digest for oblicon

8/9/2019 DIGEST for Oblicon

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OBLICON DIGEST TROPANG POTCHI

G.R. No. L-4197 March 20, 1952

FIDELA SALES DE GONZAGA, plaintiff-appellant,vs.

THE CROWN LIFE INSURANCE COMPANY, defendant-appellee.

FACTS:

September 26, 1939: Crown Life Insurance Co. whose home

office is based in Toronto, Canada issued to Ramon Gonzagathrough its branch office in Manila a 20-year endowment

policy for P15,000 which had an annual premium of P591.

Payment was only until September 6, 1941 because of the

outbreak of the war since Crown is an enemy corp. order to

be closed during the Japanese occupation. However,

despite that it offered a privilege to accept premium

payments in the place of its employee in Ermita but of

which Gonzaga did not avail.

Through the automatic premium loan clause, it continued

until June 12, 1943

May 1, 1945: It reopened but still Gonzaga did not pay

although there was a reinstatement clause providing certain

conditions within three years from the date of lapse on

application of the insured

June 27, 1945: Gonzaga died from an accident

Crown refused to pay because of the lapse of premium

payment

RTC: against Gonzaga

ISSUE: W/N Gonzaga's widow can claim despite the absence of

premium payment during the outbreak of the war

HELD: NO. Affirmed

Non-payment at the day involves absolute forfeiture is such

be the terms of the contract

failure to notify the postal address during the war is not an

excuse

There is no duty when the law forbids and there is noobligation without corresponding right enjoyed by another

opening of an interim office partook of the nature of the

privilege to the policy holders to keep their policies

operative rather than a duty to them under the contract

Villaroel v. Estrada, 71 Phil. 140(1940)

Petitioner: JUAN F. VILLARROEL

Respondent: BERNARDINO ESTRADA,

Ponente: Avanceña

DOCTRINE: (Natural Obligation)

Not being based on positive law but on equity and natural law, do

not grant a right of action to enforce their performance, but aftervoluntary fulfillment by the obligor, they authorize the retention

of what has been delivered or rendered by reason thereof.

FACTS:

1. On May 9, 1912, Alexander F. Callao, mother of Juan F.

Villaroel, obtained from the spouses Mariano Estrada and

Severina debt of P1,000, payable after seven years

2. Alejandra, passed away, leaving Villaroel as sole heir. The

spouses Mariano Estrada and Severinaalso passed away, leaving

Bernardino Estrada as sole heir.3. On August 9, 1930, Villaroel

gave a document to Estrada, in which he declared in owing the

amount of P1,000, with an interest of 12 percent per year. This

action turns on the collection of this amount.4. The Court of First

Instance of Lagoon, in as interposed this action, and decided for

Villaroel to pay the amount demanded of P1,000 with its legal

interests of 12percent from August 9, 1930 to its complete

payment. Villaroel appealed.

ISSUES: WON Villaroel should pay the amount despite the

prescription of the original debt

RULING + RATIO: The present action is not based on the original

obligation contracted by the mother Villaroel, which hasprescribed, but on that which he contracted on August9, 1930

when assuming the fulfillment of that obligation. Being the sole

heir of the indebted one, with right her inheritance, that debt

which was contracted by his mother legally, although no longer

effective by prescription, now is, nevertheless, amoral obligation.

That consideration is sufficient to create and to make his

obligation voluntarily contracted, effective August of 1930.The

rule in which a new promise to pay a prescribed debt must be

done only by the same person or another who is legally

authorized by her, is not applicable to the present case, because

Villaroel voluntarily wanted to assume this obligation.

G.R. No. 46274 November 2, 1939

A.O. FISHER, plaintiff-appellee,vs.

JOHN C. ROBB, defendant-appellant.

FACTS: The defendant had an agreement with the plaintiff to be a

stockholder of Philippine Greyhound Club. Having paid the second

subscription, the organization was changed to Philippine Racing

Club.

ISSUE: Whether or not a consideration for the obligation

established

HELD: Yes. In onerous contracts the consideration as to each of

the parties is the delivery or performance or the promise of

delivery or performance of a thing or service by the other party; in

remuneratory contracts the consideration is the service or benefit

for which the remuneration is given, and in contracts of pure

beneficence the consideration is the liberality of the benefactors.

The case presenting the question whether a moral obligation will

sustain an express executory promise may be divided into fiveclasses:

(1) Cases in which the moral obligation arose wholly from ethical

considerations, unconnected with any legal obligations, perfect or

imperfect, and without the receipt of actual pecuniary or material

benefit by the promisor prior to the subsequent promise;

(2) cases in which the moral obligation arose from a legal liability

already performed or still enforceable; (3)

cases in which the moral obligation arose out of, or was

connected with, a previous request or promise creating originally

an enforceable legal liability, which, however, at the time of the

subsequent express promise had become discharged or barred by

operation of a positive rule of law, so that at that time there was

no enforceable legal liability; (4) casesin which the moral obligation arose from, or was connected with,

a previous request or promise which, however, never created any

enforceable legal liability, because of a rule of law which rendered

the original agreement void, or at least unenforceable; and

(5) cases in which the moral obligation arose out of, or was

connected with, the receipt of actual material or pecuniary

benefit by the p romisor, without, however, any previous request

or promise on his part, express or implied, and therefore, of

course, without any original legal liability, perfect or imperfect.


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G.R. No. L-48006 July 8, 1942

FAUSTO BARREDO, petitioner,vs.

SEVERINO GARCIA and TIMOTEA ALMARIO, respondents.

FACTS: At about 1:30am on May 3, 1936, Fontanilla’s taxi collided

with a “kalesa” thereby killing the 16 year

old Faustino Garcia. Faustino’s parents filed a criminal suit againstFontanilla and reserved their right to file a separate civil suit.

Fontanilla was eventually convicted. After the criminal suit, Garcia

filed a civil suit against Barredo – the owner of the taxi (employer

of Fontanilla). The suit was b ased on Article 1903 of the civil code

(negligence of employers in the selection of their employees).

Barredo assailed the suit arguing that his liability is only subsidiary

and that the separate civil suit should have been filed against

Fontanilla primarily and not him.

ISSUE: Whether or not Barredo is just subsidiarily liable.

HELD: No. Authorities support the proposition that a quasi-

delict or "culpa aquiliana ". He is primarily liable under Article

1903 which is a separate civil action against negligent employers.

Garcia is well within his rights in suing Barredo. He reserved his

right to file a separate civil action and this is more expeditious

because by the time of the SC judgment Fontanilla is already

serving his sentence and has no property. It was also proven that

Barredo is negligent in hiring his employees because it was shown

that Fontanilla had had multiple traffic infractions already before

he hired him – something he failed to overcome during hearing.

Had Garcia not reserved his right to file a separate civil action,

Barredo would have only been subsidiarily liable. Further, Barredo

is not being sued for damages arising from a criminal act(his

driver’s negligence) but rather for his own negligence in selecting

his employee (Article 1903).

Some of the differences between crimes under the Penal Code

and the culpa aquiliana or cuasi-delito under the Civil Code are:

1. That crimes affect the public interest, while cuasi-delitos are

only of private concern.

2. That, consequently, the Penal Code punishes or corrects the

criminal act, while the Civil Code, by means of indemnification,

merely repairs the damage.

3. That delicts are not as broad as quasi-delicts, because the

former are punished only if there is a penal law clearly covering

them, while the latter, cuasi-delitos, include all acts in which "any

king of fault or negligence intervenes." However, it should be

noted that not all violations of the penal law produce civil

responsibility, such as begging in contravention of ordinances,

violation of the game laws, infraction of the rules of traffic when

nobody is hurt.

G.R. No. L-32599 June 29, 1979

EDGARDO E. MENDOZA, petitionervs.

HON. ABUNDIO Z. ARRIETA, Presiding Judge of Branch VIII, Courtof First Instance of Manila, FELINO TIMBOL, and RODOLFOSALAZAR, respondents.

Facts: Salazar’s owner jeep hit the car of the herein petitioner,

started that Montoya who is the truck driver hit Salazar’s owner

that is the proximate cause of the said events. Montoya was held

liable of criminal charge of reckless imprudence, damages was

awarded to Salazar and no to the petitioner.

The petitioner herein filed a civil action to Salazar and the truck

owner Timbol. The respondent judge dismissed the case for the

reason that it should be expressly reserved the filing separate civil

action

Issue: WON the petitioner is barred to file a separate civil action

to Timbol based on quasi-delict

Held: No. For petitioner's cause of action against Timbol in the

civil case is based on quasi-delict. Respondent Judge committed

reversible error when he dismissed the civil suit against the truck-

owner, as said case may proceed independently of the criminal

proceedings and regardless of the result of the latter. Article 31 of

the Civil Code provides that, “When the civil action is based on an

obligation not arising from the actor omission complained of as a

felony, such civil action may proceed independently of the

criminal proceedings and regardless of the result of the latter.”

G.R. No. 84698 February 4, 1992

PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION, JUAN D.LIM, BENJAMIN P. PAULINO, ANTONIO M. MAGTALAS, COL.PEDRO SACRO and LT. M. SORIANO, petitioners,vs.

COURT OF APPEALS, HON. REGINA ORDOÑEZ-BENITEZ, in hercapacity as Presiding Judge of Branch 47, Regional Trial Court,Manila, SEGUNDA R. BAUTISTA and ARSENIA D.BAUTISTA, respondents.

Facts: Carlitos Bautista was stabbed while on the second f loor

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: WON the decision of the appellate court primarily anchored

on the law of quasi-delicts is valid.

Held: Although the Supreme Court agreed to the decision of the

Court of Appeals to deny the petition of motion to dismiss by the

PSBA, they do not agree to the premises of the appellate court’s

ruling.

Art 2180, in conjunction with Art 2176 of the civil code establishes

the rule of in loco parentis, they can not be held liable to the acts

of Calito’s assailants which were not students of the PSBA and

because of the contractual relationship.

The school and the students, upon registration established a

contract between them, resulting in bilateral obligations. The

institution of learning must provide their students with an

atmosphere that promotes or assists its primary undertaking of

imparting knowledge, and maintain peace and order within its

premises.

The SC dismissed the petition and the case was remanded to the

trail court to determine if the school neglected its obligation to

perform based on the contractual relation of them and the

students.


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G.R. No. L-47745 April 15, 1988

JOSE S. AMADORA, LORETA A. AMADORA, JOSE A. AMADORAJR., NORMA A. YLAYA PANTALEON A. AMADORA, JOSE A.AMADORA III, LUCY A. AMADORA, ROSALINDA A. AMADORA,PERFECTO A. AMADORA, SERREC A. AMADORA, VICENTE A.AMADORA and MARIA TISCALINA A. AMADORA,petitionersvs.

HONORABLE COURT OF APPEALS, COLEGIO DE SAN JOSE-RECOLETOS, VICTOR LLUCH SERGIO P. DLMASO JR., CELESTINODICON, ANIANO ABELLANA, PABLITO DAFFON thru his parentsand natural guardians, MR. and MRS. NICANOR GUMBAN, andROLANDO VALENCIA, thru his guardian, A. FRANCISCOALONSO, respondents.

FACTS: 17 year old Alfredo Amadora was shot and killed by his

classmate Pablito Daffon inside the school campus, in which he

about to submit his Physics project as a prerequisite to graduation

practices. Daffon was convicted of homicide thru reckless

imprudence. The parents filed a civil action for damages under

Article 2180 of the Civil Code against the Colegio de San Jose

Recoletos, its high school principal, the dean of boys, the physics

teacher, Daffon and two other students, through their respective

parents. The complaints against the students was later dropped.

Upon appeal to CA, the decision was reversed and all the

defendants were completely absolved.

ISSUE: Whether or not the school should be held liable for the

acts of its students.

RULING: No. In the absence of a teacher- in charge, dean of boys

should probably be held liable considering that he had earlier

confiscated an unlicensed gun from a student and later returned

to him without taking disciplinary action or reporting the matter

to the higher authorities. Though it was clear negligence on his

part, no proof was shown to necessarily link this gun with the

shooting incident.

The responsibility of the school authorities over the student

continues even if the student should be doing nothing more than

relaxing in the campus in the company of his classmates and

friends. Under the Article 2180 of the Family Code, it is the

teacher-in charge is the one who is imposed on the liability of

his/her students and not the school. As long as defendant can

show that he had taken the necessary precautions to prevent the

injury complained of, he can exonerate himself from the liability

imposed by Art. 2180.

Air France v Carrascoso, 18 SCRA 155

Nature: Petition for Review by Certiorari of a decision of CA

FACTS: Rafael Carrascoso was one of the 28 Filipino pilgrims who

left Manila for Lourdes. He had a first class round tripticket from

Manila to ROME.However, when the plane was in Bangkok, the

Manager forced him to vacate his first class seat because a white

manhad a better right to the seat. Carrascoso filed complaint for

damages.

ISSUE: won damages may be recovered on the basis of expulsion

HELD: Yes

Ratio:The contract of air carriage generates a relation attended

with public duty. Passengers should be protectedand insured a

pleasant tripWrongful expulsion is a violation of public duty by the

air carrier – a quasi delict. Damages are proper.Doubt WON ticket

was confirmed as first class is immaterial as claim is based on the

wrongful expulsionitself.

De la Cruz v.s. Northern Theatrical Enterprises 95 Phil . 739

(1954)

CASE NO: L-7089

DATE: August 31, 1954

PETITIONER: Doming de la Cruz

RESPONDENT: Northern Theatrical Enterprises Inc., et. al.

FACTS: In 1941 the Northern Theatrical Enterprises Inc. operated

a movie house in Laoag, Ilocos Norte and employed a certain

Domingo de la Cruz as a special guard assigned at the main

entrance. In the afternoon of July 4, 1941, Benjamin Martin (gatecrasher) wanted to enter the movie house without a ticket but

refused by De la Cruz. The former (Martin) attacked De la Cruz

with a bolo. De la Cruz defended himself until he was cornered to

save his life he shot Martin, which caused Martin’s death. He was

charged of homicide (Criminal Case No. 8449) of the Court of First

Instance of Ilocos Norte, but was granted a motion to dismiss on

January 1943.

However, on July 8, 1947, he was again accused of homicide and

was acquitted of the charge. In both cases De la Cruz employed a

lawyer to defend himself. He demanded from Northern Theatrical

Enterprises and to its three board members to recover

reimbursement for Atty. Conrado Rubio’s fees as well as moral

damages, a total of Php 15,000.00. Northern asked for the

dismissal of the complaint. The CFI after rejecting the theory of De

la Cruz that he was an agent and such was entitled to

reimbursement of expenses incurred in connection with the

agency.

ISSUE:

Whether the relationship was that of principal and agent?

Whether or not De la Cruz is entitled for reimbursement?

HELD: NO. The Supreme Court held that the plaintiff was a mere

employee hired to perform a specific task or duty.

NO. In terms of his reimbursement, an employee who in the line

of duty may recover damages against his employer. However, the

damages incurred consisting of the payment of lawyer’s fee did

not flow directly from the performance of his duties.

Pelayo v. Lauron

FACTS: Petitioner Pelayo, a physician, rendered a medicalassistance during the child delivery of the daughter-in-law of the

defendants. The just and equitable value of services rendered by

him was P500.00 which the defendants refused to pay without

alleging any good reason. With this, the plaintiff prayed that the

judgment be entered in his favor as against the defendants for the

sum of P500.00 and costs.

The defendants denied all of the allegation of the plaintiff,

contending that their daughter-in-law had died in consequence of

the child-birth, and that when she was alive, she lived with her

husband independently and in a separate house, that on the day

she gave birth she was in the house of the defendants and herstay there was accidental and due to fortuitous circumstances.

ISSUE:Whether or not the defendants are obliged to pay thepetitioner for the medical assistance rendered to their daughter-

in-law.

HELD:According to Article 1089 of the Old Civil Code (now 1157),obligations are created by law, by contracts, by quasi-contracts,

by illicit acts and omissions or by those which any kind of fault or

negligence occurs. Obligations arising from law are not presumed.

Those expressly determined in the Code or in special law, etc., are

the only demandable ones.


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The rendering of medical assistance in case of illness is comprised

among the mutual obligations to which the spouses are bound by

way of mutual support as provided by the law or the Code.

Consequently, the obligation to pay the plaintiff for the medical

assistance rendered to the defendant’s daughter-in-law must be

couched on the husband.

In the case at bar, the obligation of the husband to furnish his

wife in the indispensable services of a physician at such critical

moments is especially established by the law and the compliance

therewith is unavoidable.

Virata v. Ochoa

81 SCRA 472

Torts and Damages – Double Recovery of Civil Liability

FACTS: In September 1975, Borilla was driving a jeep when he hit

ArsenioVirata thereby causing the latter’s death. The heirs of

Virata sued Borilla through an action for homicide through

reckless imprudence in the CFI of Rizal. Virata’s lawyer reserved

their right to file a separate civil action the he later withdrew said

motion. But in June 1976, pending the criminal case, the Viratasagain reserved their right to file a separate civil action. Borilla was

eventually acquitted as it was ruled that what happened was a

mere accident. The heirs of Virata then sued Borilla and Ochoa

(the owner of the jeep and employer of Borilla) for damages

based on quasi delict. Ochoa assailed the civil suit alleging that

Borilla was already acquitted and that the Virata’s were merely

trying to recover damages twice. The lower court agreed with

Ochoa and dismissed the civil suit.

ISSUE: Whether or not the heirs of Virata may file a separate civil

suit.

HELD: Yes. It is settled that in negligence cases the aggrieved

parties may choose between an action under the Revised Penal

Code or of quasi-delict under Article 2176 of the Civil Code of the

Philippines. What is prohibited by Article 2177 of the Civil Code of

the Philippines is to recover twice for the same negligent act.

Therefore, under the proposed Article 2177, acquittal from an

accusation of criminal negligence, whether on reasonable doubt

or not, shall not be a bar to a subsequent civil action, not for civil

liability arising from criminal negligence, but for damages due to a

quasi-delict or ‘culpa aquiliana’. But said article forestalls a double

recovery.


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The Roman Catholic Bishop Of Jaro vs. Gregorio De La PeñaG.R. No. L-6913 November 21, 1913

FACTS :

The plaintiff is the trustee of a charitable bequest made for the

construction of a leper hospital and that father Agustin de la Peña

was the duly authorized representative of the plaintiff to receive

the legacy. The defendant is the administrator of the estate ofFather De la Peña.

In the year 1898 the books Father De la Peña, as trustee, showed

that he had on hand as such trustee the sum of P6,641, collected

by him for the charitable purposes aforesaid. In the same year he

deposited in his personal account P19,000 in the Hongkong and

Shanghai Bank at Iloilo. Shortly thereafter and during the war of

the revolution, Father De la Peña was arrested by the military

authorities as a political prisoner, and while thus detained made

an order on said bank in favor of the United States Army officer

under whose charge he then was for the sum thus deposited in

said bank. The arrest of Father De la Peña and the confiscation of

the funds in the bank were the result of the claim of the military

authorities that he was an insurgent and that the funds thusdeposited had been collected by him for revolutionary purposes.

The money was taken from the bank by the military authorities by

virtue of such order, was confiscated and turned over to the

Government.

While there is considerable dispute in the case over the question

whether the P6,641 of trust funds was included in the P19,000

deposited as aforesaid, nevertheless, a careful examination of the

case leads us to the conclusion that said trust funds were a part of

the funds deposited and which were removed and confiscated by

the military authorities of the United States.

ISSUE :

Whether or not Father de la Peña is liable for the loss of the

money under his trust?

RULINGS :

The court, therefore, finds and declares that the money which is

the subject matter of this action was deposited by Father De la

Peña in the Hongkong and S hanghai Banking Corporation of Iloilo;

that said money was forcibly taken from the bank by the armed

forces of the United States during the war of the insurrection; and

that said Father De la Peña was not responsible for its loss.

Father De la Peña's liability is determined by those portions of the

Civil Code which relate to obligations. (Book 4, Title 1.)

Although the Civil Code states that "a person obliged to give

something is also bound to preserve it with the diligence

pertaining to a good father of a family" (art. 1094), it also

provides, following the principle of the Roman law, major casus

est, cui humana infirmitas resistere non potest , that "no one shall

be liable for events which could not be foreseen, or which having

been foreseen were inevitable, with the exception of the cases

expressly mentioned in the law or those in which the obligation so

declares." (Art. 1105.)

By placing the money in the bank and mixing it with his personal

funds De la Peña did not thereby assume an obligation different

from that under which he would have lain if such deposit had not

been made, nor did he thereby make himself liable to repay the

money at all hazards. If the had been forcibly taken from his

pocket or from his house by the military forces of one of the

combatants during a state of war, it is clear that under the

provisions of the Civil Code he would have been exempt from

responsibility. The fact that he placed the trust fund in the bank in

his personal account does not add to his responsibility. Such

deposit did not make him a debtor who must respond at all

hazards.

Cruzado v. Bustos

Facts:

Agapito Cruzado was a poor man living in Pampanga,

he had a job in court but was still not enough to support his

family. He aspired to hold the office of procurador in the CFI of

Pampanga but he was unable to give the required bond, an

indispensable condition for his appointment.

Since Cruzado was friends with Bustos, a rich woman in

their place. He begged the latter to simulate a mortgage deed of a

certain property and have it executed in court in his favor only topose that he has real p roperty to enable him to qualify to such

position of procurador. In truth, the said mortagage was a front

and fraudulent but was effected by making a pretended contract

which bore the appearance of truth.

It is unquestionable that the contract of sale was

perfect and binding upon both contracting parties since their

names both appear in that instrument to have agreed upon the

thing sold. But it is also undeniable that the said contract was not

consummated. 1.) Cruzado did not pay the purchase price of

P2,200 2.) he never took possession of the land apparently sold in

the said deed. All that the vendee did was to pledge the land as a

security for the faithful discharge of the duties of his office.

Santiago Cruzado, the son, brought an action for

recovery of possession, founded on the right transmitted to him

by his father at his death – a right arising from the said simulated

deed of sale of the land in question.

Issue:

W/N the said deed of sale was simulated, not with the

intent to defraud 3rd persons, but for the sole purpose

of making it appear that Agapito Cruzado has real

property?

W/N rights of transmission acquired by SantiagoCruzado from the death of his father, pertaining to the

said land in contest is valid and without defect?

Held:

Under the law, the contract of purchase and sale, as

consensual, is perfected by consent as to the price and

the thing and is consummated by the reciprocal

delivery of the one and the other. Full ownership of

the thing sold being conveyed to the vendee, from

which moment the right of action derived from this

right may be exercised. – the record discloses that

there was no payment made by Cruzado to Bustos,

thus, rendering the contract not to be consummated.

Art 1164 states that, a creditor has a right to the fruitsof the time the obligation to deliver it arise. However,

he shall not acquire a property right thereto until it has

been delivered to him.

Besides the failure to pay the purchase price, neither

the vendee nor his heirs, had at any time taken

possession of the land. Seven witnesses attest to the

fact, Bustos and her husband while still living,

continued to possess the said land supposedly sold to

Agapito Cruzado and cultivated it, as she had done

long before the sale of September 1875 to September

1891, the date of complaint by Santiago Cruzado.

Consequently, at the death of Agapito, he could not

have transmitted to the Santiago as his successor any

greater right than a personal right to exact fulfillmentof a contract, as plaintiff was not the owner of the said

land, he could not validly register it. This fulfillment of

a right has already prescribed since, under the law,

prescription towards real property shall be 30 years. In

the case at bar, the action to recover took 34 years to

bring it to court, thus has already prescribed.

Petition is denied.

Caleon v. Agus Development Corp.(G.R. No. 77365. April 7, 1992)

FACTS:

Agus Development Corporation leased to Rita Caleon its lot for

P180.00/month. Caleon built a 4-door apartment and sub-leased


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it at P350.00/door/month without Agus’ consent. Agus’ filed an

ejectment suit under Batas Pambansa (B.P.) Blg. 25 after Caleon

refused to vacate the lot. Caleon argued that B.P. Blg. 25 cannot

be applied because there is a perfected contract of lease without

any express prohibition on subleasing. The MTC ruled in favor of

Agus. It was appealed to the RTC but was dismissed outright.

Hence this petition for review.

ISSUE:

Whether or not B.P. Blg. 25 is unconstitutional for being violative

of “non-impairment clause” on the ground that it impaired thelease contract.

HELD:

No. B.P. Blg. 25 is valid and constitutional. The lease contract is

subordinate to the police power of the state. Petition is denied.

RATIO:

B.P. Blg. 25 is derived from P.D. No. 20 which has been declared

by the Supreme Court as police power legislation so that the

applicability thereof to existing contracts cannot be denied. The

constitutional guaranty of non-impairment of obligations of

contract is limited by and subject to the exercise of police power

of the state in the interest of public health, safety, morals and

general welfare. In spite of the constitutional prohibition, theState continues to possess authority to safeguard the vital

interests of its people. Legislation appropriate to safeguarding

said interest may modify or abrogate contracts already in effect.

Song Fo and Co., vs. Hawaiian-Philippine Co. [47 SCRA 821 G.R.

No. 23769. September 16, 1925]

Facts:

Hawaiian-Philippine Co. got into a contract with Song Fo & Co.

where it would deliver molasses to the latter.

Hawaiian-Philippine Co. was able to deliver 55,006 gallons of

molasses before the breach of contract.

SFC filed a complaint for breach of contract against Hawaiian-

Philippine Co. and asked P70,369.50. Hawaiian-Philippine Co.

answered that there was a delay in the payment from Song Fo &

Co. and that Hawaiian-Philippine Co. has the right to rescind the

contract due to that and claims it as a special defense.

The judgment of the trial court condemned Hawaiian-Philippine

Co. to pay Song Fo & Co. a total of P35,317.93, with legal interest

fromthe date of the presentation of the complaint, and with

costs.

Issue:

(1) Did Hawaiian-Philippine Co. agree to sell 400,000 gallons ofmolasses or 300,000 gallons of molasses?

(2) Had Hawaiian-Philippine Co. the right to rescind the

contract of sale made with Song Fo & Co.?

(3) On the basis first, of a contract for 300,000 gallons of

molasses, and second, of a contract imprudently breached by

Hawaiian-Philippine Co., what is the measure of damages?

Held:

(1) Only 300,000 gallons of molasses was agreed to by Hawaiian-

Philippine Co. as seen in the documents presented in court. Thelanguage used with reference to the additional 100,000 gallons

was not a definite promise.

(2) With reference to the second question, doubt has risen as to

when Song Fo & Co. was supposed to make the payments for the

delivery of molasses as shown in the documents presented by the

parties.

The Supreme Court said that Hawaiian-Philippine Co. does not

have the right to rescind the contract. It should be noted that the

time of payment stipulated for in the contract should be treated

as of the presence of the contract. There was only a slight breach

of contract when the payment was delayed for 20 days after

which Hawaiian-Philippine Co. accepted the payment of theoverdue accounts and continued with the contract, waiving its

right to rescind the contract. The delay in the payment of Song Fo

& Co. was not such a violation for the contract.

(3) With regard to the third question, the first cause of action of

Song Fo & Co. is based on the greater expense to which it was put

in being compelled to secure molasses from other sources to

whichSupreme Court ruled that P3,000 should be paid by

Hawaiian-Philippine Co. with legal interest from October 2, 1923

until payment.

The second cause of action was based on the lost profits on

account of the breach of contract. Supreme Court said that Song

Fo & Co. is not entitled to recover anything under the second

cause of action because the testimony of Mr. Song Heng will

follow the same line of thought as that of the trial court which in

unsustainable and there was no means for the court to find out

what items make up the P14,000 of alleged lost profits.

Velarde, et.al. vs. CA [361 SCRA 56 GR No. 108346. July 11, 2001]

Facts:

David Raymundo (private respondent) is the absolute and

registered owner of a parcel of land, located at 1918 Kamias St.,

Dasmariñas Village Makati, together with the house and other

improvements, which was under lease. It was negotiated by

David’s father with plaintiffs Avelina and Mariano Ve larde

(petitioners). ADeed of Sale with Assumption of Mortgage was

executed in favor of the plaintiffs. Part of the consideration of the

sale was the vendee’s assumption to pay the mortgage

obligations of the property sold in the amount of P 1,800,000.00

in favor of the Bank of the Philippine Islands. And while their

application for the assumption of the mortgage obligations is not

yet approved by the mortgagee bank, they have agreed to pay the

mortgage obligations on the property with the bank in the

name of Mr. David Raymundo. It was further stated that “in the

event Velardes violate any of the terms and conditions of the said

Deed of Real Estate Mortgage, they agree that the downpayment

P800,000.00, plus all the payments made with the BPI on the

mortgage loan, shall be forfeited in Favor of Mr. Raymundo, asand by way of liquidated damages, w/out necessity of notice or

any judicial declaration to that effect, and Mr. Raymundo shall

resume total and complete ownership and possession of the

property, and the same shall be deemed automatically cancelled”,

signed by the Velardes.

Pursuant to said agreements, plaintiffs paid BPI the monthly

interest loan for three months but stopped in paying the

mortgage when informed that their application for the

assumption of mortgage was not approved.

The defendants through a counsel, wrote plaintiffs informing the

latter that their non-payment to the mortgagee bank constituted

non-performance of their obligation and the cancellation and

rescission of the intended sale. And after two days, the plaintiffsresponded and advised the vendor that he is willing to pay

provided that Mr. Raymundo: (1) delivers actual possession of the

property to them not later than January 15, 1987 for their

occupancy (2) causes the release of title and mortgage from the

BPI and make the title available and free from any liens and

encumbrances (3) executes an absolute deed of sale in their favor

free from any liens and encumbrances not later than Jan. 21,

1987.

The RTC of Makati dismissed the complaint of the petitioners

against Mr. Raymundo for specific performance, nullity of

cancellation, writ of possession and damages. However, their

Motion for Reconsideration was granted and the Court instructed

petitioners to pay the balance of P 1.8 million to private

respondent who, in turn were ordered to execute a deed of

absolute sale and to surrender possession of the disputed

property to petitioners.

Upon the appeal of the private respondent to the CA, the court

upheld the earlier decision of the RTC regarding the validity of the

rescission made by private respondents.

Issue:

Whether the rescission of contract made by the private

respondent is valid.

Held:

There is a breach of contract because the petitioners did not

merely stopped paying the mortgage obligations but they also

http://coffeeafficionado.blogspot.com/2012/03/song-fo-and-co-vs-hawaiian-philippine.htmlhttp://coffeeafficionado.blogspot.com/2012/03/song-fo-and-co-vs-hawaiian-philippine.htmlhttp://coffeeafficionado.blogspot.com/2012/03/velarde-etal-vs-ca-361-scra-56-gr-no.htmlhttp://coffeeafficionado.blogspot.com/2012/03/velarde-etal-vs-ca-361-scra-56-gr-no.htmlhttp://coffeeafficionado.blogspot.com/2012/03/song-fo-and-co-vs-hawaiian-philippine.htmlhttp://coffeeafficionado.blogspot.com/2012/03/song-fo-and-co-vs-hawaiian-philippine.html


7/21


failed to pay the balance purchase price. Their conditional offer to

Mr. Raymundo cannot take the place of actual payment as would

discharge the obligation of the buyer under contract of sale.

Mr. Raymundo’s source of right to rescind the contract is Art.

1191 of the Civil Code predicated on a breach of faith by the other

party who violates the reciprocity between them. Moreover, the

new obligations as preconditions to the performance of the

petitioners’ own obligation were repudiation of

an existing obligation, which was legally due and demandable

under the contract of sale.

The breach committed by the petitioners was the non-performance of a reciprocal obligation. The mutual restitution is

required to bring back the parties to their original situation prior

to the inception of the contract. The initial payment and

the mortgage payments advanced by petitioners should be

returned by private respondents, lest the latter unjustly enriched

at the expense of the other. Rescission creates the obligation to

return the obligation of contract. To rescind, is to declare a

contract void at its inception and to put an end to it as though it

never was.

The decision of the CA is affirmed with modification that private

respondents are ordered to return to petitioners, the amount

they have received in advanced payment.


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CATHAY PACIFIC AIRWAYS LTDvs. SPOUSES DANIEL VASQUEZ

and MARIA LUISA MADRIGAL VASQUEZ[G.R. No. 150843. March

14, 2003]

FACTS:

In respondents’ return flight to Manila from Hongkong, they were

deprived of their original seats in Business Class with their

companions because of overbooking. Since respondents were

privileged members, their seats were upgraded to First Class.Respondents refused but eventually persuaded to accept it. Upon

return to Manila, they demanded that they be indemnified in the

amount of P1million for the “humiliation and embarrassment”

caused by its employees. Petitioner’s Country Manager failed to

respond. Respondents instituted action for damages. The RTC

ruled in favor of respondents. The Court of Appeals affirmed the

RTC decision with modification in the award of damages.

ISSUE/s

1. WON Cathay breached its contract of carriage

with the Vs when it upgraded their seat

accommodation.2. WON the upgrading was made in bad faith or with

fraud.

3. WON the Vasquezes are entitled to damages.

RULING

1. YES. The Vazquezes never denied that they were

members of Cathay’s Marco Polo Club. They knew that

as members of the Club, they had priority for

upgrading of their seat accommodation at no extra

cost when an opportunity arises. But, just like other

privileges, such priority could be waived. The

Vazquezes should have been consulted first whether

they wanted to avail themselves of the privilege or

would consent to a change of seat accommodation

before their seat assignments were given to other

passengers. Normally, one would appreciate and

accept an upgrading, for it would mean a better

accommodation. But, whatever their reason was and

however odd it might be, the Vazquezes had every

right to decline the upgrade and insist on the Business

Class accommodation they had booked for and which

was designated in their boarding passes. They clearly

waived their priority or preference when they asked

that other passengers be given the upgrade. It should

not have been imposed on them over their vehement

objection. By insisting on the upgrade, Cathay

breached its contract of carriage with the Vazquezes.

2. NO. The Vazquezes were not induced to agree to

the upgrading through insidious words or deceitful

machination or through willful concealment of

material facts. Upon boarding, Ms. Chiu told the

Vazquezes that their accommodations were upgraded

to First Class in view of their being Gold Card members

of Cathay’s Marco Polo Club. She was honest in telling

them that their seats were already given to other

passengers and the Business Class Section was fully

booked. Ms. Chiu might have failed to consider the

remedy of offering the First Class seats to other

passengers. But, we find no bad faith in her failure to

do so, even if that amounted to an exercise of poor

judgment. Neither was the transfer of the

Vazquezeseffected for some evil or devious purpose.

As testified to by Mr. Robson, the First Class Section isbetter than the Business Class Section in terms of

comfort, quality of food, and service from the cabin

crew.

3. YES. Case law establishes the following requisites

for the award of moral damages: (1) there must be an

injury clearly sustained by the claimant, whether

physical, mental or psychological; (2) there must be a

culpable act or omission factually established; (3) the

wrongful act or omission of the defendant is the

proximate cause of the injury sustained by the

claimant; and (4) the award for damages is predicated

on any of the cases stated in Article 2219 of the Civil

Code.

Moral damages predicated upon a breach of contract

of carriage may only be recoverable in instances where

the carrier is guilty of fraud or bad faith or where the

mishap resulted in the death of a passenger. Where in

breaching the contract of carriage the airline is not

shown to have acted fraudulently or in bad faith,

liability for damages is limited to the natural and

probable consequences of the breach of the obligation

which the parties had foreseen or could have

reasonably foreseen. In such a case the liability does

not include moral and exemplary damages. The breach

of contract of carriage, which consisted in the

involuntary upgrading of the Vazquezes’ seat

accommodation, was not attended by fraud or bad

faith. The Court of Appeals’ award of moral damages

has, therefore, no leg to stand on.

The deletion of the award for exemplary damages by

the Court of Appeals is correct. It is a requisite in the

grant of exemplary damages that the act of the

offender must be accompanied by bad faith or done in

wanton, fraudulent or malevolent manner. Such

requisite is absent in this case. Moreover, to be

entitled thereto the claimant must first establish his

right to moral, temperate, or compensatory damages.

Since the Vazquezes are not entitled to any of these

damages, the award for exemplary damages has no

legal basis. And where the awards for moral and

exemplary damages are eliminated, so must the award

for attorney’s fees.

The most that can be adjudged in favor of theVazquezes for Cathay’s breach of contract is an award

for nominal damages under Article 2221 of the Civil

Code, which reads as follows:

Article 2221. Nominal damages are adjudicated in

order that a right of the plaintiff, which has been

violated or invaded by the defendant, may be

vindicated or recognized, and not for the purpose of

indemnifying the plaintiff for any loss suffered by him.

H. O'LEARYvs. MACONDRAY and CO., INC

FACTS:

It is alleged that on January 30, 1920, the plaintiff, who is a

resident of Manila, and the defendant, a domestic corporation,

made the following agreement:

"MACONDRAY & CO.

"Manila, P. I.

"Through G. H. Hayward.


9/21


SIRS: Appertaining to the residence to be

erected for your firm in Pasay, for which I

have been requested by G. H. Hayward to

submit a proposition, I have the honor to

state that I have examined the plans and

site and would undertake the work and

complete the building in accordance with

the plans and instructions, and under the

supervision of the said architect for the

amount of the actual cost plus twelve and

one-half per cent (12 ½%).

Payments to be made monthly on

statements supported by vouchers,

approved and certified to by the architect.

It is understood that time is an important

provision, and with due consideration

therefor materials suitable for the work are

to be purchased in such quantities and at

such times as may appear to be to your best

interest.

Very respectfully,

(Sgd.) "H. O'LEARY

Accepted for and on behalf of Macondray&

Co.

By (Sgd.) "CARLOS YOUNG"

That plaintiff commenced the construction of the building under

the supervision of the architect, and continued the work thereon

until near its completion, and kept and performed all the terms

and provisions of the contract by him to be kept and performed,

and that pursuant to such agreement he paid out for labor and

materials the sum of P20,287.03, which was the actual cost; and

that the defendant is indebted to him in the further sum of

P2,535.83, being 12 ½ per cent of the actual cost of such labor

and materials, and for and on account of his services and

superintendence of the building, and he prays judgment for

P22,822.86, with interest from the filing of the complaint and

costs.

In its second amended answer, after admitting the making of the

contract and the formal all allegations of the complaint, the

defendant denies all other material allegations, and, as a special

defense, alleges that, through plaintiff's negligence in the

construction of the building and the purchase of materials, the

defendant was damaged in the sum of P32,624.25, as specified in

seven different counterclaims. It is then alleged that the plaintiff

was indebted to the Luneta Motor Company in the sum of

P702.49, and to the Insular Lumber Company in the sum

P9,766.23, both of which claims are assigned to the defendant,

and it prays judgment against the plaintiff for the total of all of

such claims amounting to P43,092.97.

The parties entered into a stipulation as to certain exhibits, and

upon such issues, the trial court rendered judgment in favor of

the plaintiff for P12,201.99, with legal interest from the filing ofthe complaint and costs, from which the defendant appeals,

contending that the court erred in allowing interest from the filing

of the complaint, and in its computation and as to the duplicated

item of the Tuason&Sampedro bill, in refusing to receive evidence

of the rental value of the house, in failing to make special findings

of fact, and in failing to find that the delay caused in the

completion of the house was caused by plaintiff's negligence, in

finding for the plaintiff on defendant's second counterclaim for

damages in the sum of P797, in finding for the plaintiff on

defendant's third counterclaim for damages in the sum of

P5,440.11, and in finding for the plaintiff on defendant's fourth

counterclaim for damages in the sum of P13,407.25, the amount

of the alleged increase in the cost of labor caused by plaintiff's

negligence.

Plaintiff's cause of action is founded upon the contract above

quoted, the making of which defendant admits. By its express

terms, plaintiff says that he "would undertake the work and

complete the building in accordance with the plans and

instructions, and under the supervision of the said architect for

the amount of the actual cost plus twelve and one-half per cent

(12 ½%)." Payments are to be made on monthly statements

accompanied by vouchers to be approved and certified by the

architect. It then recites:

It is understood that time is an important provision,

and with due consideration therefor materials suitablefor the work are to be purchased in such quantities

and at such times as may appear to be to your best

interest.

To say the least, the contract was very loosely drawn. No date is

specified in which the building is to be completed, and time is not

made the essence of the contract. It is true that the materials

were to be purchased in such quantities and at such times as may

appear to be to the defendant's interest.

The defense is founded upon the theory that the labor was not

furnished and that the materials were not purchased for its best

interest. There is no claim or pretense of fraud, or that the

plaintiff was dishonest. In its final analysis, defendant's

counterclaims are founded upon plaintiff's mistakes and errors of

judgment in the employment of labor and the purchase of

materials.

Assuming that there were mistakes and errors of judgment only,

the plaintiff would not be liable for them under the contract. The

fact that the price of lumber or of labor went up or down, or was

cheaper at a certain time, would not make the plaintiff liable for a

breach of contract, so long as he was exercising his best judgment

and acting in good faith.

It will be noted that the materials were to be purchased "in such

quantities and at such times as may appear to be to your best

interest." That vested in the plaintiff a discretionary power as to

the time and manner for the purchase of materials, for which he

would not be liable for honest mistakes or errors of judgment.

The same thing is true as to the employment of labor. It is true

that the contract recites "that time is an important provision." But

it does not say when the building is to be completed, or that time

is of the essence of the contract. In other words, under the terms

of the contract, the employment of labor, the purchase of

materials and the completion and construction of the building

were all matters which were largely left to the discretion of the

plaintiff, for which he would not be liable for honest mistakes or

errors of judgment.

Pending the trial the judge of the lower court made a personal

inspection of the building and of the labor and materials used in

its construction, and upon a ll of such questions, we agree with the

trial court.

Although this action is founded upon contract, the amount of

plaintiff's claim was vigorously disputed. In fact the defendant

claimed judgment against the plaintiff for a much larger amount.

Upon such a state of facts, and under recent decisions of this

court, plaintiff is only entitled to interest from the date of the

judgment, and defendant's first assignment of error must besustained. It also appears that a clerical error was made in

computing 12 1/2 per cent on P1,772.14, and that the amount

which should be deducted was P221.52 and not P22.15, as found

by the trial court. Correcting this error, the amount of plaintiff's

judgment should be P12,002.63.

The judgment of the lower court will be modified, and instead of

P12,201.00, the amount of plaintiff's judgment will be P12,002.63,

which will draw interest at the rate of 6 per cent per annum from

the first day of August, 1923, the date of the judgment in the

lower court. In all other respects, the judgment is affirmed, with

costs in favor of the appellant in this court. So ordered.


10/21


GUTIERREZ v. GUTIERREZ

Facts:

A passenger truck (bus) and a private automobile collided. Narciso

Gutierrez, a passenger of the bus, seeks to recover damages in the

amount of P10, 000, for physical injuries suffered as a result of an

automobile accident

Truck: driven by the chauffeur Abelardo Velasco, and was ownedby Saturnino Cortez.

Private automobile:

operated by Bonifacio Gutierrez, a lad 18 years of age,and was owned by Bonifacio's father and mother, Mr.and Mrs. Manuel Gutierrez

The father was not in the car at the time of the

accident, but the mother as well as other members of

the family where accomodated therein.

Issue: Who is liable for the injuries suffered by NarcisoGutierrez?

Held: Manuel Gutiererez (father of the kid who drovethe car), and Abelardo Velasco (driver of the bus), and

Saturnino Cortez (owner of the bus) are JOINTLY and

SEVERALLY liable.

Ratio:

Liability of father

Article 1903 of the Civil Code: the father alone and not the minor

or the mother, would be liable for the damages caused by theminor

US jurisprudence shows that “the head of a house, the owner ofan automobile, who maintains it for the general use of his family

is liable for its negligent operation by one of his children.”

The running of the machine by a child to carry other members of

the family is within the scope of the owner's business, so that he

is liable for the negligence of the child because of the relationship

of master and servant.

Liability of the truck owner and driver

The liability of the truck owner and the driver is based from

contract.

VAZQUEZ VS. BORJA

Antonio Vasquez, petitioner, vs. Francisco de Borja, respondent

Francisco de Borja, petitioner,vs. Antonio Vasquez, respondent

Ponente: Ozaeta, J.

Facts:

The action was commenced by de Borja against Vasquez and

Fernando Busuego to recover from them jointly and severally the

total of PhP 4702.70 upon three alleged causes:

First, Vasquez and defendants jointly and severally obligated

themselves to sell to the plaintiff 4,000 cavans of palay, which

they will deliver. Vasquez and Busuego, after receiving 8,400

pesos from de Borja, only delivered 5,224 pesos worth of cavans

of palay. They refused to deliver the remaining cavans amounting

to 3,175.20 pesos.

Second, de Borja suffered damages as a result of the refusal to

deliver

Third, on account of the agreement mentioned, de Borja

delivered 4000 empty sacks but only 2,490 were returned to the

plaintiff. 1,510 sacks were refused to deliver. There are also

damages for the non-delivery of the empty sacks.

Vasquez denies that he entered into the contract mentioned in his

own and personal capacity. He said that the agreement for the

purchase of the cavans of palay and the payment of the price of

8,400 were made by de Borja not with him but with Natividad-

Vasquez Sabani Development Co. Inc. (NVSDCI), a corporationorganized and existing under the laws of the Philippines. Vasquez

was the acting manager when the transaction took place. On

account of the filing of this action against him, he filed a

counterclaim of 1,000 pesos for damages.

Vasquez was ordered by the trial court to pay de Borja the sum of

P3,175.20 plus P377.50. The said court absolved Busuego, the

corporations’ treasurer, from paying the said sums. Said amount

was reduced by the Court of Appeals. The case was then

remanded to the court of origin for further proceedings upon

Vasquez’s motion for reconsideration. Vasquez filed a petition for

certiorari for the review and reverse of the CA judgement. De

Borja also filed a cross-petition for certiorari to maintain the

original CA judgement.

The trial court found Vasquez guilty of negligence in the

performance of the contract and held him personally liable on

that account. Likewise, CA ruled that he was not only negligent

but should also responsible for paying the amount of the demand

under Arts. 1102, 1103 and 1902 of the Civil Code.

Issues:

1. Whether the plaintiff entered into the contract with

the defendant Antonio Vasquez in his personal

capacity or as manager of the Natividad-Vasquez

Sabani Development Co., Inc.

2. Whether the trial court and/or the Court of Appeals

erred in its rulings.

3. Whether Vasquez could claim damages against Borja.

Held/ Ratio:

1. Vasquez entered the contract in his capacity as acting president

and manager of NVSDCI.

The action being on a contact, with the NCSDCM being the party

liable on the contract, the complaint should have been dismissed.

A corporation is an artificial being invested by law with its own

personality, which is distinct and separate from its stockholders or

the people who run its affairs. Even if the agents are the one

acting for the corporation, it does not make the agent personally

liable for entering a contract in behalf of the corporation. The

corporation’s personality, a legal fiction, may only be disregarded

if the agent used the corporation to hide an unlawful or

fraudulent purpose.

There is no legal basis upon which to hold Vasquez liable on the

contract either principally or subsidiarily. There are no allegations

that Vasquez personally

benefited through the contract that he entered for the

corporation. It was also not contended that he entered into the

contract for the corporation in bad faith and with intent to

defraud the plaintiff.

2. Both the trial court and CA erred in their ruling that Vasquez is

guilty of negligence and must be personally liable. Since it was the

corporation’s contract, the corporation is the one liable and not


11/21


the agent even if the non-fulfilment of the contract is due to

negligence or fault or any other cause.

Vasquez could be principally liable under article 1902 of the Civil

Code if independent of the contract, he caused damage to the

plaintiff by his fault or negligence. The basis of such separate

liability should be on culpa aquiliana and not based on the

contract. But since there was no such cause of action in this

complaint, the trial court has no jurisdiction over that issue.

3. No. As the acting president and manager of the corporation, he

has a moral duty towards the part with whom he contracted in

said capacaity to see to it that the corporation he represents

fulfilled the contract by delivering the palay it had sold. Since he

was not able to fulfill that moral duty, he has no legitimate cause

for his claim of damages.

Dissenting Opinion (Paras, J.):

Vasquez should be made liable to de Borja. As acting president

and manager of NCSDCM, Vasquez has full knowledge of the

insolvent status of his company but still agreed to sell to de Borja

4000 cavans of palay. The failure and refusal to deliver the

undelivered cavans resulted from his negligence.

DE GUIA VS. MANILA ELECTRIC RAILROAD & LIGHT COMPANY

Manuel De Guia, plaintiff, v. Manila Electric Railroad & Light

Company, defendant Ponente: Street, J.

Summary:

The plaintiff got injured after he boarded a car (which I think in

this case refers to one of the old trains) which got derailed and hit

a post. Because the motorman who was driving the car was held

to be negligent, it was also held that the company was also liablefor damages. The relationship between the parties was

contractual in nature and thus the company was bound to deliver

the plaintiff safely and securely with reference to the degree of

care which, under the circumstances, is required by law and

custom applicable to the case.

Facts:

De Guia boarded the car (of a train) and he remained at the back

platform holding the right-hand door. The wheels of the rear car,

after coming out of a switch, got derailed and it ran for a short

distance until it struck a concrete

post. The post was shattered and the De Guia was thrown against

the door with some violence, receiving bruises and possibly

certain internal injuries.

The company of the car alleged that the derailment was due to

the presence of a stone in the juncture of the switch which had

accidentally been lodged there. Thus in this view, the derailment

would have been due to casus fortuitous and not chargeable to

the negligence of the motorman.

Issue: WON the motorman and the company were liable fordamages to the injured plaintiff

Held: Yes. The motorman had been negligent and it results thatthe company is liable for damage resulting to the plaintiff as a

consequence of that negligence.

Richard Beltran

Ratio:

As regards the motorman’s negligence: The inference that there

had been negligence in the operation of the car could be gleanedfrom the distance which the car was allowed to run with the front

wheels of the rear truck derailed. An experienced and attentive

motorman should have discovered that something was wrong and

would have stopped before he had driven the car over the entire

distance from the point the wheels left the track to the place

where the post was struck.

As regard the company’s liability: Because the motorman was

negligent, it also results that the company was liable for the

damage to the plaintiff as a consequence of that negligence. The

plaintiff had boarded the car as a passenger b ound for Manila and

the company undertook

to convey him for hire. The contractual nature of the relation

between the parties meant that the duty of the carrier was to

convey and deliver the plaintiff safely and securely with reference

to the degree of care which under the circumstances, was

required by law and custom applicable to the case. Upon failure

to comply with that obligation, the company incurred liability. The

liability already incurred, the company could not avail itself of the

defense that it had exercised due care in selecting and instructing

the motorman because such defense could only be availed in the

absence of a contractual relation, or in other words to quasi-

delicts.


12/21


US v. Barias

Facts:

On November 2, 1911, defendant Segundo Barias, a motorman

for the Manila Electric Railroad and Light Company, was driving

his car along Rizal Avenue and stopped at an intersection to take

on some passengers. He looked backward, presumably to be sure

that all passengers were aboard, and then started the car. At that

moment, Fermina Jose, a 3-year old child, walked or ran in frontof the car. She was knocked down and dragged at some distance

to death. Defendant knew nothing of this until his return, when

he was informed of what happened. He was charged and found

guilty of homicide resulting from reckless negligence.

Issue:

Whether the evidence shows such carelessness or want of

ordinary care on the part of the defendant as to amount to

reckless negligence

Held:

Negligence is want of the care required by the circumstances. It is

a relative or comparative, not an absolute, term and its

application depends upon the situation of the parties and the

degree of care and vigilance which the circumstances reasonably

require. Where the danger is great, a high degree of care is

necessary, and the failure to observe it is a want of ordinary care

under the circumstances.

The evidence shows that the thoroughfare on which the incident

occurred was a public street in a densely populated section of the

city. The hour was six in the morning, or about the time when the

residents of such streets begin to move about. Under such

conditions a motorman of an electric street car was clearly

charged with a high degree of diligence in the performance of his

duties. He was bound to know and to recognize that any

negligence on his part in observing the track over which he was

running his car might result in fatal accidents. He had no right to

assume that the track before his car was clear. It was his duty to

satisfy himself of that fact by keeping a sharp lookout, and to do

everything in his power to avoid the danger which is necessarily

incident to the operation of heavy street cars on public

thoroughfares in populous sections of the city. At times, it might

be highly proper and prudent for h im to glance back before again

setting his car in motion, to satisfy himself that he understood

correctly a signal to go forward or that all the passengers had

safely alighted or gotten on board. But we do insist that before

setting his car again in motion, it was his duty to satisfy himself

that the track was clear, and, for that purpose, to look and to see

the track just in front of his car. This the defendant did not do,

and the result of his negligence was the death of the child.

We hold that the reasons of public policy which impose upon

street car companies and their employees the duty of exercising

the utmost degree of diligence in securing the safety ofpassengers, apply with equal force to the duty of avoiding the

infliction of injuries upon pedestrians and others on the public

streets and thoroughfares over which these companies are

authorized to run their cars. And while, in a criminal case, the

courts will require proof of the guilt of the company or its

employees beyond a reasonable doubt, nevertheless the care or

diligence required of the company and its employees is the same

in both cases, and the only question to be determined is whether

the proofs shows beyond a reasonable doubt that the failure to

exercise such care or diligence was the cause of the accident, and

that the defendant was guilty thereof.

Standing erect, at the position he would ordinarily assume while

the car is in motion, the eye of the average motorman might just

miss seeing the top of the head of a child, about three years old,

standing or walking close up to the front of the car. But it is also

very evident that by inclining the head and shoulders forward very

slightly, and glancing in front of the car, a person in the position of

a motorman could not fail to see a child on the track immediately

in front of his car; and we hold that it is the manifest duty of a

motorman, who is about to start his car on a public thoroughfare

in a thickly-settled district, to satisfy himself that the track is clear

immediately in front of his car, and to incline his body slightly

forward, if that be necessary, in order to bring the whole track

within his line of vision. Of course, this may not be, and usually isnot necessary when the car is in motion, but we think that it is

required by the dictates of the most ordinary prudence in starting

from a standstill.

Sarmiento v Sun-Cabrido (Torts)

SARMIENTO V SUN-CABRIDO (2003)

[G.R. No. 141258. April 9, 2003]

TOMASA SARMIENTO, petitioner, vs. SPS. LUIS & ROSE SUN-

CABRIDO and MARIA LOURDES SUN, respondents.

FACTS:

Petitioner, Tomasa Sarmiento, states that sometime in April 1994,

a friend, Dra. Virginia Lao, requested her to find somebody to

reset a pair of diamond earrings into two gold rings. Accordingly,

petitioner sent a certain TitaPayag with the pair of earrings to

Dingding’s Jewelry Shop, owned and managed by respondent

spouses Luis and Rose Cabrido, which accepted the job order for

P400.

Petitioner provided 12 grams of gold to be used in crafting the

pair of ring settings. After 3 days, TitaPayag delivered to the

jewelry shop one of Dra. Lao’s diamond earrings which was earlier

appraised as worth .33 carat and almost perfect in cut and

clarity.Respondent Ma. Lourdes (Marilou) Sun went on to

dismount the diamond from its original setting. Unsuccessful, she

asked their goldsmith, Zenon Santos, to do it. Santos removed the

diamond by twisting the setting with a pair of pliers, breaking the

gem in the process.

Petitioner required the respondents to replace the diamond with

the same size and quality. When they refused, the petitioner was

forced to buy a replacement in the amount of P30,000.

Petitioner filed a complaint for damages on June 28, 1994.

private respondents vigorously denied any transaction between

Dingdings’ Jewelry Shop and the petitioner, through TitaPayag.

DECISION OF LOWER COURTS:1. MTC: declared respondents liable.

2. RTC: absolving the respondents of any responsibility arising

from breach of contract. while ostensibly admitting the existence

of the said agreement, private respondents, nonetheless denied

assuming any obligation to dismount the diamonds from their

original settings.

3. CA: declared the private respondents not liable for damages.

ARGUMENTS OF THE PARTIES:

Respondents

- dismounting of the diamond from its original setting was part of

the obligation assumed by the private respondents under the


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contract of service.

Petitioners

- agreement was for crafting two gold rings mounted with

diamonds only and did not include the dismounting of the said

diamonds from their original setting.

ISSUE:

Whether respondents are liable

RULING:Yes.

it is beyond doubt that Santos acted negligently in dismounting

the diamond from its original setting. It appears to be the practice

of

PART 1: OVERLAND TRANSPORTATION CHAPTER 1: GENERAL

CONCEPTSI. Concept of COMMON CARRIER1.1

Definition1)Crisostomovs Court of Appeals

FACTS

: A travel agency is not an entity engaged in the business of

transporting either passengers or goods and is therefore, neither

a private nor a common carrier. Respondent did not undertake to

transport petitioner from one place to another since its covenant

with its customers is simply to make travel

arrangements in their behalf. Respondent’s services as

a travel agency include procuring tickets and facilitating travel

permits or visas as well as booking customers for tours. It is in this

sense that the contract between the parties in this case was an

ordinary one for services and not one of carriage.Petitioner EstelaL. Crisostomo contracted the services of respondent Caravan

Travel and ToursInternational, Inc. to arrange and facilitate her

booking, ticketing, and accommodation in a tour

dubbed “Jewels of Europe”. A 5% discount on the total

cost of P74,322.70 which included the airfare was given to the

petitioner. The booking fee was also

waived because petitioner’s niece, MeriamMenor,was

respondent’s ticketing manager.

On June 12, 1991, Menor went to her aunt’s residence to deliver

petitioner’s travel documents and plane tickets. In return,

petitioner gave the full payment forthe package tour. Menor then

told her to be at theNAIA on Saturday, June 15, 1991, two hours

before herflight on board British Airways. Without checking

hertravel documents, petitioner went to NAIA and to herd is may,

she discovered that the flight she wassupposed to take had

already departed the previousday. She learned that her plane

ticket was for the flight scheduled on June 14, 1991. She called up

Menortocomplain and Menor suggested upon petitioner totakeanother tour

–

“British Pageant”. Petitioner was asked

anew to pay US$785.00. Petitioner gave respondentUS$300 as

partial payment and commenced the trip.

ISSUE:

Whether or not respondent Caravan did notobserve the standard

of care required of a commoncarrier when it informed the

petitioner wrongly of theflight schedule.

HELD:

The petition was denied for lack of merit. The decision of the

Court of Appeals was affirmed.A common carrier is defined under

Article 1732 of theCivil Code as persons, corporations, firms

orassociations engaged in the business of carrying ortransporting

passengers or goods or both, by land,water or air, for

compensation, affecting their servicesto the public. It is obvious

from the above definitionthat respondent is not an entity

engaged in thebusiness of transporting either passengers or

goodsand is therefore, neither a p rivate nor a commoncarrier.

Respondent did not undertake to transportpetitioner from one

place to another since its covenantwith its customers is simply to

make travel

arrangements in their behalf. Respondent’s services as

a travel agency include procuring tickets andfacilitating travel

permits or visas as well as bookingcustomers for tours. It is in this

sense that the contractbetween the parties in this case was an

ordinary onefor services and not one of carriage.The standard of

care required of respondent is that of a good father of a family

under Article 1173 of the CivilCode. This connotes reasonable care

consistent withthat which an ordinarily prudent person would

have observed when confronted with a similar situation. It is clear

that respondent performed its prestationunderthe contract as

well as everything else that wasessential to book petitioner for

the tour. Hadpetitioner exercised due diligence in the conduct of

her affairs, there would have been no reason for her tomiss the

flight. Needless to say, after the travel paperswere delivered to

petitioners, it became incumbentupon her to take ordinary careof her concerns. Thisundoubtedly would require that she at least

read thedocuments in order to assure herself of the

importantdetails regarding the trip.

Rodzssen Supply Co. Inc. vs. Far East Bank & Trust Co. (357

SCRA 618)

14 Jan

FACTS:

Petitioner opened with respondent a domestic letter of credit

(LOC) in favor of Ekman and Company, Inc. (Ekman) for the

purchase of five hydraulic loaders. The first three hydraulic

loaders were received by the petitioner before the expiry of LOC

and respondent paid Ekman. The remaining two hydraulic loaders

were received by the petitioner after the expiry of LOC/contract

but respondent still paid Ekman. Petitioner refused to pay

respondent. Respondent filed a case. Petitioner answered by way

of affirmative defense that respondent had no cause of action

being allegedly in bad faith and breach of contract. The trial court

and Court of Appeals ruled in favor of respondent to recover from

the cost of two hydraulic loaders.

ISSUE:

Whether or not the respondent is entitled of reimbursement from

petitioner for its payment out of mutual negligence.

RULING:


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YES. Petitioner should pay respondent bank the amount the latter

expended for the equipment belatedly delivered by Ekman and

voluntarily received and kept by petitioner. Respondent bank’s

right to seek recovery from petitioner is anchored, not upon the

inefficacious Letter of Credit, but on Article 2142 of the Civil Code

which reads: “Certain lawful, voluntary and unilateral acts give

rise to the juridical relation of quasi-contract to the end that no

one shall be unjustly enriched or benefited at the expense of

another.” When both parties to a transaction are mutually

negligent in the performance of their obligations, the fault of onecancels the negligence of the other and, as in this case, their rights

and obligations may be determined equitably under the law

proscribing unjust enrichment.

81 SCRA 472 Virata

Torts and Damages – Double Recovery of Civil Liability

In September 1975, Borilla was driving a jeep when he hit

ArsenioVirata thereby causing the latter’s death. The heirs of

Virata sued Borilla through an action for homicide through

reckless imprudence in the CFI of Rizal. Virata’s lawyer reserved

their right to file a separate civil action the he later withdrew said

motion. But in June 1976, pending the criminal case, the Viratas

again reserved their right to file a separate civil action. Borilla was

eventually acquitted as it was ruled that what happened was a

mere accident. The heirs of Virata then sued Borilla and Ochoa

(the owner of the jeep and employer of Borilla) for damages

based on quasi delict. Ochoa assailed the civil suit alleging that

Borilla was already acquitted and that the Virata’s were merely

trying to recover damages twice. The lower court agreed withOchoa and dismissed the civil suit.

ISSUE: Whether or not the heirs of Virata may file a separate civil

suit.

HELD: Yes. It is settled that in negligence cases the aggrieved

parties may choose between an action under the Revised Penal

Code or of quasi-delict under Article 2176 of the Civil Code of the

Philippines. What is prohibited by Article 2177 of the Civil Code of

the Philippines is to recover twice for the same negligent act.

Therefore, under the proposed Article 2177, acquittal from an

accusation of criminal negligence, whether on reasonable doubt

or not, shall not be a ba r to a subsequent civil action, not for civil

liability arising from criminal negligence, but for damages due to a

quasi-delict or ‘culpa aquiliana’. But said article forestalls a double

recovery.


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CLAUDINA VDA. DE VILLARUEL, ET AL. VS.

MANILA MOTOR CO., INC.

104 PHIL. 926

FACTS:

On May 31, 1940, the plaintiffs Villaruel and

defendant Manila Motor Co. Inc. entered into a contract

whereby the defendant agreed to lease plaintiffs building

premises.

On October 31, 1940, the leased premises were placed in

the possession of the defendant until the invasion of 1941.

The Japanese military occupied and used the property

leased as part of their quarters from June, 1942 to March,

1945, in which no payment of rentals were made. Upon the

liberation of the said city, the American forces occupied the same

buildings that were vacated by the Japanese.

When the United States gave up the occupancy of the

premises, defendant decided to exercise their option to

renew the contract, in which they agreed. However, before

resuming the collection of rentals, Dr. Alfredo Villaruel upon

advice demanded payment of rentals corresponding to the time

the Japanese military occupied the leased premises, but the

defendant refused to pay. As a result plaintiff gave notice seeking

the rescission of the contract and the payment of rentals from

June, 1942 to March, 1945; this was rejected by the defendant.

Despite the fact the defendant under new branch manager paid

to plaintiff the sum of P350 for the rent, the plaintiff still

demanded for rents in arrears and for the rescission of the

contract of lease. The plaintiff commenced an action before the

CFC of Neg. Occidental against defendant company. During the

pendency of the case, the leased building was burned down.Because of the occurrence, plaintiffs demanded reimbursement

from the defendants, but having been refused, they filed a

supplemental complaint to include a 3rd cause of action, the

recovery of the value of the burned building. The trial court

rendered judgment in favour of the plaintiff. Hence the

defendants appeal.

ISSUE:

Is Manila Motor Co. Inc. liable for the loss of the leased premises?

RULING:

No. Clearly, the lessor's insistence upon collecting

the occupation rentals for 1942-1945 was unwarranted in

law. Hence, their refusal to accept the current rentals

without qualification placed them in default (mora

creditoris or accipiendi) with the result that thereafter,

they had to bear all supervening risks of accidental injury

or destruction of the leased premises. While not expressly

declared by the Code of 1889, this result is clearly inferable from

the nature and effects of mora.

In other words, the only effect of the failure to

consign the rentals in court was that the obligation to paythem subsisted and the lessee remained liable for the

amount of the unpaid contract rent, corresponding to the

period from July to November, 1946; it being undisputed

that, from December 1946 up to March 2, 1948, when the

commercial buildings were burned, the defendants appellants

have paid the contract rentals at the rate of

P350 per month. But the failure to consign did not

eradicate the default (mora) of the lessors nor the risk of

loss that lay upon them.

Central Bank of the Philippines v. CA ( 1985)

Ponente: Makasiar, C.J.Topic: Delay (Art. 1169)

Facts:April 28, 1965 - Island Savings Bank (ISB) approved the loan

application for P80,000 of Sulpicio Tolentino, who, asa security for

the loan, also executed a real estate mortgage over his 100-ha

land. The approved loan application called for P80,000 loan,

repayable in semi-annual instalments for a period of 3 years, with

12% interest .May 22, 1965 – a mere P17,000 partial release of

the loan was made by ISB, and Tolentino and his wife Edita signed

a promissory note for P17,000 at 12% annual interest, payable

within 3 years from the date of execution of the contract at semi-

annual instalments of P3,459.An advance interest for the P80,000

loan covering a6-mo period amounting to P4,800was deducted

from the partial release of P17,000, but this was refunded

to Tolentino on July 23, 1965, after being informed by ISB thatthere wasno fund yet available for the release of the P63,000

balance. Aug. 13, 1965 – the Monetary Board of the Central Bank

issued Resolution No. 1049, which prohibited ISB from making

new loans and investments, after finding that it was suffering

liquidity problems. June 14, 1968 – the Monetary Board issued

Resolution No. 967, which prohibited ISB from doing business in

the Philippines, after finding that it failed to put up the required

capital to restore its solvency. Aug. 1, 1968 – ISB, in view of non-

payment of theP17,000 covered by the promissory note, filed an

application for the extra-judicial foreclosure of the real estate

mortgage covering the 100-ha land; and the sheriff scheduled

auction. Tolentino filed a petition with the CFI for injunction,

specific performance or rescission and damages with preliminary

injunction, alleging that since ISB failed to deliver the P63,000

remaining balance of the loan, he is entitled to specific

performance by ordering ISB to deliver it with interest of 12% per

annum from April 28, 1965, and if said balance cannot be

delivered, to rescind the real estate mortgage.CFI issued a TRO

enjoining ISB from continuing with the foreclosure of the

mortgage, however, after finding Tolentino’s petition

unmeritorious, ordered the latter to pay ISB P17,000 plus legal

interest and legal charges and lifting the TRO so the sheriff may

proceed with the foreclosure.CA, on appeal by Tolentino,

modified CFI’s decision by affirming dismissal of Tolentino’s

petition for specific performance, but ruled that ISB can neitherforeclose the mortgage nor collect the P17,000 loan.SC: The

par ties, in the P80,000 loan agreement, undertook reciprocal

obligations, wherein the obligati

digest for oblicon

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