideration.
Issue: Whether the present civil action for damages is barred by the acquittal of
Reginald in the criminal case.
Ruling: No, the present civil action for damages is not barred by the acquittal of
Reginald in the criminal case. Firstly, there is a distinction as regards the proof
required in a criminal case and a civil case. To find the accused guilty in a criminal
case, proof of guilt beyond reasonable doubt is required, while in a civil case,
preponderance of evidence is sufficient to make the defendant pay in damages.
Furthermore, a civil case for damages on the basis of quasi-delict does is
independently instituted from a criminal act. As such the acquittal of Reginald Hill
in the criminal case has not extinguished his liability for quasi-delict, hence that
acquittal is not a bar to the instant action against him.
20. SALVADOR
Jardine Davies Inc. v. CA and Far East Mills Supply Corp.
Art 1156
Facts: This case is for specific performance with damages which could have been
resolved through mediation and conciliation. FEMSCO won in the bidding for the
supply and installation of generator for PUREFOODS, however after perfecting
the contract the latter requested to a lower the purchase price of the supply which
the former contended that is against the conditions included in the contract.
Purefoods contend that there is no contract that was perfected between them
since FEMSCO did not send their express conforme to PUREFOODS counter-
offer, hence PUREFOODS decided to cancel its contract with FEMSCO and to
rebid the project. However, before the matter could be resolved PUREFOOD
already awarded the project and entered into a contract with Jardine Nell --which
incidentally was not one of the bidders. Jardine maintains that the appellate court
erred in ordering it to pay moral damages to respondent FEMSCO as it
supossedly induced PUREFOODS to violate the contract with FEMSCO.
Issue: Whether there existed a perfected contract between PUREFOODS and
FEMSCO.
Ruling: Yes. The court ruled that contracts are perfected by mere consent, upon
the acceptance by the offeree of the offer made by the offeror. From that moment,
the parties are bound not only to the fulfillment of what has been expressly
stipulated but also to all the consequences which, according to their nature, may
be in keeping with good faith, usage and law. FEMSCO's submission of the
performance bond and contractor's all risk insurance was an implied
acceptance.The contract at this point has been perfected.
Main Point: While failure to comply with a condition imposed on the perfection of
a contract results in the failure of a contract, failure to comply with a condition
imposed merely on the performance of an obligation only gives the other party
options and/or remedies to protect his interests. (Purchase orders do not make or
break a contract)
21 - Tan
Depairine vs. CA
FACTS: Spouses Carungay entered into a contract with Deiparine for the
construction of a 3-story dormitory in Cebu. Carungay agreed to pay P 970,000
inclusive of contractor’s fee, and Deiparine bound himself to erect the building “n
strict accordance to plans and specifications. Trinidad, a civil engineer, was
designated as Carungays’ representative.
Trinidad reported to Carungay that Deiparine had been deviating from the plans
and specifications, thus impairing the strength and safety of the building.
Carungay ordered Deiparine to first secure approval from him before pouring
cement. This order was not heeded, prompting Carungay to send Deiparine
another memorandum complaining that the construction works are faulty and
done haphazardly mainly due to lax supervision coupled with inexperienced and
unqualified staff. Carungay then filed a complaint for the rescission of the
construction contract for damages.
ISSUE: Whether the rescission of the contract is valid due to breach?
RULING: Yes. Article 1385 states that rescission creates the obligation to return
the things which were the object of the contract, together with the fruits, and the
price with its interest; consequently, it can be carried out only when he who
demands rescission can return whatever he may be obliged to restore. The
construction contract imposes upon Deiparine the obligation to build the structure
and upon the Carungays the obligation to pay for the project upon its completion.
The violation of reciprocity between Deiparine and Carungay spouses, to wit, the
breach caused by Deiparine’s failure to follow the stipulated plans and
specifications, has given the Carungay spouses the right to rescind or cancel the
contract.
22 TORIBIO
Yobido vs CA GR 113003 (1997)
FACTS: On April 26, 1988, spouses Tito and Leny Tumboy and their minor
children named Ardee and Jasmin, bearded at Mangagoy, Surigao del Sur, a
Yobido Liner bus bound for Davao City. Along Picop Road in Km. 17, Sta. Maria,
Agusan del Sur, the left front tire of the bus exploded. The bus fell into a ravine
around three (3) feet from the road and struck a tree. The incident resulted in the
death of 28-year-old Tito Tumboy and physical injuries to other passengers. The
Yobido Liner Bus alleges that the event is a fortuitous event and cannot be
foreseen as it is an accident and must be attributable to the new tires installed.
However, the respondents in this case believes there is a breach of contract as
the required diligence for common carrier was not fulfilled and the occurrence may
be avoided with utmost care and proper handling of the tires in accordance with
the circumstance of the incident.
ISSUE: Whether or not there was as breach of contract that would make Yobido
Liners Bus liable for damages due to negligence?
RULING: Yes. The ruling on the caso foruito is only applicable when things are
unforeseen and avoidable. There is a mandated degree of diligence for a common
carrier from maintenance of the vehicle through its exercise of operations.
Therefore, given that the tire installation and the driving is within the control of
Yobido Liner Bus and that all circumstances are avoidable, the liability on the
breach of contract prospers.
23 VARGAS
SABENA BELGIAN WORLD AIRLINES v. HON. COURT OF APPEALS
FACTS: This is a case about liability for lost luggage. On August 21, 1987, Ma.
Paula San Agustin was on board from Casablanca to Belgium on her way back to
Manila. On September 2, 1987, in Manila she submitted her tag to claim her
luggage with the contents (jewelries, clothes, shoes/bag and accessories for a
total of $4,265.) was missing. She then demanded for the total but the defendant
refused. As the defendant stated that it was due to the negligence of the
passenger since she did not declare the amount of her checked in luggage. The
trial court rendered judgment ordering petitioner Sabena Belgian World Airlines to
pay private respondent Ma. Paula San Agustin. Sabena appealed the decision of
the RTC to the CA, but still affirmed with the decision of the trial court.
ISSUE: Whether the airlines is liable for the lost luggage?
RULING: YES. Fault or negligence consists in the omission of that diligence which
is demanded by the nature of an obligation and corresponds with the
circumstances of the person, of the time, and of the place. When the source of an
obligation is derived from a contract, the mere breach or non-fulfillment of the
prestation gives rise to the presumption of fault on the part of the obligor. In the
case at bar, for cases of common carrier, they are bound to observe diligence of a
good father. Only exceptions for common carriers are in times of loss, destruction
or deterioration of the goods from any of the following:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.
25 Baird
PERLA COMPANIA DE SEGUROS, INC. vs.THE COURT OF APPEALS
FACTS; On December 24, 1981, private respondents spouses Herminio and
Evelyn Lim executed a promissory note in favor Supercars, Inc. in the sum of
P77,940.00, payable in monthly installments according to the schedule of
payment indicated in said note and secured by a chattel mortgage over a brand
new red Ford Laser 1300 5DR Hatchback 1981 model with motor and serial No.
SUPJYK-03780 and insured with the petitioner Perla Compania de Seguros, Inc.
for comprehensive coverage. On November 9, 1982, said vehicle was carnapped
while parked at the back of Broadway Centrum along N. Domingo Street, Quezon
City. Private respondent Evelyn Lim, who was driving said car before it was
carnapped, immediately called up the Anti-Carnapping Unit of the Philippine
Constabulary to report said incident. On November 11, 1982, private respondent
filed a claim for loss with the petitioner Perla but said claim was denied on the
ground that Evelyn Lim, who was using the vehicle before it was carnapped, was
in possession of an expired driver's license at the time of the loss of said vehicle
which is in violation of the authorized driver clause of the insurance policy. On
November 17, 1982, private respondents’ requests from petitioner FCP for a
suspension of payment on the monthly amortization agreed upon due to the loss
of the vehicle and, since the carnapped vehicle insured with petitioner Perla, said
insurance company should be made to pay the remaining balance of the
promissory note and the chattel mortgage contract. Perla, however, denied private
respondents' claim. Consequently, petitioner FCP demanded that private
respondents pay the whole balance of the promissory note or to return the
vehicle but the latter refused.
ISSUE; Whether there was grave abuse of discretion on the appellate court in
holding that private respondents did not violate the insurance contract because
the authorized driver clause is not applicable to the "Theft" clause of said
Contract.
RULING; No, We hold that the Court of Appeals did not err in requiring petitioner
Perla to indemnify private respondents for the loss of their insured vehicle. Where
a car is admittedly, as in this case, unlawfully and wrongfully taken without the
owner's consent or knowledge, such taking constitutes theft, and, therefore, it is
the "THEFT"' clause, and not the "AUTHORIZED DRIVER" clause that should
apply. To rule otherwise would render car insurance practically a sham since an
insurance company can easily escape liability by citing restrictions which are not
applicable or germane to the claim, thereby reducing indemnity to a shadow.
G.R No. L-21881
Pacific Oxygen & Acetylene Company vs. Central Bank
Facts:
This is suit for recovery of a sum of money from the Central Bank. Plaintiff pacific
Oxygen applied with the PH trust company an agent of the Central Bank for
commercial credit in favor of the Independent Engineering Co. a U.S corporation to
cover the shipment of a plant. The application was approved with the PH trust
company establishing an irrevocable letter of credit. The plaintiff applied with pH
trust company for the purchase of forward exchange. Then on, the Central bank in turn
executed a forward exchange contract for the sale of foreign exchange. The central
bank suspended the margin levy. The Independent Engineering Co. the beneficiary
drew 2 drafts against the letter of credit. Ph trust company sent to the plaintiff
statements of accounts on the importation in which were included the 15% margin
fee.
Issue:
W/N the contract of sale includes the 15% margin fee.
Ruling:
Yes the law is clear that a margin fee may be collected from “all sales of foreign
exchange by the Central Bank & its authorized agent banks” the PH trust company
applied for the purchase of forward exchange with the central bank.
27. CHUA
SPS. DUMLAO V. MARLON REALTY CORP.
FACTS: Petitioners and respondent entered into a Contract to Sell involving a 109
square meter lot in Welcome Village, Parañaque City. The terms of payment are:
1. Petitioners shall pay respondent ₱218,000.00 as cost of the lot;
2. The sum of ₱61,000.00 shall be paid upon the signing of the contract; and
3. The balance of ₱157,000.00 shall be paid with interest at 24% per annum
within six (6) months.
Petitioners paid ₱61,000.00 as downpayment upon the signing of the contract. In
the meantime, interest began to accrue on the ₱157,000.00 balance of the
purchase price.
 On November 26, 1992, the parties entered into a Compromise
Agreement whereby petitioners agreed to pay respondent, on or before March 26,
1993, the amount of ₱38,203.33 representing the accrued interest as of that date
on the ₱157,000.00 balance of the purchase price; and that respondent shall
execute a Deed of Sale to facilitate the transfer of title to petitioners. On the same
day, petitioners paid the buyer’s equity of ₱9,000.00.
On December 1, 1992, respondent, pursuant to the Compromise
Agreement, executed a Deed of Sale in favor of petitioners. But petitioner refused
to pay the interest agreed upon despite respondent’s repeated demand.
ISSUE: Whether petitioners are liable to pay interest on the balance of the
purchase price.
RULING: Yes, Pursuant to the above agreement, it is clear that a 24% interest per
annum on the balance of ₱157,000.00 shall be paid to respondent by petitioners.
Having signed the contract, petitioners are bound to comply with its terms and
conditions in good faith. We reiterate that the contract is the law between them.
MAIN POINT: Obligations arising from contracts have the force of law between
the contracting parties and should be complied with in good faith. We must look
into the terms of the contract to determine the respective obligations of the parties
thereto. If the terms of a contract are clear and leave no doubt upon the
contracting parties’ intention, then such terms should be applied in their literal
meaning.
28 CRUZ
Abando v Lozada
G.R. No. L-82564, October 13,1989
Facts: Cuevas and Pucan, Treasurer and President of Prime Exchange Co.,
offered to petitioner spouses Abando to lease their 3 lots in exchange for annual
income, construction of a building, promised a dwelling, administration of the
building and a job for their son. Petitioners agreed to lease their properties to
Prime Exchange. Through deceit and trickery, Cuevas and Pucan were able to
convince the spouses sign the contract of lease when in truth and in fact, the
document was a Joint Venture Agreement and Deed of Assignment.
Subsequently, Prime Exchange mortgaged the 2 lots to herein respondents.
When the petitioners learned that they were defrauded, Pucan had already
mortgaged 2 of the lots to the responded spouses Lozada. The latter failed to pay
the loan and thus, the mortgage was foreclosed and the lots were then awarded to
the respondent spouses Lozada after being the highest bidders. Petitioners, then,
filed a suit seeking to restore the said lands under their name, as well as nullifying
the Transfer Certificate Titles issued to respondents. The CFI ruled in favor of
them to which the CA modified and ruled in favor of the respondent spouses.
Hence,this petition.
Issue: Whether the Joint Venture Agreement and Deed of Assignment is void
Whether the respondent spouses acted in bad faith
Ruling: No. When fraud is employed to obtain the consent of the other party to
enter into a contract, the resulting contract is merely a voidable contract, that is,
valid and subsisting until annulled or set aside by a competent court. Thus,
contrary to the assertion of petitioners that the joint venture agreement and deed
of assignment which they unknowingly signed are not void contracts.
No. The fact that the private respondents did not investigate the title to the
properties offered as collaterals does not constitute convincing evidence to rebut
the presumption that they are, in good faith. Under the rules on evidence, a
presumption exists that private transactions have been fair and regular. More so
when, as in this instant case, investigation of the titles had become moot, when on
the following day, titles to the mortgage lots were issued in the name of the
mortgagor Pucan. Private respondent had no prior knowledge petitioners were in
actual possession of the property. Thus, they had no duty to inspect the property
before granting the loan. They did not have to inquire beyond the titles of the
property. And no doubt in this case the clean transfer certificates of titles were
issued in the name of the mortgagors.
29 DARLUCIO
THE BOARD OF LIQUIDATORS v. HEIRS OF MAXIMO M. KALAW, G.R.L-
18805
FACTS:
The National Coconut Corporation (NACOCO) was chartered as a non-profit
governmental organization on avowedly for the protection, preservation and
development of the coconut industry in the Philippines. On August 1, 1946,
NACOCO's charter was amended (Republic Act 5) to grant that corporation the
express power to buy and sell copra. The charter amendment was enacted to
stabilize copra prices, to serve coconut producers by securing advantageous
prices for them, to cut down to a minimum, if not altogether eliminate, the margin
of middlemen, mostly aliens. General manager and board chairman was Maximo
M. Kalaw; defendants Juan Bocar and Casimiro Garcia were members of the
Board; defendant Leonor Moll became director only on December 22, 1947.
NACOCO, after the passage of Republic Act 5, embarked on copra trading
activities.
An unhappy chain of events conspired to deter NACOCO from fulfilling the
contracts it entered into. Nature supervened. Four devastating typhoons visited
the Philippines in 1947. When it became clear that the contracts would be
unprofitable, Kalaw submitted them to the board for approval. It was not until
December 22, 1947 when the membership was completed. Defendant Moll took
her oath on that date. A meeting was then held. Kalaw made a full disclosure of
the situation, apprised the board of the impending heavy losses. No action was
first taken on the contracts but not long thereafter, that is, on January 30, 1948,
the board met again with Kalaw, Bocar, Garcia and Moll in attendance. NACOCO
partially performed the contracts. The buyers threatened damage suits, some of
which were settled. But one buyer, Louis Dreyfus & Go. (Overseas) Ltd., did in
fact sue before the Court of First Instance of Manila. The cases culminated in an
out-of- court amicable settlement when the Kalaw management was already out.
ISSUE: Whether damages should be awarded
RULING: No. Damages should not be awarded. There cannot be an actionable
wrong if either one or the other is wanting. Kalaw could not be expected to predict
the coming of unpredictable typhoons. And even as typhoons supervened Kalaw
was not remissed in his duty. He exerted efforts to stave off losses. That Kalaw
cannot be tagged with crassa negligentia or as much as simple negligence, would
seem to be supported by the fact that even as the contracts were being
questioned in Congress and in the NACOCO board itself,President Roxas
defended the actuations of Kalaw. It is a well known rule of law that questions of
policy of management are left solely to the honest decision of officers and
directors of a corporation, and the court is without authority to substitute its
judgment for the judgment of the board of directors; the board is the business
manager of the corporation, and so long as it acts in good faith its orders are not
reviewable by the courts.
30 FLORES
RAMOS v CENTRAL BANK OF THE PHILIPPINES
FACTS
The petitioners including Emerito Ramos, Sr., Chairman of OBM was a
commercial banking corporation that was duly organized and bound by the law.
The OBM was comprised of a capital of P30 million, P10 million subscribed, and
P8 million paid for but was suspended for violations of banking laws and
implementing regulations. The suspension had subject the petitioner to
deficiencies of 12% interest on over drawings and 36% per annum on reserve
deficiencies that later amounted to millions. The petitioners had filed a petition for
certiorari, prohibition and mandamus with prayer for the issuance of a writ of
preliminary injunction to stop the respondent Central Bank of the Philippines from
enforcing the Monetary Board Resolution No. 1263 which excludes the Overseas
Bank of Manila (OBM) from being in the clear with the Central Bank.
The grounds of the petition were that the resolutions made by the
respondent was in the excess of jurisdiction with grave abuse of discretion; the
resolution were prejudicial as to national interest and against public policy
because such act would destroy the confidence of the banking system and would
therefore go against the spirit and purpose of the respondent; the resolution were
made without due process of the law; and the absence of appeal.
ISSUE: Whether or not the respondent Central Bank had breached its contract
with the petitioner OBM.
RULING: Affirmative, the court ruled that the respondent Central Bank had
breached its contract with the petitioner OBM. The court cited that the respondent
was in violation of Article 1159 and Article 1315 of the Civil Code of the
Philippines. Article 1159 states, obligations arising from contracts have the force
of law between the contracting parties and should be complied with in good faith.
While Article 1315 mentioned, contracts are perfected by mere consent, and from
that moment the parties are bound not only to the fulfillment of what has been
expressly stipulated but also to all the consequences which, according to their
nature, may be in keeping with good faith, usage and law. CB had attacked in bad
faith with its contract by the failure to maintain the banking system and the
preservation of public confidence which was stated in the contract with the
petitioner in the Voting Trust Agreement.
31 GENON
Catindig vs. Roque
FACTS: Petitiner Catindig seeks the review of the decision of the CA dated which
affirmed the judgment of the CFI of Bulacan declaring void certain documents of
sale regarding portions of the fishpond in litigation.
The co-owners of the fishpond leased it to Mrs. Catindig for a term of ten years
counted After the termination of the lease Mrs. Catindig remained in possession of
the fishpond because she was negotiating with the co-owners for the purchase
thereof. She wanted to buy it for P52,000. German Ramirez, one of the co-
owners, executed a deed wherein he sold his 2/16 share to Mrs. Catindig for
P6,500. The sale was annotated on the title. Two weeks later, Pedro Villanueva,
one of the co-owners, learned of the sale executed by German Ramirez. The
respondents filed this action against Mrs. Catindig to compel her to allow them to
redeem the portion sold by German Ramirez. The respondents amended their
complaint by including, inter alia, a prayer for the recovery of the possession of
the fishpond contending that the because Mrs. Catindig did not pay the price of
P52,000, the projected sale was void ab initio.
ISSUE: Whether or not the contract of sale is void.
RULING:
Yes. Tthe price was not paid or that the statement in the supposed contracts of
sale as to the payment of the price was simulated fortifies the view that the
alleged sales were void. “If the price is simulated, the sale is void x x x” (Art. 1471,
Civil Code). A contract of sale is void and produces no effect whatsoever where
the price, which appears thereon as paid, has in fact never been paid by the
purchaser to the vendor. Such a sale is nonexistent or cannot be considered
consummated.
The foregoing discussion disposes of whatever legal issues were raised by
appellant Catindig which are interwoven with her factual contentions, including the
issue as to whether she is entitled to demand the execution of a notarized deed of
sale for the 14/16 pro indiviso portion of the fishpond. She is not entitled because,
as already held, the alleged sales in her favor are void.
32. HALID
CRUZ vs J.M. TUASON & CO.
FACTS:
As requested by the Deudors, who laid claim in question on the strength of an
informacion posesoria, Cruz made permanent improvements on the said land.
Tuason & Co. availed of Cruz’ services as an intermediary with the Deudors, to
work for the amicable settlement in a civil case.
A compromise agreement between the Deudors and Tuason & Co. was and
approved by court. Cruz alleged that Tuason & Co. promised to convey a land
occupied by him which was part of the 20 quiones of land within 10 years from the
date of signing of the compromise agreement as consideration of his services.
The said land was not conveyed to him by Tuason & Co.Cruz further alleged that
Tuason & Co. was unjustly enriched at his expense since they enjoyed the
benefits of the improvements he made on the land acquired by the latter.
The trial court dismissed the case on the ground that there was no cause of
action. Hence, this appeal.
ISSUE:
Whether or not a presumed quasi-contract be emerged as against one part when
the subject matter thereof is already covered by a contract with another party.
RULING:
NO, it is obvious that a presumed qauasi-contract cannot emerge as against one
party when the subject matter thereof is already covered by an existing contract
with another party. Predicated on the principle that no one should be allowed to
unjustly enrich himself at the expense of another, Article 2124 creates the legal
fiction of a quasi-contract precisely because of the absence of any actual
agreement between the parties concerned.
Since appellant has a clearer and more direct recourse against the Deudors with
whom he had entered into an agreement regarding the improvements and
expenditures made by him on the land of appellees. It cannot be said, in the
sense contemplated in Article 2142, that appellees have been enriched at the
expense of appellant.
33-Hammisani
Perez VS Pomar
FACTS: Perez filed in the Court of First Instance of Laguna a complaint asking
the Court to determine the amount due him for services rendered as an interpreter
for Pomar and for judgement to be rendered in his favor.
Pomar, on his part, denied having sought the services of Perez, contending that,
Perez being his friend, he only accepted the services for they were rendered in a
spontaneous, voluntary and officious manner.
ISSUE: Whether or not consent has been given by the other party
RULING: Yes. It does not appear that any written contract was entered into
between the parties for the employment of the plaintiff as interpreter, or that any
other innominate contract was entered into, but whether the plaintiff’s services
were solicited or whether they were offered to the defendant for his assistance,
inasmuch as these services were accepted and made use of by the latter, there
was a tacit and mutual consent as to the rendition of services. This gives rise to
the delegation upon the person benefited by the services to make compensation
thereof, since the bilateral obligation to render services as interpreter, on the one
hand, and on the other to pay for the services rendered is thereby incurred.
As was held in the Supreme Court of Spain in its decision of February 12, 1889, it
stated that “not only is there an express and tacit consent which produces real
contract but there is also a presumptive consent which is the basis of quasi-
contracts this giving rise to the multiple judicial relations which result in obligations
for the delivery of a thing or the rendition of a service.
Philippine National Bank vs. Court of Appeals and B.P. Mata and Co., Inc
Facts: B.P. Mata & Co is a private corporation engaged in providing goods and
services to shipping companies. It has acted as manning or crewing agent for
several firms, one of which is Star Kist Foods Inc. As part of their agreement,
Mata makes advances for the crew’s several expenses.
Security Pacific National Bank transmitted a cable message to PNB to pay the
amount of US$14,000 to Mata by crediting PNB’s account with the Insular Bank of
Asia and America, as per order of Star Kist. However, the former bank promptly
sent another message to PNB with the instructions that only the amount of
US$1,400 should be given to Mata. With it, Star Kist sent a check to Mata for the
amount of US$1,400 through the Insular Bank of Asia and America.
However, 14 days afer, PNB effected another payment in the amount of
US$14,000, purporting to be another transmittal of reimbursement from Star Kist.
More than six years later, PNB requested Mata for refund of US$14,000 after it
discovered its error.
PNB filed a case for collection and refund of $14,000 against Mata, arguing that
based on a constructive trust under Article 1456 of Civil Code, it has a right to
recover the said amount it erroneously credited to Mata.
RTC dismissed the complaint, ruling that the case falls squarely under Article
2154 on solutio indebiti and not under Article 1456 on constructive trust.
Appellate court affirmed such decision, adding that while Mata is duty bound to
return the amount paid by mistake, PNB’s demand for the return of US$14,000
cannot prosper because of prescription under Article 1145, stating that actions
upon a quasi-contract must be commenced within 6 years.
Issue: Whether or not PNB was correct in arguing that based on constructive
trust, it can still collect the amount from Mata even after more than 6 years have
already lapsed.
Ruling: PNB was correct in stating that based on constructive trust, he may claim
the $14,000 it erroneously sent to Mata. In fact, he can opt to invoke solution
indebiti or constructive trust to claim it. However, the action to enforce an implied
trust is already barred by laches.
Article 1456 of the Civil Code provides: If property is acquired through mistake or
fraud, the person obtaining it is, by force of law, considered a trustee of an implied
trust for the benefit of the person from whom the property comes.
On the other hand, Article 2154 states: If something is received when there is no
right to demand it, and it was unduly delivered through mistake, the obligation to
return it arises.
If it is to be construed as a case of payment by mistake or solutio indebiti, then the
prescriptive period for quasi-contracts of six years applies, as provided by Article
1145. As pointed out by the appellate court, petitioner’s cause of action
thereunder shall have prescribed, having been brought almost seven years after
the cause of action accrued. However, even assuming that the instant case
constitutes a constructive trust and prescription has not set in, the present action
has already been barred by laches.
ANDRES VS MANTRUST G.R. NO. 82670 SEPTEMBER 15, 1989
FACTS: Andres, using the business name “Irene’s Wearing Apparel” was
engaged in the manufacture of ladies garments, children’s wear, men’s apparel
and linens for local and foreign buyers. Among its foreign buyers was Facts of the
United States.
Sometime in August 1980, Facts instructed the First National State Bank (FNSB)
of New Jersey to transfer $10,000 to Irene’s Wearing Apparel via Philippine
National Bank (PNB) Sta. Cruz, Manila branch. FNSB instructed Manufacturers
Hanover and Trust Corporation (Mantrust) to effect the transfer by charging the
amount to the account of FNSB with private respondent.
After Mantrust effected the transfer, the payment was not effected immediately
because the payee designated in the telex was only “Wearing Apparel.” Private
respondent sent PNB another telex stating that the payment was to be made to
“Irene’s Wearing Apparel.” On August 28, 1980, petitioner received the remittance
of $10,000.
After learning about the delay, Facets informed FNSB about the situation. Facts,
unaware that petitioner had already received the remittance, informed private
respondent and amended its instruction y asking it to effect the payment to
Philippine Commercial and Industrial Bank (PCIB) instead of PNB.
Private respondent, also unaware that petitioner had already received the
remittance, instructed PCIB to pay $10,000 to petitioner. Hence, petitioner
received another $10,000 which was charged again to the account of Facets with
FNSB.
FNSB discovered that private respondent had made a duplication of remittance.
Private respondent asked petitioner to return the second remittance of $10,000
but the latter refused to do so contending that the doctrine of solution indebiti does
not apply because there was negligence on the part of the respondents and that
they were not unjustly enriched since Facets still has a balance of $49,324.
ISSUE: Whether or not the private respondent has the right to recover the second
$10,000 remittance it had delivered to petitioner
HELD: Yes. Petitioner has an obligation to return the remittance mistakenly
delivered by the private respondent and also Art 2154 of the New Civil Code is
applicable. For this article to apply, the following requisites must concur: 1) that he
who paid was not under obligation to do so; and 2) that payment was made by
reason of an essential mistake of fact. Article 1895 [now Article 2154] of the Civil
Code abovequoted, is therefore applicable. This legal provision, which
determines the quasi-contract of solutio indebiti, is one of the concrete
manifestations of the ancient principle that no one shall enrich himself unjustly at
the expense of another.
There was a mistake, not negligence, in the second remittance. It was evident by
the fact that both remittances have the same reference invoice number.
36. LIM
CIR vs. ESSO Standard Eastern Inc.
FACTS: Respondent overpaid its 1959 income tax by P221,033.00. It was
granted a tax credit by the Commissioner accordingly on 1964. However, ESSOs
payment of its income tax for 1960 was found to be short by P367,994.00. The
Commissioner (of Internal Revenue) wrote to ESSO demanding payment of the
deficiency tax, together with interest thereon for the period from 1961 to 1964.
ESSO paid under protest the amount alleged to be due, including the interest as
reckoned by the Commissioner. It protested the computation of interest,
contending it was more than that properly due. It claimed that it should not have
been required to pay interest on the total amount of the deficiency tax,
P367,994.00, but only on the amount of P146,961.00—representing the difference
between said deficiency, P367,994.00, and ESSOs earlier overpayment of
P221,033.00 (for which it had been granted a tax credit). ESSO thus asked for a
refund. The Internal Revenue Commissioner denied the claim for refund. ESSO
appealed to the Court of Tax Appeals which ordered payment to ESSO of its
refund-claim representing overpaid interest.
The Commissioner argued the tax credit of P221,033.00 was approved only on
year 1964, it could not be availed of in reduction of ESSOs earlier tax deficiency
for the year 1960; as of that year, 1960, there was as yet no tax credit to speak of,
which would reduce the deficiency tax liability for 1960. In support of his position,
the Commissioner invokes the provisions of Section 51 of the Tax Code.
ISSUE: Whether the interest on delinquency should be applied on the full tax
deficiency of P367,994.00 despite the existence of overpayment in the amount of
P221,033.00.
RULING: NO. Petition was denied. Decision of CTA was affirmed. The fact is that,
as respondent Court of Tax Appeals has stressed, as early as 1960, the
Government already had in its hands the sum of P221,033.00 representing
excess payment. Having been paid and received by mistake, as petitioner
Commissioner subsequently acknowledged, that sum unquestionably belonged to
ESSO, and the Government had the obligation to return it to ESSO That
acknowledgment of the erroneous payment came some four (4) years afterwards
in nowise negates or detracts from its actuality. The obligation to return money
mistakenly paid arises from the moment that payment is made, and not from the
time that the payee admits the obligation to reimburse. The obligation to return
money mistakenly paid arises from the moment that payment is made, and not
from the time that the payee admits the obligation to reimburse. The obligation of
the payee to reimburse an amount paid to him results from the mistake, not from
the payee’s confession of the mistake or recognition of the obligation to
reimburse.
37. MACAPUGAY
Benedicto v. Board of Adm. of RPN, BBC, and IBC
FACTS: The case at bar and the case of Guingona v PCGG were consolidated as
they covered the sequestered television and broadcast station of the petitioner
Roberto Benedicto, who was renowned friend and classmate of the then President
Ferdinand Marcos. Benedicto filed a petition for prohibition and mandamus with a
prayer for preliminary injuction and restraining order against the Board of
Administrators, prohibiting them from exercising management, operation and
control over RPN, BBC, and IBC, otherwise known as the “Broadcast City” and to
urge the respondent Board of Administrators to turn them over to their Board of
Directors, as stipulated in the agreement between him and PCGG. In response,
the latter executed a compromise agreement with Benedicto to relinquish a
substantial part of ill-gotten wealth and to bestow him immunity from prosecution.
Therein, a petition for certiorari and prayer for preliminary injunction and
restraining order against the said agreement was filed by then Senator Teofisto
Guingona, Jr. The court issued TRO and obliged PCGG to comment on the
foregoing wherein it asserted that such agreement shows the Government’s
desire to immediately accomplish its recovery mission and the petitioner’s desire
to lead a peaceful normal life. The PCGG’s motion to suspend consideration by
the Sandiganbayan of the “Joint Motion to Approve Compromise Agreement" was
thereby granted in 1991. .
ISSUE: Whether the Compromise of Agreement contracted by the Benedicto and
PCGG is lawful and constitutes a grave abuse of discretion.
RULING: The Supreme Court ruled that the Government's claim against
Benedicto is not yet settled, and the ownership of the alleged ill-gotten assets is
still being litigated in the Sandiganbayan, hence, the PCGG's Compromise
Agreement with Benedicto need not be submitted to the Congress for approval.
Settled is the rule that the writ of the prohibition will issue only when it is shown
that a tribunal, corporation, board or person whether exercising functions judicial
or ministerial, has acted without or in excess of its or his jurisdiction, or with grave
abuse of discretion, and there is no appeal nor other plain, speedy, and adequate
remedy in the ordinary course of the law (Sec. 2, Rule 65 of the Rule of Court).
Since the PCGG's compromise agreement with Benedicto has been submitted to
the Sandiganbayan for approval and is still pending determination therein, this
petition to prohibit its implementation and enforcement is premature.
38 MUSA
Bishop of Legaspi v. Calleja
FACTS:
Rev. Father Martin Alcazar, deceased, left several parcels of land. Petitioner, filed
with the Register of Deeds of Sorsogon, a deed of sale executed by Father
Alcazar in favor of Msgr. Pedro P. Santos, as Bishop of Nueva Caceres, as well
as a deed of cession executed by the latter, in favor of petitioner herein.
Subsequently, Concepcion H. Luna and her husband, Ignacio A. Luna, together
with seventeen (17) other persons, instituted Special Civil Action against Msgr.
Pedro P. Santos and petitioner herein. They alleged that they were heirs of the
deceased Father Alcazar; that such properties in Sorsogon were in the
possession and under the administration of said Ignacio A. Luna, the administrator
appointed by Father Alcazar and said titles of the properties were transferred to
him in 1951 before the petitioners registered it under their name in 1953, hence,
such transfer was null and void.
Petitioner herein, the Bishop of Legaspi, seeks a writ of mandamus to enjoin
respondent, Hon. Manuel Calleja, as Judge of First Instance of Sorsogon, to issue
a writ of possession in favor of said petitioner and against the other respondents,
Concepcion H. Luna and Ignacio A. Luna.
ISSUE:
Whether or not the sale between Father Alcazar and Msgr. Santos is valid and
that the private respondents have the obligation to deliver the said properties.
RULING:
No. Inasmuch as Mr. Luna held the properties in question as agent of Father
Alcazar, and, upon the latter's death, either as extra-legal administrator of his
estate—something like a case of negotiorum gestio—or in trust and for the benefit
of the nieces and nephews of the deceased, as his alleged heirs, it is apparent
that the present possession of Mr. Luna is, in effect, an extension of that of Father
Alcazar. It would then be apparent that Msgr. Santos could not avail of a writ of
possession in order to take hold of the property. He would have to, either sue for
specific performance, or bring an action for ejectment.
39 OCENA
Rotea v. Delupio (GR No. L-45310, April 14, 1939)
FACTS: Simplicio Birondo, father of Josefina and Sofia Birondo, entrusted to Atty.
Rotea the matter obtaining the annulment of sale made by the mother-in-law of
Simplicio named Francisca Delupio and the issuance of a Torrens Certificate of
Title of a piece of land, the right to buy the same in which it inherited by said
minors from their deceased mother Beatriz Bartolome and its ownership later
acquired by them from the government by purchase. As payment of the services
rendered by Atty. Rotea, Simplicio bound himself to convey 1/3 of said land. Atty.
Rotea took the necessary steps to disprove or annul the sale made by Francisca
Delupio in favour of Fabian Franco in which he was successful. The CFI acceded
for the notation of Atty. Rotea’s right of retention over 1/3 of the said lot and
ordered the Register of Deeds of Rizal to note said right. Delupio, as guardian of
the minors, filed a MR of the order directing the notation of the right of Atty. Rotea
on the ground that Simplicio was not authorize to enter into agreement with said
Atty. Rotea regarding the properties of the minors. After hearing, the CFI of Rizal
granted first by order and set aside order for notation. CFI of Rizal issued another
order directing the notation of the right of retention of Atty. Rotea but without
specifying its value. Delupio accepted to this order and interposed this appeal.
ISSUE: Whether Atty. Rotea is entitled to the compensation for the services he
rendered by virtue of a contract entered into between him and the father of the
minors.
RULING: Yes. The Court held that Atty. Rotea is considered a negotiorum gestor
who is entitled to be indemnified for necessary and useful expenses incurred by
him and the damages suffered in the discharge of his duties to have his right of
retention noted, it being immaterial that said minors or their guardian did not ratify
his undertaking, in accordance with the provisions of article 1893 of the Civil Code
and to have his lien as attorney noted.
40 REYES
Ramie Textiles Inc. vs. Mathay, Sr.
FACTS:
Ramie Textiles, Inc. has been voluntarily paying real estate taxes on its plant
machinery and equipment used in Bagbaguin, Valenzuela, Bulacan, and since its
existence in 1959, it reached the amount of P78,041.17. On 19 May 1967, the
petitioner said that under the Assessment Law, said machineries are exempt from
realty tax so they claim for refund through the Provincial Assessor of Bulacan the
amount of P78,041.17. The Provincial Treasurer denied the claim on the ground
that under Section 359 of the Revised Manual of Instructions to treasurers, “a
claim for refund of taxes erroneously paid or illegally collected or assessed should
be presented within two (2) years from date of payment.”
ISSUE:
Whether Ramie Textiles can recover the said amount paid through error or
mistake.
RULING:
Yes. The fact that petitioner paid through error or mistake and the government
accepted such payment gave rise to a quasi-contract of solution indebiti. This
arises whenever a person unduly delivers a thing through mistake to another who
has no right to demand it. Once delivery has been made, the person to whom the
deliver is unduly made shall have the obligation to return the property delivered or
the money paid.
In this case, petitioner had no knowledge of the fact that it was exempted from
payment of the realty tax under Commonwealth Act No. 470. Payment was made
through error or mistake, in the honest belief that petitioner was liable, and
therefore could not have been made under protest, but with complete
voluntariness. In any case, a taxpayer should not be held to suffer loss by his
good intention to comply with what he believes is his legal obligation, where such
obligation does not really exist. The quasi-contract of solutio indebiti, is one of the
concrete manifestations of the ancient principle that no one shall enrich himself
unjustly at the expense of another. Hence, it would seem unedifying for the
government, that knowing it has no right at all to collect or to receive money for
alleged taxes paid by mistake, it would be reluctant to return the same.
41 SABTALUH
VELEZ vs. BALZARSA
FACTS: The case involved the return of certain parcels of land which had been
sold by the defendants to plaintiff's deceased husband, plaintiff alleged that
defendants had remained in possession of said land under a contract of lease, but
that for over two years’ defendants had not paid the agreed rentals. defendants
alleged that the real agreement was loan secured by a mortgage of those lands;
and that whereas the amount borrowed was only P2,400, defendants had
however already paid P4,420.88. Defendants therefore prayed for the return of the
excess, or P2,029.88.
ISSUE: Whether the payments are considered as either rents or interest.
RULING: No, in none of the contracts offered in evidence is there any promise
made by defendants to pay rents. It would have been strange for such a clause to
appear in Exhibits A and D wherein it was stipulated that the creditor took
possession of the lands and would reap the fruits of the same. It is true that in the
receipts signed by Neri and by plaintiff these payments are called rents. But these
receipts have been prepared by Neri and by plaintiff, and defendants in their
ignorance did not look into the wording, being merely satisfied that they were
proofs of payment. If these payments were not rents they are also not interest
because no interest is due unless it is expressly stipulated.
42 SALINAS
FF. MAÑACOP CONSTRUCTION CO., INC. VS. CA
Facts: FF Mañacop Construction Company Inc, was contracted by MIAA to
construct a perimeter fence from Asia Overseas Inc to Airscope Development
Corp. for and in consideration of the quoted price of 307,440.00 Due to the
urgency of the need, FFMCC proceeded with the fence construction even if the
Notice to Proceed has not yet been signed by the General Manager.
After the Feb 1986 Revolution, the new general manager of MIAA stopped the
construction of said fence, by the time of the halt in construction it is already 95%
finished which was worth 282,068.00.
After making repeated demands to make MIAA pay for the constructed fence,
FMCC filed a case against MIAA. During trial it has been found that MIAA is liable
to pay 238,501.48 based upon quantum meruit since there is an absence of a
written contract between parties. On appeal the Court agreed with MIAA with
regard to the error of the trial court in the valuation of the obligation. According to
the decision of the Appellate Court, the computation for the obligation owed by
MIAA should be referred to the Commission on Audit, as was shown in the case of
Eslao v. Commission on Audit.
Issue: Whether the RTC is correct in ordering MIAA to pay FMCC on the basis of
Quantum Meruit.
Ruling: Yes. The S.C. basing its decision on the Eslao case, it was shown the
contract was not fraudulent or mala in se, also it has been shown that the project
was already covered by a specific appropriation. Property or benefit is not ultra
vires (they can be a subject of an express contract and are within the contractual
powers of the public body). It is shown as well that MIAA was reaping the benefits
from the scallop fence and wire placed by the petitioner. It is also shown that the
payment is limited to the actual cost of chargeable against funds authorized and
certified for such purpose. Unliquidated claims present a justiciable question ripe
for judicial determination which is beyond the powers of COA to adjudicate.
43. SALVADOR
Occena v. Icamina
Art 1156
Facts: Occena instituted a criminal complaint for Grave oral defamation against
Icamina for allegedly openly, publicly and maliciously uttered insulting words
which caused great and irreparable damage and injury to his person and honor.
Issue: Whether Occena is entitled to an award of damages arising from the
defamatory remarks of Icamina.
Ruling: Yes. The court ruled that civil obligations arising from criminal offenses
are governed by Article 100 of the RPC in relation to Article 2177 of the Civil Code
on quasi-delict. In the case at bar, the offense of which Icamina is found guilty is
not one of those felonies where no civil liabilities results because either there is no
offended party or no damage was caused to a private person.
Main Point: A person who is criminally liable is also civilly liable (dual character of
a crime); what gives rise to the civil liability is really the obligation of everyone to
repair or to make whole the damage caused to another by reason of his act or
omission, whether done intentionally or negligently and whether or not punishable
by law.
44 - Tan
Banal vs. Tadeo
FACTS: RTC judge Tomas Tadeo of Quezon City rejected the appearance of Atty.
Nicolas Bustos as private prosecutor in the case against Rosario Claudio. The
criminal case was in violation of BP 22 or the Bouncing Checks Law. The judge
argued that crime does not provide for any civil liability or indemnity and hence, it
is not a crime against property but public order. However, petitioner argues that
they can claim indemnification due article 100 of the RPC.
ISSUE: Whether the judge erred in rejecting the appearance of the private
prosecutor?
RULING: Yes. criminal liability will give rise to civil liability only if the same
felonious act or omission results in damage or injury to another and is the direct
and proximate cause thereof. Also, Article 20 of the NCC provides: “every person
who, contrary to law, willfully or negligently causes damage to another, shall
indemnify the latter for the same." Regardless, of whether a special law so
provides, indemnification of the offended party may be had on account of the
damage, loss or injury directly suffered because of the wrongful act of another.
Therefore, in every criminal case, the defendant if found to be criminally liable is
obligated to pay damages to the offended party.
45 TORIBIO
Virata vs Ochoa GR No. L-46179 (1978)
FACTS: On September 24, 1975 one Arsenio Virata died as a result of having
been bumped while walking along Taft Avenue, Pasay City by a passenger
jeepney driven by Maximo Borilla An action for homicide through reckless
imprudence was instituted on September 25, 1975 against Maximo Borilla in the
Court of First Instance of Rizal at Pasay City. Atty. Julio Francisco, the private
prosecutor, made a reservation to file a separate civil action for damages against
the driver on his criminal liability. On February 19, 1976 Atty. Julio Francisco filed
a motion in said case to withdraw such reservation and on June 29, 1976
subsequently instituted by the heirs of Virata based on quasi delicts. Petitioners
alleges that there is no double recovery despite two cases arising from the same
negligent act.
ISSUE: Whether or not the action to file civil action separate from criminal case
from a single negligent act ground for double recovery as prohibited by Art 2177 of
Civil Code?
RULING: No. Rule 111 of the Rules of Court recognizes no necessity to reserve
separate action from a negligent act arising from Art 365 of the Revised Penal
Code that involves negligence. Moreover, this is also not a violation of Art 2177 of
the Civil Code as these come from 2 distinct sources of obligation and thus the
quantum of evidence may vary on separate cases as civil case may prosper
based on preponderance of evidence alone. The highest award will be the
controlling award to be recognized as the ceiling for collection of damages therein.
46 VARGAS
Tan v. Nitafan
FACTS: On August 25, 1973, Florentino Lim, from the wealthy clan of Limketkai
family of CDO, was shot dead. On April 17, 1975, the brothers, Luis, William,
Joaquin, Vicente, Alfonso and Eusebio, all surnamed Tan, and Go E Kuan,
together with eight (8) others, were charged with murder, and unlawful
possession, control and custody of a pistol before Military Commission No. 1. But
Alfonso, Eusebio and Go E Kuan died even before the instant petition could be
filed then William also died. On 11 June 1976, after trial, Military Commission No.
1 convicted Luis and Five (5) of his co-accused for murder, while the gunman was
also found guilty of illegal possession of firearm. The other brothers of Luis were
simply declared "not guilty" in both cases. On 11 February 1983, private
respondent Rosita B. Lim, commenced in the Regional Trial Court of Manila a civil
action for damages against all those charged with the slaying of Florentino Lim.
The case was raffled to the sala of respondent Judge David G. Nitafan. Tan
brothers filed a motion to dismiss stating that the venue was improper and the
cause of action by Rosita was barred since the acquittal. But Judge Nitafa
disagreed and denied the petition and brought the case to Intermediate Appellant
Court (now Court of Appeals) by way of certiorari.
ISSUE: Whether the civil action under Art 33 has already prescribed
RULING: NO. The prescriptive period cannot be ten-years. To justify a ten-year
prescriptive period, one has to show that the obligation falls within the purview of
Article 1144, the only provision in the entire Civil Code which specifies a ten-year
prescriptive period. In the case at bar, the crime of murder has a prescribed period
of twenty (20) years.
48 BAIRD
PEOPLE OF THE PHILIPPINES vs.HEINRICH S. RITTER
FACTS; Heinrich Stefan Ritter, an australian national, brought a boy and girl
namely: Jessie Ramirez and Rosario Baluyot inside his hotel room at MGM Hotel
along Magsaysay Drive, Olongapo City. Ramirez was already sleepy, but Rosario
touched him to call his attention. He looked, and he saw accused placing his penis
against the vagina of Rosario and that he was trying to penetrate the vagina but it
would not fit. After what he saw, Ramirez did not anymore bother to look because
he was sleepy and fell asleep. The following morning, the accused, whom the
juveniles described as an "American, paid Ramirez alias "Egan" P200.00 and
Rosario P300.00. After the American left, they went downstairs, and Rosario told
Egan that the American inserted something in her vagina. On May 14, 1987,
Gaspar Alcantara, a defense witness, while garbage scavenging, saw Rosario's
skirt was bloodied and she was unconscious and foul smelling. He brought her to
the Olongapo City General Hospital in an unconscious condition, via jeepney.
After she was examined by the physicians, it was found out that there was a
foreign object lodged in her vaginal canal. One of the doctors who attended to her
was Dr. Barcinal who tried to extract the foreign object by means of a forceps, but
several attempts proved futile because said object was deeply embedded in the
vaginal canal and was covered by tissues. Her abdomen was enlarged, tender
and distended symptoms of peritonitis. The following day, Rosario got serious and
it was Dr. Leo Cruz who pronounced her death in the afternoon of May 20, 1987.
Appellant HEINRICH STEFAN RITTER was acquitted on grounds of reasonable
doubt since the proof of Rosario's being under 12 years of age is not satisfactory;
the prosecution has to prove force, intimidation, or deprivation of reason in order
to convict for rape. There is no such proof. In fact, the evidence shows a
willingness to submit to the sexual act for monetary considerations. The only
witness to the fact of Ritter's placing a vibrator inside the vagina of Rosario was
Jessie Ramirez. This witness did not see Ritter insert the vibrator.
ISSUE ; Whether the acquittal of the accused exonerated his civil liability as well
RULING; No, while the guilt of the accused in a criminal prosecution must be
established beyond reasonable doubt, only a preponderance of evidence is
required in a civil action for damages. (Article 29, Civil Code). Rosario Baluyot is a
street child who ran away from her grandmother's house. Circumstances forced
her to succumb and enter this unfortunate profession. Nonetheless, she has left
behind heirs who have certainly suffered mental anguish, anxiety and moral shock
by her sudden and incredulous death as reflected in the records of the case.
Though we are acquitting the appellant for the crime of rape with homicide, we
emphasize that we are not ruling that he is innocent or blameless. True, we
cannot convict on probabilities or possibilities but civil liability does not require
proof beyond reasonable doubt. The Court can order the payment of indemnity on
the facts found in the records of this case. The appellant certainly committed acts
contrary to morals, good customs, public order or public policy (Article 21 Civil
Code). As earlier mentioned, the appellant has abused Filipino children, enticing
them with money. We cannot overstress the responsibility for proper behavior of
all adults in the Philippines, including the appellant towards young children. The
sexual exploitation committed by the appellant should not and cannot be
condoned. Thus, considering the circumstances of the case, we are awarding
damages to the heirs of Rosario Baluyot in the amount of P30,000.00.
G.R. No. 72964
Urbano v. IAC
Facts:
Marcelo Javier opened the irrigation of a canal by means of cutting grass which
caused the flooding of the storage area of the petitioner. Petitioner got angry and
demanded Javier to pay for the soaked palay. Javier refused and a quarrel
between them ensued. Urbano unsheathed his bolo and hacked Javier hitting him
on the right hand and left leg. Javier went to the hospital for the treatment of the
wounds. Two weeks after, Javier returned to his farm and tended to his tobacco
plants.Then, on a fateful day of November 14, Javier was rushed to the hospital.
Doctors findings showed that he was suffering from tetanus infection. The next
day Javier died.
Trial court and Court of appeals found the petitioner guilty beyond reasonable
doubt of homicide. Petitioner raised the case to the SC arguing that the cause of
the death of Javier was due to his own negligence.
Issue:
W/N Urbano’s action was the proximate cause of the death of Javier.
Ruling:
No. Pursuant to this provision “an accused is criminally responsible for acts
committed by him in violation of law and for all the natural and logical
consequences resulting therefrom. The rule is that the death of the victim must be
the direct, natural, and logical consequence of the wounds inflicted upon him by
the accused
At the time Javier's wound was inflicted by the appellant, the severe form of
tetanus that killed him was not yet present. Consequently, Javier's wound could
have been infected with tetanus after the hacking incident. Considering the
circumstances surrounding Javier's death, his wound could have been infected by
tetanus 2 or 3 or a few but not 20 to 22 days before he died.
The rule is that the death of the victim must be the direct, natural, and logical-
consequence of the wounds inflicted upon him by the accused. (People v.
Cardenas, supra) And since we are dealing with a criminal conviction, the proof
that the accused caused the victim's death must convince a rational mind beyond
reasonable doubt. The medical findings, however, lead us to a distinct possibility
that the infection of the wound by tetanus was an efficient intervening cause later
or between the time Javier was wounded to the time of his death. The infection
was, therefore, distinct and foreign to the crime.
50. CHUA
TOLENTINO V. CARLOS
FACTS: The fiscal of the City of Baguio filed an information against the petitioner
charging him with malversation of public funds in the City of Baguio, during the
period from January 1 to February 8, 1938. The information alleged that the
petitioner being then the postmaster in the post office of Baguio and an official of
the Commonwealth of the Philippines and having under his custody public funds
in the total amount of P27,061.90, which funds and postage stamps belonged to
the Commonwealth of the Philippines, and being under the legal duty to keep
custody thereof, account therefor, and return the same in due time to the said
Government criminally misappropriated the said property, failed to account
therefor, and took the same for his own use and benefit.
In view of the verified petition and allegations of the complaint, the
respondent judge issued the writ of attachment and an officer of the court
attached the petitioner's property.
The petitioner in his reply averred that the obligation relied upon in the
civil action having arisen from the crime which gave rise to the prosecution for
malversation of public funds, the civil action cannot be maintained until final
judgment has been rendered in the criminal case.
ISSUE: Whether the petitioner is still civilly liable
RULING: Yes, It is evident that in such case the basis of the civil action may be
an obligation arising from the law, contract, quasi-contract, or quasi-delict. Thus, a
postmaster, who has been charged criminally for malversation of government
funds under his custody, may still be made a defendant in a civil case for the
recovery of the funds, not on the ground of malversation, but on the ground that
under Sec. 633 of the Revised Administrative Code, he can be held accountable
therefor.61
51 CRUZ
Abando v Lozada
91 PHIL 1 (1952)
Facts: Philippine Airlines’ plane flight from Camarines Norte to Manila exploded in
mid-air due to “dynamite surreptitiously introduced by criminals. Herein petitioners,
wife and child of one of the victims, filed a complaint stating that PAL had
allegedly failed to carry safely their head of the family to his place of destination.
The case was set for hearing but respondent judge suspended the hearing until
the final determination of the criminal case which was pending appeal in the
Supreme Court. Hence, this petition for certiorari. Petitioners contend that Rule
107 of the Rules of Court is not applicable because there cause of action in the
civil case is based on culpa contractual and on the civil liability arising from the
offense involved in the criminal case. Respondent contested petitioners failed to
expressly reserve her right to institute another action separately and that they may
no longer institute another action.
Issue: Whether petitioners’ right of action under the RPC and Civil Code excludes
each other which bar them from availing both remedies.
Ruling: No. The court emphasized that these two actions are separate and
distinct and should not be confused one with the other. In the supposition that the
one accused in the criminal case is a driver, employee, or dependent of the
respondent company, the failure to reserve the right to institute a separate civil
action in the criminal case would not necessarily constitute a bar to the institution
of the civil action against respondent, for the cause of action in one is different
from that in the other. These are two independent actions based on distinct
causes of action.
52 DARLUCIO
TAMARGO vs. CA G.R. No. 85044
FACTS:
On 20 October 1982, Adelberto Bundoc, a minor, 10 years old, shot Jennifer
Tamargo with an air rifle causing injuries which resulted in her death. The natural
parents of Tamargo filed a complaint for damages against the natural parents of
Adelberto with whom he was living the time of the tragic incident.In December
1981, spouses Sabas and Felisa Rapisura filed a petition to adopt Adelberto. The
petition was granted in November 1982 that is after Adelberto had shot and killed
Jennifer. Adelberto’s parents, in their Answer, claimed that the spouses Rapisura
were indispensable parties to the action since parental authority had shifted to
them from the moment the petition for adoption was decreed. Spouses Tamargo
contended that since Adelberto was then actually living with his natural parents,
parental authority had not ceased by mere filing and granting of the petition for
adoption. Trial court dismissed the spouses Tamargo’s petition.
ISSUE:
Whether Bundoc Sposes are the indispensable parties to suit for damages
RULING:
Yes, in the instant case, the shooting of Jennifer by Adelberto with an air rifle
occured when parental authority was still lodged in respondent Bundoc spouses,
the natural parents of the minor Adelberto. It would thus follow that the natural
parents who had then actual custody of the minor Adelberto, are the
indispensable parties to the suit for damages. The civil liability imposed upon
parents for the torts of their minor children living with them, may be seen to be
based upon the parental authority vested by the Civil Code upon such parents.
The civil law assumes that when an unemancipated child living with its parents
commits a tortious acts, the parents were negligent in the performance of their
legal and natural duty closely to supervise the child who is in their custody and
control. Parental liability is, in other words, anchored upon parental authority
coupled with presumed parental dereliction in the discharge of the duties
accompanying such authority. The parental dereliction is, of course, only
presumed and the presumption can be overtuned under Article 2180 of the Civil
Code by proof that the parents had exercised all the diligence of a good father of a
family to prevent the damage.
53 FLORES
AMADORA v CA
FACTS: Alfredo Amadora was killed through gun shots fired by PablitoDaffon
during his commencement exercises. Daffon was convicted for homicide through
reckless imprudence. The petitioners in this case, were the victim’s parents who
had filed a civil action for damages by virtue of Article 2180 of the Civil Code
against their late son’s school, Colegio de San Jose-Recoletos, the principal of the
high school, the dean of the boys, the physics teacher, along with Daffon and two
other students through their respective parents. All of the defendants except the
students were to be held liable to pay P294,984.00 which included death
compensation, costs of litigation, funeral expenses, loss or earning capacity.
ISSUE: Whether there can be civil liability on the other parties besides Pablito
Daffon.
RULING: Negative, the court ruled that the other parties with the exception of
Pablito Daffon are exempted from civil liability. The court had noted that the injury
inflicted upon the victim was done in behalf of the student and not of the school
itself. The court had involved Article 2180 in its decision which states that, “The
responsibility treated in this article shall cease when the Persons herein
mentioned prove that they observed all the diligence of a good father of a family to
prevent damages.” The court contended that by virtue of Article 2180, the school
cannot be civilly liable because only a teacher or head of the school of arts and
trades can be responsible for damages towards students or apprentices and
cannot be a subject of a tort due to not having been charged with the custody of
the offending student or has committed any fault in the discharge of his duties as
to such custody. The high school principal and the dean of boys are not subject to
civil liability for both of them were not the teacher-in-charge and were only
exercising a general authority rather than direct control and influence exerted in
the position of the teacher-in-charge. Thus, civil liability is only vested upon
Pablito Daffon.
54 GENON
PSBA vs. CA
FACTS: Carlitos Bautista was stabbed while on the second floor premises of the
schools by assailants who were not members of the
schools academic community. This prompted the parents of the deceased to file a
suit in the RTC of Manila for damages against PSBA and its corporate officers.
The defendant schools (now petitioner) sought to have the suit dismissed on the
ground of no cause of action and not within the scope of the provision of Art 2180
since it is an academic institution. The trial court overruled the petitioner’s
contention and its decision was later affirmed by the appellate court.
ISSUE: Whether or not the decision of the appellate court primarily anchored on
the law of quasi-delicts is valid.
RULING: The SC did not agree with the premises of the CA’s ruling. Article 2180,
in conjunction with Article 2176 of the Civil Code, establishes the rule in in loco
parentis. It had been stressed that the law (Article 2180) plainly provides that the
damage should have been caused or inflicted by pupils or students of the
educational institution sought to be held liable for the acts of its pupils or students
while in its custody. However, this material situation does not exist in the present
case for, as earlier indicated, the assailants of Carlitos were not students of
PSBA, for whose acts the school could have been made liable.
However, it does not necessarily follow that PSBA is not liable. When an
academic institution accepts students for enrollment, there is established a
contract between them, resulting in bilateral obligations which both parties are
bound to comply with. Moreover, there is that “built-in” obligation to provide
students with an atmosphere that promotes or assists in attaining its primary
undertaking of imparting knowledge. The school must ensure that adequate steps
are taken to maintain peace and order within the campus premises and to prevent
the breakdown thereof.
Because the circumstances of the present case evince a contractual relation
between PSBA and Carlitos, the rules on quasi-delict do not really govern.
However, the mere fact that a person is bound to another by contract does not
relieve him from extra-contractual liability to such person. When such a
contractual relation exists the obligor may break the contract under such
conditions that the same act which constitutes a breach of the contract would
have constituted the source of an extra-contractual obligation had no contract
existed between the parties. Art. 21 of the Civil Code comes to mind, so that
should the act which breaches a contract be done in bad faith and violative of Art.
21, then there is a cause to view the act as constituting a quasi-delict.
In the present case, there is no finding that the contract between the school and
Carlitos had been breached thru the former’s negligence in providing proper
security measures.
55. HALID
PAL V. CA
FACTS: Respondent Pantejo boarded a PAL plane in Manila and disembarked in
Cebu City where he was supposed to take his connecting flight to Surigao City
However, due to typhoon Osang, the connecting flight to Surigao City was
cancelled. When the flight for Surigao was resumed, respondent Pantejo came to
know that the hotel expenses of his co-passengers were reimbursed by PAL. At
this point, Pantejo informed PAL's Manager at Mactan Airport that he was going to
sue the airline for discriminating against him and he filed at Regional Trial Court of
Surigao City.
ISSUE: Whether petitioner airlines acted in bad faith when it failed and refused to
provide accommodations for respondent or to reimburse him incurred by reason of
the cancellation of its connecting flight due to force majeure.
RULING: YES. Petitioner acted in bad faith in disregarding its duties as a
common carrier to its passengers and in discriminating against herein respondent.
It must be emphasized that a contract to transport passengers is quite different in
kind and degree from any other contractual relation, and this is because of the
relation which an air carrier sustain with the public. Its business is mainly with the
travelling public. Neglect or malfeasance of the carrier's employees naturally could
give ground for an action for damages
Moral damages are emphatically not intended to enrich a plaintiff at the expense
of the defendant. They are awarded only to allow the former to obtain means,
diversion, or amusements that will serve to alleviate the moral suffering he has
undergone due to the defendant's culpable action and must, perforce, be
proportional to the suffering inflicted
56-Hammisani
Gutierrez VS Gutierrez
FACTS:
On February 2, 1930, a passenger truck and an automobile of private ownership
collided while attempting to pass each other on a bridge. The truck was driven by
the chauffeur Abelardo Velasco, and was owned by saturnine Cortez. The
automobile was being operated by Bonifacio Gutierrez, a lad 18 years of age, and
was owned by Bonifacio’s father and mother, Mr. and Mrs. Manuel Gutierrez. At
the time of the collision, the father was not in the car, but the mother, together with
several other members of the Gutierrez family were accommodated therein.
The collision between the bus and the automobile resulted in Narciso Gutierrez
suffering a fractured right leg which required medical attendance for a
considerable period of time.
ISSUE:
Whether or not both the driver of the truck and automobile are liable for damages
and indemnification due to their negligence
RULING:
Yes. They are both liable. Bonifacio Gutierrez’s obligation arises from culpa
aquiliana. On the other hand, Saturnino Cortez’s and his chauffeur Abelardo
Velasco’s obligation rise from culpa contractual.
The youth Bonifacio was an incompetent chauffeur that he was driving at an
excessive rate of speed, and that, on approaching the bridge and the truck; he lost
his head and so contributed by his negligence to the accident. The guaranty given
by the father at the time the son was granted a license to operate motor vehicles
made the father responsible for the acts of his son. Based on these facts,
pursuant to the provisions of Article 1903 of the Civil Code, the father alone and
not the minor or the mother would be liable for the damages caused by the minor.
The can take cognizance of the common law rule on the same subject. In the
United States, it is uniformly held that the head of a house, the owner of an
automobile, who maintains it for the general use of his family, is liable for its
negligent operation by one of his children, whom he designates or permits to run
it. The liability of Saturnino Cortez, the owner of the truck, and his chauffeur
Abelardo Velasco rests on a different basis, namely, that of contract.
Natividad V. Andamo, Et Al., V. Intermediate Appellate Court Et Al. (1990)
Facts: Petitioner spouses Emmanuel and Natividad Andamo are the owners of a
parcel of land situated in Biga (Biluso) Silang, Cavite which is adjacent to that of
private respondent, Missionaries of Our Lady of La Salette, Inc., a religious
corporation.
Within the land of respondent corporation, waterpaths and contrivances, including
an artificial lake, were constructed, which allegedly inundated and eroded
petitioners' land, caused a young man to drown, damaged petitioners' crops and
plants, washed away costly fences, endangered the lives of petitioners and their
laborers during rainy and stormy seasons, and exposed plants and other
improvements to destruction.
In July 1982, petitioners instituted a criminal action, docketed as Criminal Case
No. TG-907-82, before the Regional Trial Court of Cavite, Branch 4 (Tagaytay
City), against Efren Musngi, Orlando Sapuay and Rutillo Mallillin, officers and
directors of herein respondent corporation, for destruction by means of inundation
under Article 324 of the Revised Penal Code.
Subsequently, on February 22, 1983, petitioners filed another action against
respondent corporation, this time a civil case, docketed as Civil Case No. TG-748,
for damages with prayer for the issuance of a writ of preliminary injunction before
the same court.
On March 11, 1983, respondent corporation filed its answer to the complaint and
opposition to the issuance of a writ of preliminary injunction. Hearings were
conducted including ocular inspections on the land. However, on April 26, 1984,
the trial court, acting on respondent corporation's motion to dismiss or suspend
the civil action, issued an order suspending further hearings in Civil Case No, TG-
748 until after judgment in the related Criminal Case No. TG-907-82.
Resolving respondent corporation's motion to dismiss filed on June 22, 1984, the
trial court issued on August 27, 1984 the disputed order dismissing Civil Case No.
TG-748 for lack of jurisdiction, as the criminal case which was instituted ahead of
the civil case was still unresolved. Said order was anchored on the provision of
Section 3 (a), Rule III of the Rules of Court which provides that "criminal and civil
actions arising from the same offense may be instituted separately, but after the
criminal action has been commenced the civil action cannot be instituted until final
judgment has been rendered in the criminal action."
ISSUE/S:
1.
W/N there is quasi-delict even if done in private propety
2. Whether or not Quasi-delict can be instituted independently from the criminal
case
Ruling:
Yes All the elements of a quasi-delict are present, to wit:
(a) damages suffered by the plaintiff
(b) fault or negligence of the defendant, or some other person for whose acts
he must respond
(c) the connection of cause and effect between the fault or negligence of the
defendant and the damages incurred by the plaintiff.
While the property involved in the cited case belonged to the public domain
and the property subject of the instant case is privately owned, the fact
remains that petitioners' complaint sufficiently alleges that petitioners have
sustained and will continue to sustain damage due to the waterpaths and
contrivances built by respondent corporation.
It must be stressed that the use of one's property is not without
limitations. Article 431 of the Civil Code provides that "the owner of a
thing cannot make use thereof in such a manner as to injure the rights
of a third person." SIC UTERE TUO UT ALIENUM NON
LAEDAS. Moreover, adjoining landowners have mutual and reciprocal
duties which require that each must use his own land in a reasonable
manner so as not to infringe upon the rights and interests of others. Although
we recognize the right of an owner to build structures on his land, such
structures must be so constructed and maintained using all reasonable care
so that they cannot be dangerous to adjoining landowners and can withstand
the usual and expected forces of nature. If the structures cause injury or
damage to an adjoining landowner or a third person, the latter can claim
indemnification for the injury or damage suffered.
2. Yes, Article 2177. Responsibility for fault or negligence under the
preceding article is entirely separate and distinct from the civil liability arising
from negligence under the Penal Code. But the plaintiff cannot recover
damages twice for the same act or omission of the defendant.
Whether it be conviction or acquittal would render meaningless the
independent character of the civil action and the clear injunction in Article 31,
that his action may proceed independently of the criminal proceedings and
regardless of the result of the latter.
The same negligence causing damages may produce civil liability
arising from a crime under the Penal Code, or create an action for
quasi-delicts or culpa extra-contractual under the Civil Code.
Therefore, the acquittal or conviction in the criminal case is entirely
irrelevant in the civil case, unless, of course, in the event of an
acquittal where the court has declared that the fact from which the civil
action arose did not exist, in which case the extinction of the criminal
liability would carry with it the extinction of the civil liability.
59.LIM
Araneta vs. De Joya
FACTS: Sometime in November 1952 the respondent, then general manager of
the Ace Advertising, proposed to the board of directors that an employee, Ricardo
Taylor, be sent to the United States to take up special studies in television but the
board failed to act on the proposal. Still, respondent sent Taylor abroad, on
September 1953, and assured J. Antonio Araneta, company director, that the trip
will be funded by other parties, as respondent later confirmed in a memorandum.
From September 1, 1953 to March 15, 1954, Taylor continued receiving his
salaries while abroad. His salaries was ordered and approved by the respondent
and were included in the semi-monthly payroll checks of the corporation
employees. Three of the checks were signed by the company treasurer, who also
put up part of the bill connected with Taylor’s trip and handed him letters for
delivery in the US. A total of P5,043.20 was disbursed by Ace Advertising for
Taylor’s travel and studies. The company filed a complaint for recovery of sum,
with the court of first instance in Manila, alleging they had no knowledge of the
engagement neither they authorized nor ratified it. The respondent denied all
charges, also alleging that it was for the company’s benefit. A 3rd-party complaint
was filed against Vicente Araneta, company treasurer, for signing the checks, and
Ricardo Taylor. Vicente Araneta and respondent claimed they signed the
documents in good faith.
The trial court ordered the respondent to pay the sum disbursed by Ace
Advertising, P5,043.20, and dismissed the third-party complaint. The respondent
appealed and the CA affirmed the trial court’s decision but reversed the judgment
on the 3rd-party case stating that Vicente Araneta and Taylor were complicit in the
unauthorized disbursement of corporate moneys jointly with the appellant.
ISSUE: Whether or not respondent is guilty of a quasi-delict.
RULING: Yes. The Court upheld the decision of the CA. The Court agrees that
the respondent neglected to perform his duties properly, to the damage of the firm
of which he was an officer and affirmed that the acts of the respondent, Vicente
Araneta, and Ricardo Taylor affirm their guilt of unauthorized disbursement of
corporate moneys, without evidence to prove otherwise. And as it was an
unauthorized act of expenditure of corporate funds, and it was these three without
whose acts the same could not have happened, the juridical situation was a
simple quasi-delict by them committed upon the corporation, for which solidary
liability should have been imposed upon all in the first place, Art. 2194, New Civil
Code; and only De Joya having been sued and made liable by the corporation, it
was the right of the latter to ask that his two joint tortfeasors be made to shoulder
their proportional responsibility.
60. MACAPUGAY
Coca-Cola Bottlers Philippines, Inc. v. CA
FACTS: Private respondent Lydia Geronimo was the proprietress of Kindergarten
Wonderland Canteen in Dagupan City. In 1989, the Coke and Sprite soft drinks
which she sold were found to have fiber-like matter and other foreign substances
thereby prompted other parents and students to complain. The said soft drinks
were brought for examinations in DOH and were discovered to be “adulterated”.
As a consequence, her sales of soft drinks severely plummeted that she had to
close the canteen. She demanded damages from Coca-Cola Bottlers Philippines
before the RTC Dagupan City, however was dismissed. On appeal, the CA
reversed the decision of the foregoing and held that the private respondent’s
complaint is on quasi-delict because of the petitioner’s act of negligently
manufacturing adulterated food items intended to be sold in the public and that the
existence of contractual relations between the parties does not absolutely
preclude an action by one against the other for quasi-delict arising from
negligence in the performance of contract.
ISSUE: Whether the action for damages by the private respondent against Coca-
Cola Bottlers Philippines should be treated as one for breach of implied warranty
against hidden defects, which must be filed within six months from the delivery of
the thing sold, or one of quasi-delict which can be filed within four years pursuant
to Article 1146 of the Civil Code.
RULING: No. The Supreme Court ruled that the action is under quasi-delict,
henceforth, can be filed within four years pursuant to Article 1146 of the Civil
Code. The alleged complaint pointed the reckless and negligent manufacture of
adulterated food items intended to be sold for public consumption. The vendee's
remedies against a vendor with respect to the warranties against hidden defects
of or encumbrances upon the thing sold are not limited to those prescribed in
Article 1567 of the Civil Code. In the same way, the vendor can be held liable for
quasi-delict pursuant to Article 2176 of the same code in which the vendee may
brought. The existence of a contract between the parties does not bar the
commission of a tort by the one against the other and the consequent recovery of
damages therefor. Liability for quasi-delict may still exist despite the presence of
contractual relations.
61 MUSA
American Express International, Inc. v. Noel Cordero
FACTS:
American Express International is a foreign corporation that issued charge cards
used to purchase goods and services at accredited merchants worldwide to its
customers. Nilda Cordero, wife of respondent Noel Cordero, was issued an
American Express charge card. An extension charge card, was likewise issued to
respondent Noel Cordero which he also signed. Respondent, together with his
family went on a three-day holiday trip to Hong Kong. The group went to the
Watson’s Chemist Shop. Noel picked up chocolate candies and handed his
American Express extension charge card to the sales clerk to pay for his
purchases. The sales clerk verified the card by making a telephone call to the
American Express Office in Hong Kong. When the Watson’s sales clerk called up
petitioner’s Hong Kong Office, its representative said he wants to talk to
respondent in order to verify the latter’s identity, pursuant to the procedure
observed under the “Inspect Airwarn Support System.” However, respondent
refused. Consequently, petitioner’s representative was unable to establish the
identity of the cardholder. This led to the confiscation of respondent’s card.
Thereupon, the manager cut the respondent’s American Express card in half with
a pair of scissors. This, according to respondent, caused him embarrassment and
humiliation. Cordero filed with the RTC a complaint for damages against petitioner
and the RTC ruled in favor Cordero. Hence this petition.
ISSUE:
Whether or not there is obligation on the part of the petitioner on the basis of
negligence.
RULING:
No. The Court ruled that petitioner can revoke respondent’s card without notice,
as was done. The subject card would not have been confiscated and cut had
respondent talked to petitioner’s representative and identified himself as the
genuine cardholder. As explained by respondent himself, he could have used his
card upon verification by the sales clerk of Watson that indeed he is the
authorized cardholder. That could have been accomplished had respondent talked
to petitioner’s representative, enabling the latter to determine that respondent was
indeed the true holder of the card. Clearly, no negligence which breached the
contract could have been attributed to petitioner. If at all, the cause of
respondent’s humiliation and embarrassment was his refusal to talk to petitioner’s
representative. It was thus safe to conclude that there was no negligence on the
part of petitioner and that, therefore, it cannot be held liable to respondent for
damages.
62 OCENA
YHT Realty Corporation v. CA
FACTS: Maurice McLaughlin is an Australian national who comes to the
Philippines for business. During his trips, he stays in Tropicana, a hotel
recommended to him by Brunhilda Tan. McLaughlin deposited cash and jewelry to
the safety deposit box of the Hotel. The safety deposit box cannot be opened
unless the key of the guest and that of the management are present. Lainez and
Payam are employees of Tropicana who is charged with the custody of the keys.
Thereafter, McLaughlin found out that some of the money and jewelry he
deposited were missing. Lainez and Payam admitted that they assisted Tan to
open his deposit box. Tan admitted that she stole McLaughlin’s keys. Tan
executed a promissory note to cover the amount of the stolen money and jewelry.
McLaughlin wanted to make the management liable.
ISSUE: Whether YHT is liable despite the waiver of Respondent as executed in
the conditions for renting the safety deposit box entitled "Undertaking for the Use
of Safety Deposit Box.”
RULING: Yes. The hotel-keeper cannot free himself from responsibility by posting
notices to the effect that he is not liable for the articles brought by the guest. Any
stipulation between the hotel-keeper and the guest whereby the responsibility of
the former as set forth in Articles 1998 to 2001 is suppressed or diminished shall
be void. Article 2003 was incorporated in the New Civil Code as an expression of
public policy precisely to apply to situations such as that presented in this case.
Catering to the public, hotelkeepers are bound to provide not only lodging for hotel
guests and security to their persons and belongings. The twin duty constitutes the
essence of the business. The law in turn does not allow such duty to the public to
be negated or diluted by any contrary stipulation in so-called “undertakings” that
ordinarily appear in prepared forms imposed by hotel keepers on guests for their
signature. Under Article 1170 of the New Civil Code, those who, in the
performance of their obligations,are guilty of negligence, are liable for damages.
As to who shall bear the burden of paying damages, Article 2180, paragraph 4 of
the same Code provides that the owners and managers of an establishment or
enterprise are likewise responsible for damages caused by their employees in the
service of the branches in which the latter are employed or on the occasion of
their functions. Also, this Court has ruled that if an employee is found negligent, it
is presumed that the employer was negligent in selecting and/or supervising him
for it is hard for the victim to prove the negligence of such employer. Tropicana
was guilty of concurrent negligence in allowing Tan, who was not the registered
guest, to open the safety deposit box of McLoughlin, even assuming that the latter
was also guilty of negligence in allowing another person to use his key. To rule
otherwise would... result in undermining the safety of the safety deposit boxes in
hotels for the management will be given imprimatur to allow any person, under the
pretense of being a family member or a visitor of the guest, to have access to the
safety deposit box without fear of any liability... that will attach thereafter in case
such person turns out to be a complete stranger. This will allow the hotel to evade
responsibility for any liability incurred by its employees in conspiracy with the
guest's relatives and visitors.
63 REYES
Manila Railroad Co. vs. Compania Transatlantica and AG&P
FACTS:
Steamship Alicante, belonging to Compania Transatlantica de Barcelona, was
transporting two locomotive boilers for the Manila Railroad Company. The
equipment of the ship for discharging the heavy cargo was not strong enough to
handle the boilers. Compania contracted the services of Atlantic Gulf and Pacific
Co., which had the best equipment to lift the boilers out of the ship’s hold. When
Alicante arrived in Manila, Atlantic Company sent out its floating crane under the
charge of one Leyden. When the first boiler was being hoisted out of the ship’s
hold, the boiler could not be brought out because the sling was not properly
placed and the head of the boiler was caught under the edge of the hatch. The
weight on the crane was increased by a strain estimated at 15 tons with the result
that the cable of the sling broke and the boiler fell to the bottom of the ship’s hold.
The sling was again adjusted and the boiler was again lifted but as it was being
brought up the bolt at the end of the derrick broke and the boiler fell again. The
boiler was so badly damaged that it had to be shipped back to England to be
rebuilt. The damages suffered by Manila Railroad amounted to P23,343.29.
Manila Railroad then filed an action against the Steamship Company to recover
said damages. The Steamship Company caused Atlantic Company to be brought
as co-defendant arguing that Atlantic Company as an independent contractor,
who had undertaken to discharge the boilers, had become responsible for the
damage. The CFI decided in favor of Manila Railroad against Atlantic Company,
but absolved the Steamship Company from any liability.
ISSUE:
Whether the Steamship Company can be held liable.
RULING:
Yes. A contractual relation existed between Manila Railroad and the Steamship
Company; and the duties of the latter with respect to the carrying and delivery of
the boilers are to be discovered by considering the terms and legal effect of that
contract. A contractual relation also existed between the Steamship Company and
the Atlantic Company. On the other hand, no contractual relation existed directly
between Manila Railroad and the Atlantic Company.
Hence, the Steamship Company is liable to Manila Railroad upon its contract of
carriage for damage resulting to cargo by reason of the negligence of a
contracting company in discharging the freight from the ship's hold; and the
circumstance that the Steamship Company had used due diligence in selecting a
competent person to discharge the cargo does not exempt the ship's company
from liability. The failure to comply with a contractual obligation cannot be excused
by proof that the damage was due to the negligence of one whom the contracting
party has selected to perform the contract.
64 SABTALUH
NECESITO, vs. PARAS
{G.R. No. L-10605, June 30, 1958}
FACTS:
A mother and her son boarded a passenger auto-truck of the Philippine Rabbit
Bus Lines. While entering a wooden bridge, its front wheels swerved to the right,
the driver lost control and the truck fell into a breast-deep creek. The mother
drowned and the son sustained injuries. These cases involve actions ex contractu
against the owners of PRBL filed by the son and the heirs of the mother. Lower
Court dismissed the actions, holding that the accident was a fortuitous event.
ISSUE:
Whether or not the carrier is liable for the manufacturing defect of the steering
knuckle.
RULING:
Yes. While the carrier is not an insurer of the safety of the passengers, the
manufacturer of the defective appliance is considered in law the agent of the
carrier, and the good repute of the manufacturer will not relieve the carrier from
liability. The rationale of the carrier’s liability is the fact that the passengers has no
privity with the manufacturer of the defective equipment; hence, he has no remedy
against him, while the carrier has. We find that the defect could be detected. The
periodical, usual inspection of the steering knuckle did not measure up to the
“utmost diligence of a very cautious person” as “far as human care and foresight
can provide” and therefore the knuckle’s failure cannot be considered a fortuitous
event that exempts the carrier from responsibility.
65 SALINAS
HSBC v. Catalan
Facts: Catalan filed before the RTC, a complaint for sum of money with damages
against petitioner praying that HSBANK and HSBC TRUSTEE be ordered to pay
P20,864,000.00 representing the value of the five checks issued by Thomson to
respondent. The checks when deposited were returned by HSBANK purportedly
for reason of “payment stopped” pending confirmation, despite the fact that the
checks were duly funded, and that Thomson has demanded the bank to pay the
same. Catalan alleged in the complaint the gross inaction of HSBANK on
Thomson’s instructions, as well as its evident failure to inform Catalan of the
reason for its continued inaction and non-payment of the checks. Catalan invoked
Article 19 of the Civil Code as basis for her cause of action. HSBANK & HSBC
TRUSTEE filed Motions to Dismiss. The RTC denied the two motions to dismiss.
HSBANK and HSBC TRUSTEE filed separate petitions for certiorari and/or
prohibition with the CA. The CA dismissed the two petitions for certiorari. Hence,
the present petitions.
Issue: Whether the payee may sue the drawee bank based on tort under Art. 19 of
the New Civil Code.
Ruling: Yes, the payee may sue the bank under Art. 19. In order to be liable
under the abuse of rights principle, three elements must concur, to wit: (a) that
there is a legal right or duty; (b) which is exercised in bad faith; and (c) for the sole
intent of prejudicing or injuring another. It is evident that Catalan is suing HSBANK
and HSBC TRUSTEE for unjustified and willful refusal to pay the value of the
checks.
HSBANK claims that Catalan has no cause of action because under
Section 189 of the Negotiable Instruments Law, “a check of itself does not operate
as an assignment of any part of the funds to the credit of the drawer with the bank,
and the bank is not liable to the holder unless and until it accepts or certifies it.”
However, HSBANK is not being sued on the value of the check itself but for how it
acted in relation to Catalan’s claim for payment despite the repeated directives of
the drawer Thomson to recognize the check the latter issued.
Anent HSBC TRUSTEE, it is being sued for the baseless rejection of
Catalan’s claim. When Catalan went to the extent of traveling to Hongkong to
deliver personally the checks, HSBC TRUSTEE summarily disapproved her claim
with nary a reason.
66. SALVADOR
G.F. Equity v. Valenzona
Abuse of Rights
Facts: GF Equity hired Valenzona as Head Coach of the Alaska basketball team
under a contract of employment.During his stint as Alaska's head coach the team
placed third in PBA Conferences in 1988. Valenzona was later advised by the
management of GF Equity of the termination of his service on the grounds that in
the sole opinion of the corporation Valenzona failed to exhibit sufficient skill or
competitive ability to coach the team. Valenzona on the other hand filed a
complaint against GF Equity for breach of contract with damages.
Issue: Whether GF Equity abused its rights.
Ruling: Yes. The court ruled that while a corporation's act of pre-terminating the
services of a coach cannot be considered willful where it was based on a
stipulation, albeit declared void, it, in doing so, failed to consider the abuse of
rights principle enshrined in Art. 19 of the New Civil Code. Since the pre-
termination of the contract was anchored on an illegal ground, hence, contrary to
law, and GF Equity negligently failed to provide legal basisfor such pre-
termination; GF Equity failed to exercise in a legitimate manner its right to pre-
terminate the contract, thereby abusing ht eight of Valenzona to thus entitle him to
damages under Art 19 in relation to Art 20 of the new Civil Code.
Main Point: This provision of law (Art 19 of NCC) set standards which must be
observed in the xercise of one's rights as well as in the performance of its duties,
to wit: act with justive; give everyone his due; and observe honesty and good faith.
Case No. 67 - Tan 69 VARGAS Arts. 1163-1178
Jardine Davies Inc. vs. CA
Royal Shirt Factory, Inc. v Co Bon Tic
FACTS: Purefoods decided to install two generators in its food processing plant in
Marikina City. A bidding for the supply and installation of the generators was held. FACTS: The case was brought to the MunicipaL Court of Manila by Royal Shirt
Only 3 bidders, FEMSCO, MONARK and ADVANCE POWER submitted bid Factory, Inc. to recover from Co Bon Tic for a sum of P1, 422 from the balance of
proposals. the purchased price of 350 pairs of “Balleteenas” shoes which cost P7 a pair. On
Purefoods President Po confirmed the award of the contract to FEMSCO. August 27, 1948, there was interest of 12% and 25 cent for attorney’s fees and
FEMSCO submitted the required performance bond in the total amount of P 7.21 costs. In a document it was included that the agreement with Co Bon Tic was a
million, which the former acknowledged However, unilaterally canceled the award slaw as one on consignment, sell as many shoes as he could for any price but pay
as “significant factors were uncovered and brought to their attention which dictate P8 a pair at the end of nine days and return any unsold shoes.
the cancellation FEMSCO protested the cancellation of the award. Before the
matter could be resolved, Purefoodsawarded the project and entered into a ISSUE: Whether the agreement between the parties a sale on consignment?
contract with Jardine Davies, Inc., which was not one of the bidders. FEMSCO
sued Purefoods and JARDINE: Purefoods for reneging on its contract, and RULING: No. Since in making of partial payment, Co Bon Tic made no mention of
JARDINE for its unwarranted interference and inducement. how many number of shoes he sold and unsold, though he should have done
since the sale was on consignment basis. A consignment sale is a trading
ISSUE: Whether FEMSCO is entitled for damages? arrangement in which the seller send the goods to the buyer for him to sell and
pays him when the goods are sold.
RULING: Yes. By the unilateral cancellation of the contract, Purefoods has acted
with bad faith and this was further aggravated by the subsequent inking of a
contract between Purefoods and Jardine. This is a flagrant violation of the express
provisions of the law and is contrary to fair and just dealings to which every man is
due. Also, FEMSCO has sufficiently shown that its reputation was tarnished after
it immediately ordered equipment from its suppliers on account of the urgency of
the project, only to be canceled later. However, Jardine was not proven to have
induced Purefoods. Therefore, Jardine is not liable for damages.
68 TORIBIO
Hill vs. Veloso GR L-9421 (1916)
FACTS: On December 30, 1910, a promissory note was executed by Maxima
Veloso in behalf of husband in favor of Michael & Co. then subsequently indorsed
to LL. Hill for payment and collection. The appellees in this case alleges that such
note was secured through deceit and fraud and that it was a blank document
presented when signed I the belief that it will be in settlement of another obligation
with the children of Damasa RIcablanca. Such special defense of error is alleged
by the appellees to dismiss the obligation which they have not been aware due to
the fraud employed by Domingo Franco. The appellants argue that such
promissory note was negotiated in good faith and makes the parties in the
document binding in the absence of proof for such defense of error.
ISSUE 1: Whether or not the special defense of error and deceit would prosper to
extinguish the liability arising from contract?
ISSUE 2: Whether or not the debt of Maxima Veloso to pay is validly
transmissible?
RULING 1: No. The burden of proof for such deceit must conform with Art 1268 of
the Civil Code for the deceit and fraud be considered and qualified. Failure to
prove such allegation no error can be sustained and appreciated and makes the
obligation perfectly valid and demandable.
RULING 2: Yes. The instrument that is negotiated carries with it a valid obligation
to pay and subsequent indorsement of such instrument to another would be valid
according to Art 1178 of the Civil Code which does not bar any transmission of
obligation unless contrary stipulations are indicated.