3D 2009 Torts Digest

3D 2009-2010 TORTS DIGESTS
TORTS & DAMAGES

Atty. Howard Calleja
Digested by:
IIID 2009-2010
Beadle: Jan Porter; Compilers: Diane Lipana, Chrissie Moral, Cheska Respicio, and Tel Virtudez
3D 2009-2010 DIGESTS – TORTS & DAMAGES
TABLE of C ONTENTS
I. INTRODUCTION 30 Citytrust Banking Corp. vs. IAC and Emme Herrero………. 33
1. Classes of Torts 31 Metrobank vs. CA …………………………………………. 34
2. Damage and Damages: Distinction 32 Far East Bank and Trust Company vs. Querimit…………… 35
3. Culpa Aquiliana/Contractual/ Criminal : Distinction 33 Reyes vs. CA……………………………………………….. 36
1 BLTB & Armando Pon vs. IAC ……………………………. 1 34 Adzuara vs. CA ……………………………………………. 37
2 Aboitiz vs. CA ……………………………………………… 2 35 Bayne Adjuster and Surveyor Inc v CA, …………………… 38
3 Dangwa Transport vs. CA. ………………………………….. 3 36 Samson, Jr. vs. BPI ………………………………………... 39
4 Atienza vs. COMELEC …………………………………….. 4 37 UCPB v. Teofilo C. Ramos ………………………………... 40
5 People vs. Bayotas ………………………………………….. 5 38 FEBTC vs. Marquez ………………………………………. 41
6 Elcano vs. Hill ……………………………………………… 6 39 Cusi v. PNR………………………………………………... 42
7 DMPI Employees vs. Velez Metal-NAFLU ………………... 7 40 Gan vs. CA ………………………………………………... 43
8 Padilla et. al. vs. CA ………………………………………… 8 41 Valenzuela vs. CA………………………………………….. 44
9 Philippine Rabbit Bus Lines, Inc. vs. People ……………….. 9 42 Prudential Bank v. CA …………………………………….. 45
10 Manliclic vs. Calaunan……………………………………… 12 2. Negligence as the Poximate Cause
11 Air France vs. Carascoso and CA…………………………... 13 43 Subido vs. Custodio………………………………………... 46
12 LRTA vs. Navidad…………………………………………. 14 44 Ridjo Tape and Chemical Corp. v. CA …………………….. 47
13 Far East Bank and Trust Co. vs. CA ………………………. 15 45 Raynera v. Hiceta ………………………………………….. 48
14 Natividad vs. Andamo Emmanuel R. Andamo vs IAC…….. 16 46 Ermitaño VS CA …………………………………………... 49
15 Castro vs. People ………………………………………….. 17 47 BPI Express Card Corporation v Olalia …………………… 50
16 Fabre vs. CA ………………………………………………. 18 48 Benguet Electric Cooperative, Inc vs. CA, ………………… 51
17 Calalas vs. CA……………………………………………… 19 49 St. Mary’s Academy vs Carpitanos …………………………. 52
18 Padua and Padua vs. Robles and Bay Taxi Cab……………. 21 50 Adriano vs. Pangilinan ……………………………………... 53
19 Atlantic Gulf and Pacific Company of Manila Inc. vs. CA … 22 51 Vda. De Bataclan v. Mariano Medina ……………………... 54
52 Umali v. Bacani ……………………………………………. 55
II. QUASI-DELICT 53 Bacarro v Castaño …………………………………………. 56
1. Elements 54 Phoenix Construction v IAC ………………………………. 57
20 Vergara vs. CA …………………………………………….. 23 55 Smith Bell and Company v CA …………………………….. 58
21 Natividad vs. Andamo Emmanuel R. Andamo vs. IAC…….. 24 56 Fernando v CA ……………………………………………. 59
22 FGU Insurance vs. CA …………………………………….. 25 57 Austria vs. CA ……………………………………………... 60
23 Equitable Leasing Corp vs. Lucita Suyom et al …………….. 26 58 Consolidated Bank vs CA………………………………….. 61
24 Cinco vs. Canonoy ………………………………………… 27 59 Philippine National Railway vs. CA ………………………... 62
2. No Double Recovery Rule 3. Proof of Negligence
25 Virata vs. Ochoa …………………………………………... 28 60 PLDT vs. CA ……………………………………………… 63
26 Jarantilla vs. CA …………………………………………… 29 61 Food Terminal Inc. vs. CA and Basic Foods……………….. 64
27 Atlantic Gulf vs. CA ……………………………………… 30 62 German Marine Agencies, Inc. vs. NLRC …………………. 65
28 Cancio Jr. v. Isip …………………………………………... 31 63 Tan vs. Northwest Airlines ………………………………... 66
64 Collin Morris v CA, Scandinavian Airlines System (SAS) ….. 67
III. NEGLIGENCE 65 Crisostomo vs. CA ………………………………………... 68
1. Concept of Negligence 4. Presumption of Negligence
29 Picart vs. Smith ……………………………………………. 32 a) Res Ipsa Loquitur 69
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66 Africa vs. Caltex, Boquiren and the CA ……………………. 70 104 Gan vs. CA ……………………………………………… 116
67 F.F. Cruz vs. CA …………………………………………... 71 105 Estacion vs. Bernardo ……………………………………. 117
68 Ma-ao Sugar Central Co., Inc. vs CA ……………………… 72 106 Cadiente vs. Macas ……………………………………….. 118
69 Batiquin vs. CA ……………………………………………. 73 107 NPC v Heirs of Casionan ………………………………… 119
70 Reyes s.v Sisters of Mercy Hospital………………………... 74 b) Assumption of Risk
71 Ramos v CA [122999] ……………………………………... 75 108 Afialda v. Hisole ………………………………………….. 120
72 Ramos v CA [041102] ……………………………………... 77 109 Ong vs. Metropolitan Water District ……………………... 121
73 DMCI vs. Court of Appeal ………………………………... 78 110 Co. v. CA ………………………………………………… 122
74 Perla Compania Inc vs. Spouses Sarangaya ………………... 80 111 Erquiaga v CA ……………………………………………. 123
75 Macalinao v. Ong ………………………………………….. 82 c) Last Clear Chance 124
76 Capili v. Spouses Cadana …………………...……………… 84 112 Picart vs. Smith …………………………………………... 125
77 Cantre v. Spouses Go ……………………………………... 85 113 Bustamante v. CA ………………………………………... 126
b) Respondent Superior 114 George Mckee and Araceli Koh Mckee vs. IAC ………….. 127
78 City of Manila vs. IAC …………………………………….. 86 115 PBCom v. CA ……………………………………………. 128
79 Viron Transportation Co. v. Santos ………………………... 87 116 Canlas vs. CA …………………………………………….. 129
80 Calalas vs. CA …………………………………………….... 88 117 Ong vs. Metropolitan Water District ……………………... 130
81 Pestano v. Sumayang ………………………………………. 89 118 Anuran, et al. vs. Buno, et. Al …………………………….. 131
82 Ramos v CA ……………………………………………….. 90 119 Phoenix Construction v IAC ……………………………... 132
83 Ramos vs. CA …………………………………………….. 92 120 Glan People’s Lumber and Hardware vs NLRC ………….. 133
84 Castilex vs. Vasquez ……………………………………….. 93 121 Pantranco North Express, Inc vs Baesa …………………... 134
85 Nogales vs. Capitol Medical Center ………………………... 94 122 LBC Air Inc, et al v CA, et al ……………………………... 135
86 Professional Services vs. Natividad ………………………... 96 123 Raynera v. Hiceta ………………………………………… 136
c) Violation of Traffic Rules 124 LADECO vs. Angala …………………………………….. 137
87 Mallari Sr. and Jr. v. CA and Bulletin Publishing Corp……... 98 125 Austria v. CA ……………………………………………... 138
88 BLTB v. IAC ……………………………………………... 99 126 Consolidated Bank and Trust Corp. v. CA ……………….. 139
89 Manuel vs. CA ……………………………………………... 100 d) Prescription
90 Aguilar vs. Commercial Savings Bank ……………………... 101 127 Capuno vs. Pepsi-Cola …………………………………… 140
91 US vs. Crame ……………………………………………… 102 128 Virgilio Callanta vs. Carnation Philippines Inc……………. 141
92 SPS Caedo v. Yu Khe Thai ………………………………... 103 129 Allied Bank vs. CA ……………………………………….. 142
93 FGU Insurance vs. CA ……………………………………. 104 130 Arsenio Delos Reyes et al. v. CA …………………………. 143
d) Common Carrier 131 Ferrer vs. Ericta …………………………………………... 144
94 DSR-Senator Lines vs. Federal Phoenix Assurance Co., Inc... 105 132 Kramer, Jr. vs. CA ………………………………………... 145
95 Delsan Transport Lines Inc. v C&A Construction ………… 106 e) Fortuitous Event
96 Singapore Airlines vs. Fernandez …………………………... 107 133 Bayacen vs. CA..…………………………………………... 146
e) Dangerous Weapon & Substances 134 NAPOCOR v. CA (1992)..………………………………... 147
97 Smith Bell and Company v CA …………………………….. 108 135 NAPOCOR vs. CA……………………………………….. 148
5. Defenses 136 Philippine Airlines Inc. vs CA…………………………….. 149
a) Contributory Negligence 137 Cipriano vs. CA………………………………………….... 150
98 Rakes v. Atlantic, Gulf and Pacific Co…………………….... 109 138 Yobido vs. CA……………………………………………. 151
99 Taylor vs. Manila Electric…………………………………... 110 139 Japan Airlines vs. CA…………………………………….... 153
100 Phoenix Construction v IAC ……………………………... 112 140 Gotesco Investment Corporation vs. Chatto……………… 155
101 LBC AIR CARGO vs. CA ……………………………….. 113 f) Diligence
102 Jarco Marketing Corp vs. CA and Aguilars ……………….. 114 141 Walter Smith Co. v. Cadwallader Gibson Lumber Co……... 156
103 Illusorio vs. CA…………………………………………… 115 142 Ong vs. Metropolitan Water District ........................................ 157
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143 Fabre V. CA………………………………………………. 158 179 Delsan Transport Lines Inc. v C&A Construction………... 196
144 PBCom v. CA…………………………………………….. 159 180 Cerezo vs. Tuazon………………………………………... 197
145 Reyes v. CA………………………………………………. 160 181 Yambao vs. Zuniga………………………………………... 198
146 Crisostomo vs. CA………………………………………... 161 182 Spouses Hernandez v Dolor………………………………. 199
g) Mistake and Waiver 183 Ernesto Martin vs. CA and MERALCO…………………... 200
147 Spouses Theis v CA………………………………………. 162 184 Filamer Christian Institute vs. CA and Kapunan…………... 201
148 Gatchalian vs. Delim……………………………………… 163 185 Filamer Christian Institute vs. IAC………………………... 202
149 Phil Carpet vs. PMC………………………………………. 164 186 Metro Manila Transit Corp v CA ………………………… 203
150 Dapor v. Biascan………………………………………….. 165 187 Valenzuela vs. CA………………………………………… 205
h) Others 188 Filipinas Broadcasting Network Inc. vs. AMEC-BCCM…... 206
151 Sison vs. David…………………………………………… 166 189 Estacion v. Bernardo……………………………………... 208
152 Malit v. People of the Philippines and Judge Ofilada……… 167 190 Mercury Drug vs. Spouses Huang………………………… 209
153 Proline vs. CA…………………………………………….. 168 d) State
154 Amonoy vs. Gutierrez…………………………………….. 169 191 Merrit vs. Government of the Philippine Islands………….. 210
155 Rogelio Mariscal vs. CA…………………………………... 170 192 Mendoza v. De Leon…………………………………….... 211
156. Sycip (BP 22 case, not included in digests) 193 Fontanilla vs. Maliaman………………………………….... 212
157 Spouses Lim v Uni Tan Marketing………………………... 171 e) Teachers/Heads of Establishments
158 Ramos v CA………………………………………………. 172 194 Palisoc vs. Brillantes………………………………………. 214
195 Amadoras vs. CA…………………………………………. 215
IV. VICARIOUS LIABILITY/PRIMARY/SOLIDARY LIABILITY 196 Salvosa vs. IAC…………………………………………… 216
1. Vicarious Liability 197 Phil. School of Business Administration v CA…………….. 217
a) Parents and Guardians 198 Mercado vs. CA……………………...……………………. 218
159 Cuadra v. Monfort……………………………………….... 173 199 Ylarde v Aquino…………………………………………... 219
160 Elcano vs. Hill…………………………………………….. 174 200 Joseph Saladuga vs. Far Eastern University……………….. 220
161 Libi vs. IAC……………………………………………….. 175 2. Primary Liability
162 Exconde vs. Capuno……………………………………… 176 a) Possessors/Users of Aminals
163 Salen vs. Balce…………………………………………….. 177 201 Afialda v. Hisole…………………………………………... 221
164 Canlas v Chan Lin Po, Remedios Diala, and LimKoo…….. 178 202 Vestil vs. IAC…………………………………………….. 222
b) Owners and Managers of Enterprises b) Owners of Motor Vehicles
165 Tamargo vs. CA…………………………………………... 179 203 Chapman vs. Underwood…………………………………. 223
166 Heirs of Delos Santos vs. CA…………………………….. 180 204 First Malayan Leasing v CA……………………………….. 224
167 St. Francis High School vs. CA…………………………… 181 205 Manlangit vs. Urgel………………………………………... 225
168 Go vs. Intermediate Appellate Court…………………….... 183 206 FGU Insurance vs. CA……………………………………. 226
169 PSBA v. CA………………………………………………. 185 207 Aguilar vs. Commercial Savings Bank…………………….. 227
170 Jose V. CA………………………………………………... 186 208 Caedo vs. Yu Khe Thai…………………………………… 228
171 Castilex vs. Vasquez………………………………………. 187 209 Malayan Insurance vs CA…………………………………. 229
c) Employers c) Manufacturers & Processors
172 Franco vs. IAC……………………………………………. 188 d) Municipal Corporations
173 China Airlines vs. CA……………………………………... 189 210 University of Manila vs. IAC……………………………… 231
174 Go vs. Intermediate Appellate Court…………….………... 190 211 Bernardino Jimenez vs City of Manila…………………….. 232
175 Soliman vs. Tuazon……………………………………….. 192 212 Guilatco vs. City of Dagupan……………………………... 233
176 Castilex v. Vazquez………………………………………... 193 213 Torio vs. Fontanilla……………………………………….. 234
177 Jose V. CA………………………………………………... 194 214 Municipality of San Juan vs. CA…………………………... 235
178 Victory Liner vs. Heirs of Malecdan………………………. 195 e) Building Proprietors
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215 De Roy vs. CA……………………………………………. 236 252 PADCOM vs. Ortigas Center……………………………... 277
216 Gotesco Investment Corporation vs. Chatto……………… 237 253 David Reyes v Jose Lim…………………………………... 278
f) Engineers/Architects/Contractors 254 UP vs. Philab Industries, Inc. …………………………….. 279
217 Juan F. Nakpil & Sons vs. CA……………………………. 238 255 H.L. Carlos v. Marina Properties Inc……………………… 280
218 Juan F. Nakpil, et al. vs. CA………………………………. 240 4. Judicial Vigilance
g) Solidary Liability 256 People vs. Baylon…………………………………………. 281
219 Gelisan vs. Alday………………………………………….. 241 257 Clarita Cruz vs. NLRC……………………………………. 282
220 Cruz vs. vs. NLRC………………………………………... 242 5. Thoughtless Extravagance
221 Singapore Airlines Limited vs. CA………………………… 243 6. Right to Privacy
222 De Guzman vs. NLRC……………………………………. 244 258 St Louis Realty vs CA and Aramil………………………… 283
223 GSIS v. CA……………………………………………….. 255 259 Castro Vs. People of the Philippines……………………… 284
224 Basilio vs. Bersamira……………………………………… 246 7. Disrespect for Person
260 Tenchavez vs. Ecano……………………………………... 285
V. SPECIAL TORTS 261 Concepcion vs. CA and Sps. Nicolas……………………… 286
1. Abuse of Right 262 Navarrete vs. CA………………………………………….. 287
225 Velayo, etc. vs Shell Co., of the Philippines, et al. ….............. 247 263 Marquez vs. Desierto…………………………………….... 288
226 Filinvest Credit Corporation v. CA………………………... 248 8. Dereliction of Duty
227 De Guzman vs. NLRC……………………………………. 249 264 Zulueta v. Nicolas………………………………………… 290
228 UE Vs. Jader……………………………………………… 250 265 Javellana V. Tayo………………………………………….. 291
229 Sea Commercial vs. CA…………………………………… 252 266 Phimco vs. City of Cebu…………………………………... 292
230 Andrade v CA…………………………………………….. 253 267 Torio vs. Fontanilla……………………………………….. 293
231 HSBC vs. Catalan…………………………………………. 254 9. Unfair Competition
232 NAPOCOR vs. CA……………………………………….. 255 268 Spinner v. Hesslein Corporation…………………………... 294
233 Carpio v. Valmonte……………………………………….. 256 269 Manila Oriental Sawmill Co. vs. NLRC…………………… 295
234 D.M. Wenceslao et al..vs. Readycon Trading……………… 257 270 Habana v. Robles…………………………………………. 296
235 Llorente v Sandiganbayan…………………………………. 258 10. Violation of Civil/Political Right
236 Heirs of Purisima Nala vs Artemio Cabansag……………... 260 271 Lim vs. Ponce De Leon………………………………….... 297
2. Contrary to Law and Morals 272 Rama vs. CA……………………………………………… 298
237 Hermosisima vs. CA……………………………………… 261 273 Aberca vs. Ver…………………………………………….. 299
238 Gashem Shookat Baksh vs. CA and Marilou Gonzales……. 262 274 MHP Garments, Inc vs. CA………………………………. 300
239 Ponce vs. Legaspi…………………………………………. 263 275 Obra v CA………………………………………………... 301
240 Medel vs. CA…………………………………………….... 264 276 German v. Barangan……………………………………… 302
241 Perez vs. CA……………………………………………… 265 277 Habana v. Robles…………………………………………. 304
242 Investors Finance Corporation vs. Autoworld…………….. 267 278 Vinzons-Chato vs. Fortune Tobacco (2007)………………. 305
243 Silvestre vs. Ramos………………………………………... 268 279 Vinzons-Chato vs. Fortune Tobacco (2008)………………. 306
244 Wassmer vs. Velez………………………………………... 269
245 Gashem Shookat Baksh vs. CA and Marilou Gonzales……. 270 VI. INTERFERENCE IN CONTRACTUAL RELATION
3. Unjust Enrichment 280 Gilchrist vs. Cuddy………………………………………... 309
246 Pecson vs. CA…………………………………………….. 271 281 Daywalt v. Corporacion De Los Padres Agustinos Recoletos…... 310
247 Security Bank and Trust Company vs. CA………………… 272 282 People’s Bank vs. Dahican Lumber……………………….. 312
248 Spouses Theis v CA………………………………………. 273 283 Rubio vs. CA…………………………………………….... 313
249 Valarao v CA…………………………………………….... 274 284 Laforteza vs Machuca……………………………………... 314
250 Grepalife vs. CA…………………………………………... 275 285 So Ping Bun vs. CA………………………………………. 315
251 EPG Construction et al v. Vigilar ………………………… 276 286 Lagon vs. CA and Lapuz………………………………….. 317
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a) Concepts and Requisites

VII. CIVIL LIABILIY ARISING FROM CRIME 320 Bantoto v. Bobis…………………………………………... 355
1. Remedies 321 Dionisio Carpio v. Doroja………………………………… 356
a) Civil Action with Criminal Action 322 Yonaha Vs. CA…………………………………………… 357
287 People of the Philippines v. Relova……………………….. 318 323 Basilio vs CA……………………………………………... 358
288 Manuel vs. Alfeche, Jr…………………………………….. 319 324 Catacutan vs. Kadusale et. al…………………………….. 359
289 Reyes Trucking vs. People………………………………… 320 325 International Flavors and Fragrances (Phil.), Inc. vs. Argos.. 360
290 Bebiano M. Banez vs. Valdevilla…………………………... 322 b) Diligence is not a Defense
291 DMPI Employees vs. Velez Metal………………………… 323 326 Arambulo vs. Manila Electric Co………………………….. 361
292 Replum (Neplum, Inc.) vs. Obreso………………………... 324 327 Yumul vs. Juliano and Pampanga Bus Co…………………. 362
293 Hambon vs. CA…………………………………………... 326 328 Connel Bros. vs. Aduna…………………………………... 363
b) Separate Civil Action
294 Cojuangco, Jr. v. CA……………………………………… 327 VII DAMAGES
295 Sarmiento Jr vs. CA………………………………………. 328 1. Concepts/Kinds of Damages
c) Independent Civil Action 329 Nakpil vs CA……………………………………………... 365
296 Carandang vs.. Santiago…………………………………… 329 330 Filinvest Credit vs. IAC…………………………………… 366
297 Lontoc vs. MD Transit & Taxi Co………………………... 330 331 Occena vs. Icamina……………………………………….. 367
298 Andamo vs IAC…………………………………………... 331 332 So Ping Bun vs. CA……………………………………….. 368
299 Cancio Jr. vs Isip………………………………………… 332 333 Spouses Custodio vs. CA…………………………………. 369
2. Effects 2. General Principle of Recovery
a) Acquittal 334 Air France v. CA………………………………………….. 371
300 Padilla et al. vs. CA………………………………………... 333 335 Ateneo De Manila University vs. CA……………………… 372
301 Maximo v.Gerochi ……………………………………….. 334 336 PAL V. Miano…………………………………………….. 373
302 Mansion Bicuit Co. vs. CA………………………………... 335 337 DBP v. CA………………………………………………... 374
303 Heirs of Guaring vs. CA…………………………………... 337 338 People v Roland Paraiso…………………………………... 375
304 Cruz vs. CA (and Umali)………………………………….. 338 3. Actual Damages
305 Sapiera vs. CA…………………………………………….. 339 339 Victory Liner vs. Heirs of Malecdan………………………. 376
306 Manantan vs. CA…………………………………………. 340 340 Refractories Copr vs. IAC………………………………… 377
b) Extinction of Civil Liability 341 David v. CA………………………………………………. 378
307 Castillo vs. CA…………………………………………….. 341 342 PNOC Shipping and Transport Corporation vs. CA……… 379
308 Bunag, Jr. vs. CA………………………………………….. 342 343 Bank of America vs. American Realty Corp………………. 380
309 People of the Philippines v. Relova……………………….. 343 344 BPI v. Leobrera………………………………………….... 381
310 Llorente v Sandiganbayan…………………………………. 344 345 Talisay-Silay Milling Co. vs. Associacion de Agricultores….. 382
311 People vs. Corpuz………………………………………… 346 346 G.A. Machineries, Inc. vs. Yaptinchay…………………….. 384
3. Prejudicial Question 347 China Airlines Limited vs. CA…………………………….. 385
312 Falgui vs. Provincial Fiscal………………………………... 347 348 Consolidated Dairy Products Co. vs. CA………………….. 386
313 Isabelo Apa et al vs. Fernandez………………………….. 348 a) Damnum Emergens / Lucrum Cessans
314 Beltran vs. People………………………………………… 349 349 People v. Degoma………………………………………… 388
315 Mercado vs. Tan…………………………………………... 350 350 Hualam Construction and Dev’t Corp. v. CA……………... 389
316 Marbella-Bobis v. Bobis…………………………………... 351 351 Araos et. al. vs. CA (and Jovan Land, Inc.)………………... 390
317 First Producers Holding Corporation v. Luis Co………….. 352 352 Asuncion vs. Evangelista………………………………….. 391
318 Torres vs. Gatchalian……………………………………... 353 353 Woodchild Holdings v. Roxas Electric & Construction…... 392
319 People vs. Consing……………………………………….. 354 b) Disability/Commercial Credit
4. Sunsidiary Liability 354 GSIS v. CA……………………………………………….. 393
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355 PNB vs. Pujol…………………………………………….. 394 392 PAL vs. CA and Sps. Miranda……………………………. 436
c) Fixed Indemnity 393 Antonino vs. Valencia…………………………………… 438
356 Fortune Express Inc vs CA (and Caorong)………………... 396 394 Spouses Eng v. PanAm…………………………………... 439
357 People v. Balgos…………………………………………... 397 395 Erlinda Francisco v. Ricardo Ferrer, Jr. et al……………… 440
358 People vs. Quilatan ………………………………………. 398 396 Prudential Bank v. CA……………………………………. 442
359 People v Willy Marquez………………………..…………. 399 397 Cathay v. Spouses Vasquez………………………………... 443
d) Loss of Earning Capacity c) Malicious Prosecution
360 Pedro Davila vs PAL…………………………………….... 400 398 Lao vs. CA (1991)………………………………………... 444
361 People vs. Quilatan………………………………………... 401 399 Lao vs. CA (1997)………………………………………... 445
362 People v.Jerez……………………………………………... 402 400 Lehner vs.. Martires v. Ricardo…………………………… 446
363 Rosales vs. CA and MMTC……………………………….. 403 401 Yasoña vs. De Ramos……………………………...……... 447
364 People vs. Mendoza………………………………………. 404 d) Labor Cases
365 People vs. Dubria…………………………………………. 405 402 Audion Electric Co., Inc. v NLRC………………………... 448
e) Interest 403 NEECO vs NLRC ………………………………………. 449
366 Reformina vs. Tomol……………………………………... 406 404 Rutaquio vs. NLRC…....…………………………………. 450
367 Easter Shipping vs. CA and Mercantile Insurance……….... 408 405 Paguio vs. PLDT…………………………………………. 451
368 Atlantic Gulf and Pacific Co. of Manila, Inc. vs. CA…….... 409 406 Globe Telecom, Inc. vs. Florendo-Flores………………… 452
369 Medel vs. CA……………………………………………... 410 407 UST vs. CA………………………………………………. 453
370 David vs. CA……………………………………………... 411 e) Corporation
371 Ruiz vs. CA………………………………………………. 412 408 Hemedes vs. CA………………………………………….. 454
372 Cuaton v. Salud…………………………………………... 413 409 Development Bank of the Philippines vs. CA…………….. 456
373 Commonwealth Insurance Corp vs. CA………………….. 414 5. Nominal Damages
374 DBP V. Perez…………………………………………….. 415 410 PAL vs. CA………………………………………………. 457
375 Landl & Company vs. Metrobank……………………….... 416 411 Better Buildings , Inc. vs. NLRC…………………………. 458
376 Crismina Garments Inc.vs. CA…………………………… 417 412 Japan Airlines vs. CA…………………………………….. 459
f) Death and Permanent Incapacity 413 Cojuangco vs. CA……………………………………….... 461
377 Manzanares v. Moreta……………………………………. 418 414 BPI Investment Corporation v. CA………………………. 462
378 Borromeo vs. Manila Electric Railroad & Light Co. ……... 419 415 Almeda vs. Carino ………………………………………. 463
379 Villa Rey Transit, Inc v. CA………………………………. 420 416 Northwest Airlines vs. Cuenca…………………………… 464
380 Salvador vs. People of the Philippines……………………. 421 417 Armovit vs CA…………………………………………… 465
4. Moral Damages 418 Cathay v. Spouses Vasquez………………………………... 466
a) Amount of Award 6. Temeperate Damages
381 Lopez vs PANAM………………………………………... 422 419 Precillano Necesito, Etc. vs. Natividad Paras, Et Al……… 467
382 Zamboanga Transit. et al. vs. CA…………………………. 423 420 Pleno vs. CA……………………………………………... 468
383 Asia Pacific Chartering vs. Farolan……………………….. 424 421 Consolidated Plywood Industries vs. CA………………… 469
384 Samson, Jr. vs. BPI……………………………………….. 425 422 Metrobank vs. CA ……………………………………….. 470
385 Erlinda Francisco v. Ricardo Ferrer, Jr., et al……………... 426 423 People v. Lopez…………………………………………... 471
386 Zalamea vs. CA…………………………………………... 428 424 BPI vs ALS Management………………………………… 472
387 People vs. Senen Prades………………………………….. 430 425 NPC vs CA……………………………………………… 473
388 Expertravel vs. CA……………………………………….. 431 7. Liquidated Damages
b) Bad Faith/Fraud/Malice 426 Jison v. CA………………………………………………... 474
389 Air France vs. Carascoso and CA………………………… 432 427 Country Bankers Insurance Association vs. CA…………... 475
390 Tiongson v Fernandez……………………………………. 433 428 Pacific Mills v. CA……………………………………...…. 477
391 Zalamea vs. CA…………………………………………... 434 429 RCBC vs. CA ……………………………………………. 478
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430 Ligutan vs. CA…………………………………………… 479 467 Ayala Corporations vs. Honorable Madayag………………. 519
431 Arwood v. DM Consunji………………………………… 480 468 General v. Claravall……………………………………….. 520
432 State Investment House Inc. v CA ………………………. 481 469 Original Development and Construction v. CA………….... 521
8. Exemplary Damages 470 Phil. Pryce Assurance Corp. vs. CA and Gegroco, Inc…….. 522
433 NAWASA vs. Judge Catolico ……………………………. 482 471 Kaw vs. Anunciacion…………………………………….... 523
434 Octot vs. Ybanez…………………………………………. 483 472 Manuel vs. Alfeche, Jr…………………………………….. 524
435 Patricio v. Leviste………………………………………… 484 473 Alday v. FGU Insurance Corp…………………………….. 525
436 Philippine Airlines v. CA………………………………….. 485 474 Go v. Tong………………………………………………... 526
437 Industrial Insurance vs. Bondad………………………….. 486 475 Planters Products vs. Fertiphil Corp………………………. 527
438 People vs. Albior…………………………………………. 487 476 La Sallette College vs. Pilotin……………………………... 528
439 Traders Royal Bank v. Radio Philippines Network, Inc…... 488
440 Singapore Airlines v. Fernandez…………………………... 489
441 NPC vs CA……………………………………………… 490
442 De Leon v CA……………………………………………. 491
443 People v. Cristobal……………………………………….. 493
9. Attorney’s Fees
444 PNB vs. Utility Assurance………………………………... 494
445 Del Rosario vs. CA……………………………………….. 495
446 Bodiongan vs. CA and Simeon…………………………… 496
447 Pimentel vs. CA…………………………………………... 497
448 Ibaan Rural Bank vs. CA…………………………………. 498
449 Compania Maritima Inc. vs. CA……………….………….. 499
450 Almeda vs. Carino………………………………………… 500
451 Concept Placement Resources, Inc. vs. Funk……………... 501
452 Cortes vs. CA…………………………………………….. 503
453 Smith Kline Beckman vs. CA…………………………….. 504
454 Reyes vs. CA……………………………………………... 505
10. Mitigation of Damages
455 Malaysian Airline System Bernand vs. CA……………….... 506
456 FEBTC vs. CA…………………………………………… 507
457 Bricktown Devt., et al. vs. Tierra……….…………………. 508
458 International School vs. CA……………………………...... 509
459 Banas vs. Asia Pacific Finance…………………………….. 510
460 Development Bank of the Philippines v. CA……………… 512
461 CBTC vs. CA……………………………………………... 513
IX. PROCEDURAL RULES ON DAMAGES

1. Specification of Amount of Damages
462 Manchester Development vs CA…………………………. 514
463 Davao Light v. Dinopol………………………………….... 515
464 Sun Insurance vs. Asuncion………………………………. 516
465 Ng Soon v. Hon. Alday…………………………………… 517
466 Tacay vs RTC of Tagum………………………………….. 518
2. Filing Fees for Claims for Damages
vii
1 Batangas Laguna Tayabas Bus Company & Armando Pon v. IAC, The Heirs of • As to the liability of the petitioners, Pon is primarily liable for his negligence in
Paz Vda. De Pamfilo, The Heirs Of Norma Neri, and Baylon Sales And Nena driving recklessly the truck owned by BLTB. The liability of the BLTB itself is also
Vda. De Rosales| Paras primary, direct and immediate in view of the fact that the deat of or injuries to its
G.R. Nos. 74387-90 November 14, 1988 passengers was through the negligence of its employee.
• The common carrier's liability for the death of or injuries to its passengers is based
FACTS on its contractual obligation to carry its passengers safely to their destination. They
• A bus owned by petitioner BLTB and driven by petitioner Pon collided with a bus are presumed to have acted negligently unless they prove that they have observed
owned by Superlines, when the former tried to overtake a car just as the Superlines' extaordinary diligence. In the case at bar, the appellants acted negligently.
Bus was coming from the opposite direction. • BLTB is also solidarly liable with its driver even though the liability of the driver
• The collision resulted in the death of Rosales, Pamfilo and Neri, as well as injuries to springs from quasi delict while that of the bus company from contract.
the wife of Rosales, and Sales. These people were passengers of the petitioner's bus.
• Rosales and Sales, as well as the surviving heirs of Pamfilo, Rosales and Neri IAC decision affirmed. Respondents win.
instituted separate cases ih the CFI against BLTB and Superlines, together with their
drivers. Criminal cases against the drivers were also filed in a different CFI.
• CFI ruled that only BLTB and Pon should be liable, and they were ordered jointly
and severally to pay damages. On appeal, the IAC affirmed the CFI's ruling.
• Petitioners contended that the CFI erred in ruling that the actions of private
respondents are based on culpa contractual, since if it were private respondents'
intention to file an action based on culap contractual, they could have done so by
merely impleading BLTB and Pon. Instead the respondents filed an action against all
defendants based on culpa aquiliana or tort.
ISSUES & ARGUMENTS
WON erred in ruling that the actions of private respondents are based on
culpa contractual
HOLDING & RATIO DECIDENDI
IAC anchored its decision on both culpa contractual and culpa aquiliana
• The proximate cause of the death and injuries of the passengers was the negligence
of the bus driver Pon, who recklessly overtook a car despite knowing that that the
bend of highway he was negotiating on had a continuous yellow line signifying a
“no-overtaking” zone.
• It is presumed that a a person driving a motor vehicle has been negligent if at the
time of the mishap, he was violating any traffic regulation.
• In the instant case, the driver of the BLTB bus failed to act with diligence demanded
by the circumstances. Pon should have remembered that when a motor vehicle is
approaching or rounding a curve there is special necessity for keeping to the right
side of the road and the driver has not the right to drive on the left hand side relying
upon having time to turn to the right if a car is approaching from the opposite
direction comes into view.
SATURDAY ALCISO
Page 1 of 528
2 Aboitiz v CA | Regalado Corollarily, it insists that the doctrine in La Mallorca vs. Court of Appeals,
G.R. No. 84458 November 6, 1989 | 179 SCRA 95 et al. is not applicable to the case at bar.
FACTS HOLDING & RATIO DECIDENDI

• On May 11, 1975, Anacleto Viana boarded the vessel M/V Antonia, owned by
Aboitiz Shipping Corp. (Aboitiz), at the port at San Jose, Occidental Mindoro, YES. The rule is that the relation of carrier and passenger continues until the
bound for Manila, having purchased a ticket (No. 117392) in the sum of P23.10. On passenger has been landed at the port of destination and has left the vessel
May 12, 1975, said vessel arrived at Pier 4, North Harbor, Manila, and the owner's dock or premises. All persons who remain on the premises a reasonable
passengers therein disembarked, a gangplank having been provided connecting the time after leaving the conveyance are to be deemed passengers, and what is a
side of the vessel to the pier. Instead of using said gangplank Anacleto Viana reasonable time or a reasonable delay within this rule is to be determined from all
disembarked on the third deck which was on the level with the pier. After said the circumstances, and includes a reasonable time to see after his baggage and
vessel had landed, the Pioneer Stevedoring Corporation (Pioneer) took over the prepare for his departure. The carrier-passenger relationship is not terminated
exclusive control of the cargoes loaded on said vessel pursuant to the Memorandum merely by the fact that the person transported has been carried to his destination
of Agreement dated July 26, 1975 between the third party Pioneer and Aboitiz. if, for example, such person remains in the carrier's premises to claim his
• The crane owned by Pioneer and operated by its crane operator Alejo Figueroa was baggage.
placed alongside the vessel and one (1) hour after the passengers of said vessel had • That reasonableness of time should be made to depend on the attending
disembarked, it started operation by unloading the cargoes from said vessel. While circumstances of the case, such as the kind of common carrier, the nature of its
the crane was being operated, Anacleto Viana who had already disembarked from business, the customs of the place, and so forth, and therefore precludes a
said vessel obviously remembering that some of his cargoes were still loaded in the consideration of the time element per se without taking into account such other
vessel, went back to the vessel, and it was while he was pointing to the crew of the factors. It is thus of no moment whether in the cited case of La Mallorca there was
said vessel to the place where his cargoes were loaded that the crane hit him, pinning no appreciable interregnum for the passenger therein to leave the carrier's premises
him between the side of the vessel and the crane. He was thereafter brought to the whereas in the case at bar, an interval of one (1) hour had elapsed before the victim
hospital where he died three (3) days thereafter, on May 15, 1975. For his met the accident. The primary factor to be considered is the existence of a
hospitalization, medical, burial and other miscellaneous expenses, Anacleto's wife, reasonable cause as will justify the presence of the victim on or near the petitioner's
herein plaintiff, spent a total of P9,800.00. Anacleto Viana who was only forty (40) vessel. We believe there exists such a justifiable cause.
years old when he met said fateful accident was in good health. His average annual • Under the law, common carriers are, from the nature of their business and for
income as a farmer or a farm supervisor was 400 cavans of palay annually. His reasons of public policy, bound to observe extraordinary diligence in the vigilance
parents, herein plaintiffs Antonio and Gorgonia Viana, prior to his death had been over the goods and for the safety of the passengers transported by them, according
recipient of twenty (20) cavans of palay as support or P120.00 monthly. Because of to all the circumstances of each case. More particularly, a common carrier is bound
Anacleto's death, plaintiffs suffered mental anguish and extreme worry or moral to carry the passengers safely as far as human care and foresight can provide, using
damages. For the filing of the instant case, they had to hire a lawyer for an agreed the utmost diligence of very cautious persons, with a due regard for all the
fee of ten thousand (P10,000.00) pesos. circumstances. Thus, where a passenger dies or is injured, the common carrier is
• The Vianas filed a complaint for damages against ABoitiz for breach of contract of presumed to have been at fault or to have acted negligently. This gives rise to an
carriage. And in a decision rendered by the trial court, Aboitiz was made to pay action for breach of contract of carriage where all that is required of plaintiff is to
damages incurred. Upon appeal, the Court of Appeals affirmed the trial court prove the existence of the contract of carriage and its non-performance by the
decision except as to the amount of damages. carrier, that is, the failure of the carrier to carry the passenger safely to his
destination, which, in the instant case, necessarily includes its failure to safeguard its
passenger with extraordinary diligence while such relation subsists.
ISSUES & ARGUMENTS
• W/N Aboitiz is liable for damages incurred the Vianas?
o Petitioner’s Argument: Aboitiz contends that since one (1) hour had
already elapsed from the time Anacleto Viana disembarked from the vessel
and that he was given more than ample opportunity to unload his cargoes
prior to the operation of the crane, his presence on the vessel was no
longer reasonable and he consequently ceased to be a passenger. TEL VIRTUDEZ
Page 2 of 528
3 Dangwa Transportation Co., Inc. And Theodore Lardizabal vs. CA, Heirs of the
late Pedrito Cudiamat | Regalado Other issues not directly related to torts, but may be asked in recitation:
G.R. No. 95582, October 7, 1991| • in an action based on a contract of carriage, the court need not make an express
finding of fault or negligence on the part of the carrier in order to hold it
FACTS responsible to pay the damages sought by the passenger. By contract of
• Lardizabal was driving a passenger bus belonging to Dangwa Transportation. There carriage, the carrier assumes the express obligation to transport the passenger to
was an accident and its passenger Cudiamat died as a consequence. his destination safely and observe extraordinary diligence with a due regard for
• There was a difference of opinion in the RTC and the CA: all the circumstances, and any injury that might be suffered by the passenger is
right away attributable to the fault or negligence of the carrier.
RTC – Cudiamat was negligent for trying to board a moving bus while holding • This is an exception to the general rule that negligence must be proved, and it is
an umbrella with his other hand. However, for equity reasons, an amount of therefore incumbent upon the carrier to prove that it has exercised
Php 10,000 was awarded to the heirs. This is also because the company earlier extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil
offered a settlement anyway, and there was a lack of diligence of the company Code.
when it left the doors open (since no one would even try to come in a moving
bus with its doors closed. • It is the duty of common carriers of passengers, including common carriers by
railroad train, streetcar, or motorbus, to stop their conveyances a reasonable
CA – Cudiamat tried to get on the bus while it was stationary (in between length of time in order to afford passengers an opportunity to board and enter,
bunkhouse 53 & 54). Cudiamat made a signal that he wanted to board the bus. and they are liable for injuries suffered by boarding passengers resulting from
When he was at the platform (which was wet and slippery because of a drizzle, the sudden starting up or jerking of their conveyances while they are doing so.
and was closing his umbrella, the bus driver suddenly jerked forward and
stepped on the accelerator, even before the victim was able to secure his seat. • It is not negligence per se, or as a matter of law, for one attempt to board a train
He was run over by the rear tires of the bus. He died after the bus did not or streetcar which is moving slowly. An ordinarily prudent person would have
immediately deliver him to a hospital and instead dropped off the other made the attempt board the moving conveyance under the same or similar
passengers and a refrigerator. Award of damages = Php 30k + 20k + 280k. circumstances. The fact that passengers board and alight from slowly moving
vehicle is a matter of common experience both the driver and conductor in this
• The SC believed the version of the CA, basing on testimony and physical evidence. case could not have been unaware of such an ordinary practice.
• The victim herein, by stepping and standing on the platform of the bus, is
ISSUES & ARGUMENTS already considered a passenger and is entitled all the rights and protection
pertaining to such a contractual relation. Hence, it has been held that the duty
W/N the award of damages was proper? (Primary, torts related) which the carrier passengers owes to its patrons extends to persons boarding
cars as well as to those alighting therefrom.
• Common carriers, from the nature of their business and reasons of public
No. The damages awarded are to be reduced. policy, are bound to observe extraordinary diligence for the safety of the
• With respect to the award of damages, an oversight was, however, committed by passengers transported by the according to all the circumstances of each case.
respondent Court of Appeals in computing the actual damages based on the gross 16 A common carrier is bound to carry the passengers safely as far as human
income of the victim. care and foresight can provide, using the utmost diligence very cautious
persons, with a due regard for all the circumstances
• The rule is that the amount recoverable by the heirs of a victim of a tort is not the
loss of the entire earnings, but rather the loss of that portion of the earnings which
the beneficiary would have received. In other words, only net earnings, not gross
earnings, are to be considered, that is, the total of the earnings less expenses
necessary in the creation of such earnings or income and minus living and other
incidental expenses. FRANK TAMARGO
Page 3 of 528
4 Atienza v COMELEC These filing fees refer to the expenses incurred by the COMELEC in the course of
December 20, 1994|239 SCRA 298 administering election cases and are species different from the bond or cash deposit
required by the previous election laws.
FACTS
Antonia Sia was elected mayor of Madrilejos, Cebu in the elections of 1988 over Lou
Atienza by 126 votes. Atienza filed an election protest in the RTC and it was held that
Atienza was, in fact, the real winner of the elections. RTC ordered Sia to reimburse
Atienza P300K representing Atienza’s expenses for the election protest.
Sia appealed the case to the COMELEC. COMELEC dismissed the case because the
principal issue (that of the election protest itself) became moot and academic since the
May 1992 synchronized elections had come. There was, however, an issue regarding the
award of monetary damages. Sia alleges that the appeal could not be simply dismissed
because it would amount to the affirmance of the monetary judgment without
considering the merits of the appeal.
COMELEC resolved the issue and reversed their decision. There is no need for Sia to
pay P300K anymore.
ISSUES & ARGUMENTS
Should Sia pay damages amounting to P300?

NO.
For actual damages to be recovered, Article 2199 of the Civil Code provides that one is
entitled to an adequate compensation for pecuniary loss suffered by him, it should be
provided for by law or stipulation. In this case, it is impossible for a party in an election
protest to recover actual or compensatory damage in the absence of a law expressly
provide in for situations allowing for the recovery of the same.
Most election protest cases where the monetary claim does not hinge on either a contract
or quasi-contract or a tortuous act or omission, the claimant must be able to point out to
specific provision of law authorizing the money claim for election protest expenses
against the losing party.
In the earlier Election Codes, there has been a provision regarding the bonds or cash
deposit required. This has been removed from the current Omnibus Election Code. Had
it been retained, that would have been the basis of the actual and compensatory damages.
Although there is a provision on deposit requirements for election protests in the
COMELEC Rules of Procedure, these are in the nature of filing fees, not damages.
CHESKA RESPICIO
Page 4 of 528
5 People vs. Bayotas therein, from the estate, or to enforce a lien thereon, and actions to recover damages for an
injury to person or property, real or personal, may be commenced against him.
FACTS This is in consonance with our ruling in Belamala where we held that, in recovering
Rogelio Bayotas y Cordova was charged with Rape and eventually convicted damages for injury to persons thru an independent civil action based on Article 33 of the
thereof. Pending appeal of his conviction, Bayotas died in the National Bilibid Hospital Civil Code, the same must be filed against the executor or administrator of the estate of
due to cardio respiratory arrest. Consequently, the Supreme Court in its Resolution deceased accused and not against the estate under Sec. 5, Rule 86 because this rule
dismissed the criminal aspect of the appeal. However, it required the Solicitor General to explicitly limits the claim to those for funeral expenses, expenses for the last sickness of
file its comment with regard to Bayotas' civil liability arising from his commission of the the decedent, judgment for money and claims arising from contract, express or implied.
offense charged. In his comment, the Solicitor General expressed his view that the death Contractual money claims, we stressed, refers only to purely personal obligations other than
of accused-appellant did not extinguish his civil liability as a result of his commission of those which have their source in delict or tort.
the offense charged. The Solicitor General, relying on the case of People v. Sendaydiego Conversely, if the same act or omission complained of also arises from contract, the
insists that the appeal should still be resolved for the purpose of reviewing his conviction separate civil action must be filed against the estate of the accused, pursuant to Sec. 5,
by the lower court on which the civil liability is based. Counsel for the accused-appellant, Rule 86 of the Rules of Court.
on the other hand, opposed the view of the Solicitor General arguing that the death of
the accused while judgment of conviction is pending appeal extinguishes both his Summary of Rules:
criminal and civil penalties. In support of his position, said counsel invoked the ruling of 1. Death of the accused pending appeal of his conviction extinguishes his criminal
the Court of Appeals in People v. Castillo and Ocfemia which held that the civil obligation in liability as well as the civil liability based solely thereon. As opined by Justice Regalado, in
a criminal case takes root in the criminal liability and, therefore, civil liability is this regard, "the death of the accused prior to final judgment terminates his criminal
extinguished if accused should die before final judgment is rendered. liability and only the civil liability directly arising from and based solely on the offense
committed, i.e., civil liability ex delicto in senso strictiore."
ISSUE & ARGUMENTS 2. Corollarily, the claim for civil liability survives notwithstanding the death of accused, if
the same may also be predicated on a source of obligation other than delict. 19 Article
Whether the death of the accused pending appeal of his conviction extinguish his
1157 of the Civil Code enumerates these other sources of obligation from which the civil
civil liability.
liability may arise as a result of the same act or omission:
(a) Law (b) Contracts (c) Quasi-contracts (d) . . . (e) Quasi-delicts
3. Where the civil liability survives, as explained in Number 2 above, an action for
Yes. Article 89 of the Revised Penal Code is the controlling statute. It reads, in recovery therefor may be pursued but only by way of filing a separate civil action and
part: Art. 89. How criminal liability is totally extinguished. — Criminal liability is totally subject to Section 1, Rule 111 of the 1985 Rules on Criminal Procedure as amended.
extinguished: (1.) By the death of the convict, as to the personal penalties; and as to the pecuniary This separate civil action may be enforced either against the executor/administrator or
penalties liability therefor is extinguished only when the death of the offender occurs before final judgment; the estate of the accused, depending on the source of obligation upon which the same is
The legal precept contained in this Article is lifted from Article 132 of the Spanish El based as explained above.
Codigo Penal de 1870. Accordingly, SC rule: if the private offended party, upon 4. Finally, the private offended party need not fear a forfeiture of his right to file this
extinction of the civil liability ex delicto desires to recover damages from the same act or separate civil action by prescription, in cases where during the prosecution of the
omission complained of, he must subject to Section 1, Rule 111 (1985 Rules on Criminal criminal action and prior to its extinction, the private-offended party instituted together
Procedure as amended) file a separate civil action, this time predicated not on the felony therewith the civil action. In such case, the statute of limitations on the civil liability is
previously charged but on other sources of obligation. The source of obligation upon deemed interrupted during the pendency of the criminal case, conformably with
which the separate civil action is premised determines against whom the same shall be provisions of Article 1155 21 of the Civil Code, that should thereby avoid any
enforced. If the same act or omission complained of also arises from quasi-delict or may, apprehension on a possible privation of right by prescription. 22
by provision of law, result in an injury to person or property (real or personal), the Applying this set of rules to the case at bench, SC held that the death of appellant
separate civil action must be filed against the executor or administrator of the estate of Bayotas extinguished his criminal liability and the civil liability based solely on the act
the accused pursuant to Sec. 1, Rule 87 of the Rules of Court: Sec. 1. Actions which may complained of, i.e., rape. Consequently, the appeal is hereby dismissed without
and which may not be brought against executor or administrator. — No action upon a claim for qualification.
the recovery of money or debt or interest thereon shall be commenced against the
executor or administrator; but actions to recover real or personal property, or an interest
JOY ADRANEDA
Page 5 of 528
6 Elcano vs. Hill | Barredo Code, whereas the civil liability for the same act considered as a quasi-delict only and
G.R. No. L-24803, May 26, 1977| 77 SCRA 98 not as a crime is not extinguished even by a declaration in the criminal case that the
criminal act charged has not happened or has not been committed by the accused.
FACTS
• Reginald Hill was a married minor living and getting subsistence from his father, co- Marvin Hill vicariously liable. However, since Reginald has come of age, as a
defendant Marvin. He killed Agapito Elcano, son of petitioners, for which he was matter of equity, the former’s liability is now merely subsidiary.
criminally prosecuted. However, he was acquitted on the ground that his act was not • Under Art. 2180, the father and in case of his death or incapacity, the mother, are
criminal because of "lack of intent to kill, coupled with mistake." responsible for the damages caused by the minor children who live in their
• Subsequently, petitioners filed a civil action for recovery of damages against company. In the case at bar, Reginald, although married, was living with his father
defendants, which the latter countered by a motion to dismiss. Trial court and getting subsistence from him at the time of the killing.
• The joint and solidary liability of parents with their offending children is in view of
the parental obligation to supervise minor children in order to prevent damage to
ISSUES & ARGUMENTS third persons. On the other hand, the clear implication of Art. 399, in providing that
• Whether the action for recovery of damages against Reginald and Marvin a minor emancipated by marriage may not sue or be sued without the assistance of
Hill is barred by res judicata. the parents is that such emancipation does not carry with it freedom to enter into
• Whether there is a cause of action against Reginald’s father, Marvin. transactions or do not any act that can give rise to judicial litigation.
Respondents: Marvin Hill is relieved as guardian of Reginald through emancipation
by marriage. Hence the Elcanos could not claim against Marvin Hill. Order appealed from REVERSED. Trial court ordered to proceed in accordance with the foregoing
opinion.
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.
• There is need for a reiteration and further clarification of the dual character, criminal
and civil, of fault or negligence as a source of obligation, which was firmly
established in this jurisdiction in Barredo vs. Garcia (73 Phil. 607).
• In this jurisdiction, the separate individuality of a cuasi-delito or culpa aquiliana, under
the Civil Code has been fully and clearly recognized, even with regard to a negligent
act for which the wrongdoer could have been prosecuted and convicted in a
criminal case and for which, after such a conviction, he could have been sued for
civil liability arising from his crime. (p. 617, 73 Phil.)
• Notably, Article 2177 of the New Civil Code provides that: “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.”
• Consequently, a separate civil action lies against the offender in a criminal act,
whether or not he is criminally prosecuted and found guilty or acquitted, provided
that the offended party is not allowed, if he is actually charged also criminally, to
recover damages on both scores, and would be entitled in such eventuality only to
the bigger award of the two, assuming the awards made in the two cases vary. In
other words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule
DANI BOLONG
111, refers exclusively to civil liability founded on Article 100 of the Revised Penal
Page 6 of 528
7 DMPI Employees vs. Velez Metal-NAFLU| PARDO, J. "(a) When a criminal action is instituted, the civil action for the recovery of civil liability
G.R. No. 129282, November 29, 2001 arising from the offense charged shall be deemed instituted with the criminal action unless the
offended party waives the civil action, reserves the right to institute it separately
FACTS or institutes the civil action prior to the criminal action."
• Rule 111, Section 2 further provides that —
An information for estafa was filed against Carmen Mandawe for alleged failure to "After the criminal action has been commenced, the separate civil action arising
account to respondent Eriberta Villegas the amount of P608,532.46. therefrom cannot be instituted until final judgment has been entered in the criminal action."
Respondent Villegas entrusted this amount to Carmen Mandawe, an employee of • However, with respect to civil actions for recovery of civil liability under Articles 32,
petitioner DMPI-ECCI, for deposit with the teller of petitioner. 33, 34 and 2176 of the Civil Code arising from the same act or omission, the rule
Subsequently, on March 29, 1994, respondent Eriberta Villegas filed with the Regional has been changed. Under the present rule, only the civil liability arising from the
Trial Court, a complaint against Carmen Mandawe and petitioner DMPI-ECCI for a sum offense charged is deemed instituted with the criminal action unless the offended
of money and damages with preliminary attachment arising out of the same transaction. party waives the civil action, reserves his right to institute it separately, or institutes
the civil action prior to the criminal action.17
In time, petitioner sought the dismissal of the civil case on the ground that there is a • There is no more need for a reservation of the right to file the independent civil
pending criminal case in RTC Branch 37, arising from the same facts, actions under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines. "The
reservation and waiver referred to refers only to the civil action for the recovery of
Trial court issued an order dismissing the case. However upon respondent’s motion for the civil liability arising from the offense charged. This does not include recovery of
reconsideration, the order of dismissal was recalled On Feb. 21 1997. civil liability under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines
arising from the same act or omission which may be prosecuted separately even
without a reservation.
ISSUE
Whether or not the civil case could proceed independently of the criminal case for • The changes in the Revised Rules on Criminal Procedure pertaining to independent
estafa without the necessary reservation exercised by the party civil actions which became effective on December 1, 2000 are applicable to this
HOLDING & RATIO DECIDENDI case.
YES • Procedural laws may be given retroactive effect to actions pending and
undetermined at the time of their passage. There are no vested rights in the rules of
• As a general rule, an offense causes two (2) classes of injuries. The first is the social procedure. Thus, Civil Case No. CV-94-214, an independent civil action for
injury produced by the criminal act which is sought to be repaired thru the damages on account of the fraud committed against respondent Villegas under
imposition of the corresponding penalty, and the second is the personal injury Article 33 of the Civil Code, may proceed independently even if there was no
caused to the victim of the crime which injury is sought to be compensated through reservation as to its filing.
indemnity which is civil in nature.
• Thus, "every person criminally liable for a felony is also civilly liable." This is the law
governing the recovery of civil liability arising from the commission of an offense.
• Civil liability includes restitution, reparation for damage caused, and indemnification
of consequential damages
• The offended party may prove the civil liability of an accused arising from the
commission of the offense in the criminal case since the civil action is either deemed
instituted with the criminal action or is separately instituted.
• Rule 111, Section 1 of the Revised Rules of Criminal Procedure, which became
effective on December 1, 2000, provides that: TIN DIÑO
Page 7 of 528
8 Roy Padilla, Filomeno Galdones, Ismael Gonzalgo And Jose Farley Bedenia Vs.  Extinction of the penal action does not carry with it
CA| GUTIERREZ, JR., J. extinction of the civil, unless the extinction proceeds from a
G.R. No. L-39999 May 31, 1984| 129 SCRA 558 declaration in a final judgment that the fact from which the
civil action might arise did not exist. In other cases, the
FACTS person entitled to the civil action may institute it in the
• Petitioner Padilla was the Mayor of Panganiban, CamNorte, while the other Jurisdiction and in the manner provided by law against the person
petitioners were policemen, who did a clearing operation of the public market by who may be liable for restitution of the thing and reparation or
virtue of the order of the Mayor. indemnity for the damage suffered.
• In this operation, PR Antonio Vergara and his family’s stall (Pub Market Bldg 3) was o Art 29, NCC:
forcibly opened, cleared of its content and demolished by ax, crowbar and hammers.  When the accused in a criminal prosecution is acquitted on the
o Petitioner’s defense: Vergara was given (prior notice) 72 hrs to vacate. ground that his guilt has not been proved beyond reasonable
o Vergara’s: Petitioners took they advantage of their positions; must be doubt, a civil action for damages for the same act or
charged the with grave coercion; there was evident premeditation. omission may be instituted. Such action requires only a
• RTC: Petitioners are guilty of grave coercion, to be punished 5mos &1day preponderance of evidence. Upon motion of the defendant, the
imprisonment, and solidarily fined 30K for moral damages, 10K actual and 10K court may require the plaintiff to file a bond to answer for
exemplary. damages in case the complaint should be found to be malicious.
• CA: acquitted, but solidarily liable for actual damages of P9,600.  If in a criminal case the judgment of acquittal is based upon
• MR denied. Petitioners now appeal claiming that they are not liable for damages by reasonable doubt, the court shall so declare. In the absence
virtue of the acquittal. of any declaration to that effect, it may be inferred from the
text of the decision whether or not the acquittal is due to that
ISSUES & ARGUMENTS ground.
____________________________________________________________________ • Facts support existence of damage; the extinction of Petitioner’s criminal liability
W/N Petitioners are liable still for civil damages despite acquittal of the CA? (acquittal) did not carry with it the extinction of their civil liability.
Defense of Petitioner: the civil liability which is included in the criminal action is that • Application of Art 29: action need not be filed in a separate civil action all the time,
arising from and as a consequence of the criminal act, and the defendant was acquitted in (as in this case) where fact of injury, its commission and result were already
the criminal case, (no civil liability arising from the criminal case), no civil liability arising established in the criminal proceeding. Since by preponderance of evidence, civil
from the criminal charge could be imposed upon him. liability was proven to exist, indemnity is due in favor of Vergara. A separate action
will simply delay relief due to Vergara.
Petition DENIED. CA AFFIRMED.
PETITIONERS ARE LIABLE TO PAY DAMAGES.
• First, they were acquitted due to REASONABLE DOUBT. Grave coercion is
committed if force upon the person is applied, and not force upon things as in this
case. The CA held that they should’ve been charged with threats or malicious
mischief. Since, these offenses were not alleged in the complaint, Petitioners cannot
be prosecuted for it.
• HOWEVER, the clearing and demolition was not denied. As a result, Vergara
indeed suffered damages pertaining to: cost of stall construction (1300), value
furniture and equipment(300), value of goods seized(8K), amounting to P9600.
Under the law, petitioners are liable.
o RPC 100: every person criminally liable is civilly liable
o 2176: damages due under quasi-delict, limited though by 2177: from
recovering twice from the same act.
o ROC Rule 111, Sec 2 last paragraph:
DIANE LIPANA
Page 8 of 528
9 Philippine Rabbit Bus Lines, Inc. vs People of the Philippines | Panganiban, J. When the accused-employee absconds or jumps bail, the judgment meted out becomes
G.R. No. 147703, April 24, 2004 | final and executory. The employer cannot defeat the finality of the judgment by filing a
notice of appeal on its own behalf in the guise of asking for a review of its subsidiary
FACTS civil liability. Both the primary civil liability of the accused-employee and the subsidiary
• “On July 27, 1994, accused [Napoleon Roman y Macadangdang] was found guilty civil liability of the employer are carried in one single decision that has become final and
and convicted of the crime of reckless imprudence resulting to triple homicide, executory.
multiple physical injuries and damage to property and was sentenced to suffer the Article 102 of the Revised Penal Code states the subsidiary civil liabilities of innkeepers,
penalty of four (4) years, nine (9) months and eleven (11) days to six (6) years, and as follows:
to pay damages several people. “In default of the persons criminally liable, innkeepers, tavernkeepers, and any
• “The court further ruled that [petitioner], in the event of the insolvency of accused, other persons or corporations shall be civilly liable for crimes committed in
shall be liable for the civil liabilities of the accused. Evidently, the judgment against their establishments, in all cases where a violation of municipal ordinances or
accused had become final and executory. some general or special police regulation shall have been committed by them or
• “Admittedly, accused had jumped bail and remained at-large. It is worth their employees.
mention[ing] that Section 8, Rule 124 of the Rules of Court authorizes the dismissal “Innkeepers are also subsidiary liable for restitution of goods taken by robbery
of appeal when appellant jumps bail. Counsel for accused, also admittedly hired and or theft within their houses from guests lodging therein, or for payment of the
provided by [petitioner], filed a notice of appeal which was denied by the trial court. value thereof, provided that such guests shall have notified in advance the
We affirmed the denial of the notice of appeal filed in behalf of accused. innkeeper himself, or the person representing him, of the deposit of such goods
• “Simultaneously, on August 6, 1994, [petitioner] filed its notice of appeal from the within the inn; and shall furthermore have followed the directions which such
judgment of the trial court. On April 29, 1997, the trial court gave due course to innkeeper or his representative may have given them with respect to the care
[petitioner’s] notice of appeal. On December 8, 1998, [petitioner] filed its brief. On and vigilance over such goods. No liability shall attach in case of robbery with
December 9, 1998, the Office of the Solicitor General received [a] copy of violence against or intimidation of persons unless committed by the innkeeper’s
[petitioner’s] brief. On January 8, 1999, the OSG moved to be excused from filing employees.”
[respondents’] brief on the ground that the OSG’s authority to represent People is Moreover, the foregoing subsidiary liability applies to employers, according to Article
confined to criminal cases on appeal. The motion was however denied per Our 103 which reads:
resolution of May 31, 1999. On March 2, 1999, [respondent]/private prosecutor “The subsidiary liability established in the next preceding article shall also apply
filed the instant motion to dismiss.”6 (Citations omitted) to employers, teachers, persons, and corporations engaged in any kind of
• The CA ruled that the institution of a criminal case implied the institution also of industry for felonies committed by their servants, pupils, workmen, apprentices,
the civil action arising from the offense. Thus, once determined in the criminal case or employees in the discharge of their duties.”
against the accused-employee, the employer’s subsidiary civil liability as set forth in Having laid all these basic rules and principles, we now address the main issue raised by
Article 103 of the Revised Penal Code becomes conclusive and enforceable. petitioner.
• The appellate court further held that to allow an employer to dispute independently At the outset, we must explain that the 2000 Rules of Criminal Procedure has clarified
the civil liability fixed in the criminal case against the accused-employee would be to what civil actions are deemed instituted in a criminal prosecution.
amend, nullify or defeat a final judgment. Since the notice of appeal filed by the Section 1 of Rule 111 of the current Rules of Criminal Procedure provides:
accused had already been dismissed by the CA, then the judgment of conviction and “When a criminal action is instituted, the civil action for the recovery of civil
the award of civil liability became final and executory. Included in the civil liability liability arising from the offense charged shall be deemed instituted with the
of the accused was the employer’s subsidiary liability. Hence, this Petition. criminal action unless the offended party waives the civil action, reserves the
right to institute it separately or institutes the civil action prior to the criminal
ISSUES & ARGUMENTS action.
W/N an employer, who dutifully participated in the defense of its accused-employee, “x x x xxx x x x”
may appeal the judgment of conviction independently of the accused.. Only the civil liability of the accused arising from the crime charged is deemed impliedly
instituted in a criminal action; that is, unless the offended party waives the civil action,
reserves the right to institute it separately, or institutes it prior to the criminal action.18
Hence, the subsidiary civil liability of the employer under Article 103 of the Revised
HOLDING & RATIO DECIDENDI Penal Code may be enforced by execution on the basis of the judgment of conviction
The Petition has no merit. meted out to the employee.19
Page 9 of 528
It is clear that the 2000 Rules deleted the requirement of reserving independent civil solely for the benefit of the accused. He may avail of it or not, as he pleases. He
actions and allowed these to proceed separately from criminal actions. Thus, the civil may waive it either expressly or by implication. When the accused flees after the
actions referred to in Articles 32,20 33,21 3422 and 217623 of the Civil Code shall remain case has been submitted to the court for decision, he will be deemed to have
“separate, distinct and independent” of any criminal prosecution based on the same act. waived his right to appeal from the judgment rendered against him. X x x.”37
Here are some direct consequences of such revision and omission:
1. The right to bring the foregoing actions based on the Civil Code need not be By fleeing, the herein accused exhibited contempt of the authority of the court and
reserved in the criminal prosecution, since they are not deemed included placed himself in a position to speculate on his chances for a reversal. In the process, he
therein. kept himself out of the reach of justice, but hoped to render the judgment nugatory at
2. The institution or the waiver of the right to file a separate civil action arising his option.38 Such conduct is intolerable and does not invite leniency on the part of the
from the crime charged does not extinguish the right to bring such action. appellate court.39
3. The only limitation is that the offended party cannot recover more than once
for the same act or omission.24 Consequently, the judgment against an appellant who escapes and who refuses to
surrender to the proper authorities becomes final and executory.40
What is deemed instituted in every criminal prosecution is the civil liability arising from
the crime or delict per se (civil liability ex delicto), but not those liabilities arising from Thus far, we have clarified that petitioner has no right to appeal the criminal case against
quasi-delicts, contracts or quasi-contracts. In fact, even if a civil action is filed separately, the accused-employee; that by jumping bail, he has waived his right to appeal; and that
the ex delicto civil liability in the criminal prosecution remains, and the offended party may the judgment in the criminal case against him is now final.
– subject to the control of the prosecutor – still intervene in the criminal action, in order
to protect the remaining civil interest therein.25 As a matter of law, the subsidiary liability of petitioner now accrues. Petitioner argues
that the rulings of this Court in Miranda v. Malate Garage & Taxicab, Inc.,41 Alvarez v. CA42
This discussion is completely in accord with the Revised Penal Code, which states that and Yusay v. Adil43 do not apply to the present case, because it has followed the Court’s
“[e]very person criminally liable for a felony is also civilly liable.”26 directive to the employers in these cases to take part in the criminal cases against their
employees. By participating in the defense of its employee, herein petitioner tries to
Petitioner argues that, as an employer, it is considered a party to the criminal case and is shield itself from the undisputed rulings laid down in these leading cases.
conclusively bound by the outcome thereof. Consequently, petitioner must be accorded
the right to pursue the case to its logical conclusion – including the appeal. Such posturing is untenable. In dissecting these cases on subsidiary liability, petitioner
lost track of the most basic tenet they have laid down – that an employer’s liability in a
The argument has no merit. Undisputedly, petitioner is not a direct party to the criminal finding of guilt against its accused-employee is subsidiary.
case, which was filed solely against Napoleon M. Roman, its employee.
Under Article 103 of the Revised Penal Code, employers are subsidiarily liable for the
The cases dealing with the subsidiary liability of employers uniformly declare that, strictly adjudicated civil liabilities of their employees in the event of the latter’s insolvency.44 The
speaking, they are not parties to the criminal cases instituted against their employees.28 provisions of the Revised Penal Code on subsidiary liability – Articles 102 and 103 – are
Although in substance and in effect, they have an interest therein, this fact should be deemed written into the judgments in the cases to which they are applicable.45 Thus, in
viewed in the light of their subsidiary liability. While they may assist their employees to the dispositive portion of its decision, the trial court need not expressly pronounce the
the extent of supplying the latter’s lawyers, as in the present case, the former cannot act subsidiary liability of the employer.
independently on their own behalf, but can only defend the accused.
In the absence of any collusion between the accused-employee and the offended party,
Moreover, within the meaning of the principles governing the prevailing criminal the judgment of conviction should bind the person who is subsidiarily liable.46 In effect
procedure, the accused impliedly withdrew his appeal by jumping bail and thereby made and implication, the stigma of a criminal conviction surpasses mere civil liability.47
the judgment of the court below final.35 Having been a fugitive from justice for a long To allow employers to dispute the civil liability fixed in a criminal case would enable
period of time, he is deemed to have waived his right to appeal. Thus, his conviction is them to amend, nullify or defeat a final judgment rendered by a competent court.48 By
now final and executory. The Court in People v. Ang Gioc36 ruled: the same token, to allow them to appeal the final criminal conviction of their employees
without the latter’s consent would also result in improperly amending, nullifying or
“There are certain fundamental rights which cannot be waived even by the defeating the judgment.
accused himself, but the right of appeal is not one of them. This right is granted
Page 10 of 528
The decision convicting an employee in a criminal case is binding and conclusive upon
the employer not only with regard to the former’s civil liability, but also with regard to its
amount. The liability of an employer cannot be separated from that of the employee.49
Before the employers’ subsidiary liability is exacted, however, there must be adequate
evidence establishing that (1) they are indeed the employers of the convicted employees;
(2) that the former are engaged in some kind of industry; (3) that the crime was
committed by the employees in the discharge of their duties; and (4) that the execution
against the latter has not been satisfied due to insolvency.50
The resolution of these issues need not be done in a separate civil action. But the
determination must be based on the evidence that the offended party and the employer
may fully and freely present. Such determination may be done in the same criminal
action in which the employee’s liability, criminal and civil, has been pronounced;51 and in
a hearing set for that precise purpose, with due notice to the employer, as part of the
proceedings for the execution of the judgment.
Just because the present petitioner participated in the defense of its accused-employee
does not mean that its liability has transformed its nature; its liability remains subsidiary.
Neither will its participation erase its subsidiary liability. The fact remains that since the
accused-employee’s conviction has attained finality, then the subsidiary liability of the
employer ipso facto attaches.
According to the argument of petitioner, fairness dictates that while the finality of
conviction could be the proper sanction to be imposed upon the accused for jumping
bail, the same sanction should not affect it. In effect, petitioner-employer splits this case
into two: first, for itself; and second, for its accused-employee.
The untenability of this argument is clearly evident. There is only one criminal case
against the accused-employee. A finding of guilt has both criminal and civil aspects. It is
the height of absurdity for this single case to be final as to the accused who jumped bail,
but not as to an entity whose liability is dependent upon the conviction of the former.
The subsidiary liability of petitioner is incidental to and dependent on the pecuniary civil
liability of the accused-employee. Since the civil liability of the latter has become final
and enforceable by reason of his flight, then the former’s subsidiary civil liability has also
become immediately enforceable. Respondent is correct in arguing that the concept of
subsidiary liability is highly contingent on the imposition of the primary civil liability.
JAY DUHAYLONGSOD
Page 11 of 528
10 Manliclic v. Calaunan | Chico-Nazario door to civil liability based on the crime or ex delicto. In this second instance, there
G.R. No. 150157 January 25, 2007| 512 SCRA 642 being no crime or delict to speak of, civil liability based thereon or ex delicto is not
possible. In this case, a civil action, if any, may be instituted on grounds other than
FACTS the delict complained of.
• Petitioner Manliclic is a driver of Philippine Rabbit Bus Lines, Inc. (PRBLI) While • As regards civil liability arising from quasi-delict or culpa aquiliana, same will not be
driving his bus going to Manila, he bumped rear left side of the owner-type jeep of extinguished by an acquittal, whether it be on ground of reasonable doubt or that
Respondent Calaunan. accused was not the author of the act or omission complained of (or that there is
• Because of the collision, petitioner was criminally charged with reckless imprudence declaration in a final judgment that the fact from which the civil liability might arise
resulting to damage to property with physical injuries. Subsequently, respondent did not exist). The responsibility arising from fault or negligence in a quasi-delict is
filed a damage suit against petitioner and PRBLI. entirely separate and distinct from the civil liability arising from negligence under the
• According to respondent, his jeep was cruising at the speed of 60 to 70 kilometers Penal Code. An acquittal or conviction in the criminal case is entirely irrelevant in
per hour on the slow lane of the expressway when the Philippine Rabbit Bus the civil case based on quasi-delict or culpa aquiliana.
overtook the jeep and in the process of overtaking the jeep, the Philippine Rabbit
Bus hit the rear of the jeep on the left side. At the time the Philippine Rabbit Bus hit
the jeep, it was about to overtake the jeep. In other words, the Philippine Rabbit
Bus was still at the back of the jeep when the jeep was hit. On the other hand,
according to petitioner, explained that when the Philippine Rabbit bus was about to
go to the left lane to overtake the jeep, the latter jeep swerved to the left because it
was to overtake another jeep in front of it.
• Petitioner was then acquitted of the criminal charges against him. However, in the
civil case, he, along with his employer, PRBLI, was still made to pay damages to
respondent.
ISSUES & ARGUMENTS

• What is the effect of Manliclic’s acquittal to the civil case?
SINCE THE CIVIL CASE IS ONE FOR QUASI DELICT, MANLICLIC’S

ACQUITTAL DOES NOT AFFECT THE CASE. MANLICLIC AND PRBLI ARE
STILL LIABLE FOR DAMAGES
• A quasi-delict or culpa aquiliana is a separate legal institution under the Civil Code
with a substantivity all its own, and individuality that is entirely apart and
independent from a delict or crime – a distinction exists between the civil liability
arising from a crime and the responsibility for quasi-delicts or culpa extra-
contractual. 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. It is now settled that acquittal of the accused,
even if based on a finding that he is not guilty, does not carry with it the extinction
of the civil liability based on quasi delict.
• In other words, if an accused is acquitted based on reasonable doubt on his guilt, his
civil liability arising from the crime may be proved by preponderance of evidence
only. However, if an accused is acquitted on the basis that he was not the author of
the act or omission complained of (or that there is declaration in a final judgment
that the fact from which the civil might arise did not exist), said acquittal closes the JOHN FADRIGO
Page 12 of 528
11 Air France v. Carascoso and CA
G.R. No. L-21438 September 28, 1966 Why, then, was he allowed to take a first class seat in the plane at Bangkok, if he had no
seat or, if another had a better right to the seat?
FACTS To authorize an award for moral damages there must be an averment of fraud or bad
faith. It is true that there is no specific mention of the term bad faith in the complaint.
On March 28, 1958, the defendant, Air France, through its authorized agent, But, the inference of bad faith is there, it may be drawn from the facts and circumstances
Philippine Air Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket from set forth therein. The contract was averred to establish the relation between the parties.
Manila to Rome. From Manila to Bangkok, plaintiff travelled in "first class", but at But the stress of the action is put on wrongful expulsion. It is, therefore, unnecessary to
Bangkok, the Manager of the defendant airline forced plaintiff to vacate the "first class" inquire as to whether or not there is sufficient averment in the complaint to justify an
seat that he was occupying because, in the words of the witness Ernesto G. Cuento, award for moral damages. Deficiency in the complaint, if any, was cured by the evidence.
there was a "white man", who, the Manager alleged, had a "better right" to the seat. An amendment thereof to conform to the evidence is not even required.
When asked to vacate his "first class" seat, the plaintiff, as was to be expected, refused,
and told defendant's Manager that his seat would be taken over his dead body; a Passengers do not contract merely for transportation. They have a right to be treated by
commotion ensued, and, according to said Ernesto G. Cuento, "many of the Filipino the carrier's employees with kindness, respect, courtesy and due consideration. They are
passengers got nervous in the tourist class; when they found out that Mr. Carrascoso was entitled to be protected against personal misconduct, injurious language, indignities and
having a hot discussion with the white man [manager], they came all across to Mr. abuses from such employees. So it is that any rule or discourteous conduct on the part of
Carrascoso and pacified Mr. Carrascoso to give his seat to the white man" and plaintiff employees towards a passenger gives the latter an action for damages against the carrier.
reluctantly gave his "first class" seat in the plane.
ISSUES & ARGUMENTS
Was Carrascoso entitled to the first class seat he claims and therefore entitles to
damages?
Yes. It is conceded in all quarters that on March 28, 1958 he paid to and received from
petitioner a first class ticket. But petitioner asserts that said ticket did not represent the
true and complete intent and agreement of the parties; that said respondent knew that he
did not have confirmed reservations for first class on any specific flight, although he had
tourist class protection; that, accordingly, the issuance of a first class ticket was no
guarantee that he would have a first class ride, but that such would depend upon the
availability of first class seats.
If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat,
notwithstanding the fact that seat availability in specific flights is therein confirmed, then
an air passenger is placed in the hollow of the hands of an airline. What security then can
a passenger have? It will always be an easy matter for an airline aided by its employees, to
strike out the very stipulations in the ticket, and say that there was a verbal agreement to
the contrary. What if the passenger had a schedule to fulfill? We have long learned that,
as a rule, a written document speaks a uniform language; that spoken word could be
notoriously unreliable. If only to achieve stability in the relations between passenger and
air carrier, adherence to the ticket so issued is desirable. Such is the case here. The lower
courts refused to believe the oral evidence intended to defeat the covenants in the ticket. J.C. LERIT
Page 13 of 528
12 LRTA v Navidad| Vitug ISSUES & ARGUMENTS
GR 145804, 6 February 2003
W/N LRTA liable for tort arising from contract
FACTS
• On 14 October 1993, about half an hour past 7:00 p.m., Nicanor Navidad, then HOLDING & RATIO DECIDENDI
drunk, entered the EDSA LRT station after purchasing a “token” (representing
payment of the fare). While Navidad was standing on the platform near the YES. The premise for employer’s liability for tort (under the provisions of Article
LRT tracks, Junelito Escartin, the security guard assigned to the area 2176 and related provisions, in conjunction with Article 2180 of the Civil Code) is
approached Navidad. A misunderstanding or an altercation between the two negligence or fault on the part of the employee. Once such fault is established,
apparently ensued that led to a fist fight. No evidence, however, was adduced the employer can then be made liable on the basis of the presumption juris
to indicate how the fight started or who, between the two, delivered the first tantum that the employer failed to exercise diligentissimi patris familias in the
blow or how Navidad later fell on the LRT tracks. At the exact moment that selection and supervision of its employees. The liability is primary and can only
Navidad fell, an LRT train, operated by Rodolfo Roman, was coming be negated by showing due diligence in the selection and supervision of the
in.Navidad was struck by the moving train, and he was killed instantaneously. employee. Herein, such a factual matter that has not been shown.
• On 8 December 1994, the widow of Nicanor, Marjorie Navidad, along with her • The foundation of LRTA’s liability is the contract of carriage and its obligation
children, filed a complaint for damages against Junelito Escartin, Rodolfo to indemnify the victim arises from the breach of that contract by reason of its failure to
Roman, the LRTA, the Metro Transit Organization, Inc. (Metro Transit), and exercise the high diligence required of the common carrier. In the discharge of its
Prudent for the death of her husband. LRTA and Roman filed a counterclaim commitment to ensure the safety of passengers, a carrier may choose to hire its own
against Navidad and a cross-claim against Escartin and Prudent. Prudent, in its employees or avail itself of the services of an outsider or an independent firm to
answer, denied liability and averred that it had exercised due diligence in the undertake the task. In either case, the common carrier is not relieved of its
selection and supervision of its security guards. The LRTA and Roman responsibilities under the contract of carriage.
presented their evidence while Prudent and Escartin, instead of presenting • A contractual obligation can be breached by tort and when the same act or
evidence, filed a demurrer contending that Navidad had failed to prove that omission causes the injury, one resulting in culpa contractual and the other in culpa
Escartin was negligent in his assigned task. On 11 August 1998, the trial court aquiliana, Article 2194 of the Civil Code can well apply. In fine, a liability for tort may
rendered its decision, ordering Prudent Security and Escartin to jointly and arise even under a contract, where tort is that which breaches the contract. Stated
severally pay Navidad (a) (1) Actual damages of P44,830.00; (2) Compensatory differently, when an act which constitutes a breach of contract would have itself
damages of P443,520.00; (3) Indemnity for the death of Nicanor Navidad in the constituted the source of a quasi-delictual liability had no contract existed between the
sum of P50,000.00; (b) Moral damages of P50,000.00; (c) Attorney’s fees of parties, the contract can be said to have been breached by tort, thereby allowing the rules
P20,000; and (d) Costs of suit. The court also dismissed the complaint against on tort to apply.
LRTA and Rodolfo Roman for lack of merit, and the compulsory counterclaim
of LRTA and Roman.
• Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate

court promulgated its decision exonerating Prudent from any liability for the
death of Nicanor Navidad and, instead, holding the LRTA and Roman jointly
and severally liable. The appellate court modified the judgment ordering Roman
and the LRTA solidarily liable to pay Navidad (a) P44,830.00 as actual damages;
(b) P50,000.00 as nominal damages; (c) P50,000.00 as moral damages; (d)
P50,000.00 as indemnity for the death of the deceased; and (e) P20,000.00 as
and for attorney’s fees. The appellate court denied LRTA’s and Roman’s
motion for reconsideration in its resolution of 10 October 2000. Hence, this
appeal.
JON LINA
Page 14 of 528
13 Far East Bank and Trust Co. v. CA | Vitug and analogous cases: (1) A criminal offense resulting in physical injuries; (2) Quasi-
G.R. No. 108164 February 23, 1995 | 241 SCRA 671 delicts causing physical injuries;
• It is true that the bank was remiss in indeed neglecting to personally inform Luis of
FACTS his own card's cancellation. Nothing however, can sufficiently indicate any deliberate
• In October 1986 Luis Luna applied for a FAREASTCARD with Fart East Bank. A intent on the part of the Bank to cause harm to private respondents. Neither could
supplemental card was also issued to his wife, Clarita the bank’s negligence in failing to give personal notice to Luis be considered so
• On August 1988, Clarita lost her card and promptly informed the bank of its loss gross as to amount to malice or bad faith.
for which she submitted an Affidavit of Loss. The bank recorded this loss and gave • Malice or bad faith implies a conscious and intentional design to do a wrongful act
the credit card account a status of “Hot Card” and/or “Cancelled Card.” Such for a dishonest purpose or moral obliquity; it is different from the negative idea of
record holds also for the principal card holder until such time that the lost card was negligence in that malice or bad faith contemplates a state of mind affirmatively
replaced. operating with furtive design or ill will.
• On October 1988, Luis Luna used his card to purchase a despidida lunch for hi
friend in the Bahia Rooftop Restaurant. His card was dishonored in the restaurant • Nominal damages were awarded because of the simple fact that the bank failed to
and he was forced to pay in cash, amounting to almost P600.00. He felt embarrassed notify Mr. Luna, thus entitle him to recover a measure of damages sanctioned under
by this incident. Article 2221 of the Civil Code providing thusly:
• He then complained to Far East Bank and he found out that his account has been o Art. 2221. Nominal damages are adjudicated in order that a right of the
cancelled without informing him. Bank security policy is to tag the card as hostile plaintiff, which has been violated or invaded by the defendant, may be
when it is reported lost, however, the bank failed to inform him and an overzealous vindicated or recognized, and not for the purpose of indemnifying the
employee failed to consider that it was the cardholder himself presenting the credit plaintiff for any loss suffered by him.
card.
• The bank sent an apology letter to Mr. Luna and to the Manager of the Bahia
Rooftop Restaurant to assure that Mr Luna was a very valuable client.
• Spouses Luna still felt aggrieved and thus filed this case for damages against Far
East Bank.
• Far East Bank was adjudged to pay the following: (a) P300,000.00 moral damages;
(b) P50,000.00 exemplary damages; and (c) P20,000.00 attorney's fees.
ISSUES & ARGUMENTS

• W/N Far East Bank is liable for damages to the Spouses Luna amounting
the above-mentioned figures?
o Petitioner-Appellant: Far East contends that the amounts to be paid to
the spouses are excessive. They argue that they should not be paying moral
damages because there was no bad faith on their part in breaching their
contract.
o Respondent-Appellee: Mr. Luna contends that he was embarrassed by
the situation which was caused by the bank’s failure to inform him of the
cancellation of his card. thus, he is entitled to damages.
SPOUSES LUNA ARE ENTITLED ONLY TO NOMINAL DAMAGES BUT

NOT MORAL AND EXEMPLARY DAMAGES.
• Moral damages are awarded if the defendant is to be shown to have acted in bad
faith. Article 2219 states that, “Moral damages may be recovered in the following MIK MALANG
Page 15 of 528
14 Natividad v. Andamo Emmanuel R. Andamo vs IAC| Fernan corporation supposedly constituting fault or negligence, and the causal
G.R. No. 74761 November 6, 1990| connection between the act and the damage, with no pre-existing contractual
obligation between the parties make a clear case of a quasi delict or culpa aquiliana.
FACTS • Article 2176, whenever it refers to "fault or negligence", covers not only acts
• Spouses Andamo are the owners of a parcel of land which is adjacent to that of "not punishable by law" but also acts criminal in character, whether intentional
private respondent, Missionaries of Our Lady of La Salette, Inc., a religious and voluntary or negligent. Consequently, a separate civil action lies against the
corporation. offender in a criminal act, whether or not he is criminally prosecuted and found
• Within the land of respondent corporation, waterpaths and contrivances, guilty or acquitted, provided that the offended party is not allowed, (if the
including an artificial lake, were constructed, which allegedly inundated and tortfeasor is actually charged also criminally), to recover damages on both
eroded petitioners' land, caused a young man to drown, damaged petitioners' scores, and would be entitled in such eventuality only to the bigger award of the
crops and plants, washed away costly fences, endangered the lives of petitioners two, assuming the awards made in the two cases vary.
and their laborers during rainy and stormy seasons, and exposed plants and
other improvements to destruction.
• Petitioners filed a criminal and a separate civil action for damages against the
respondent.
ISSUES & ARGUMENTS

W/N the IAC erred in affirming the trial court’s order dismissing the civil case as
the criminal case was still unresolved
o Petitioners contend that the trial court and the Appellate Court erred in
dismissing Civil Case No. TG-748 since it is predicated on a quasi-delict
o That the lower court was justified in dismissing the civil action for lack of
jurisdiction, as the criminal case, which was instituted ahead of the civil
case, was still unresolved
Yes
• A careful examination of the aforequoted complaint shows that the civil action
is one under Articles 2176 and 2177 of the Civil Code on quasi-delicts. 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; and (c) the connection of cause and effect
between the fault or negligence of the defendant and the damages incurred by
the plaintiff. 11
• Clearly, from petitioner's complaint, the waterpaths and contrivances built by
respondent corporation are alleged to have inundated the land of petitioners.
There is therefore, an assertion of a causal connection between the act of
building these waterpaths and the damage sustained by petitioners. Such action
if proven constitutes fault or negligence which may be the basis for the
recovery of damages.
• petitioners' complaint sufficiently alleges that petitioners have sustained and will
continue to sustain damage due to the waterpaths and contrivances built by
respondent corporation. Indeed, the recitals of the complaint, the alleged
presence of damage to the petitioners, the act or omission of respondent KATH MATIBAG
Page 16 of 528
15 Castro v. People | Corona, J. Article 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors
G.R. No. 180823 23 July 2008 and other persons. The following and similar acts, though they may not constitute a criminal offense, shall
produce a cause of action for damages, prevention and other relief:
FACTS
• Reedley International School dismissed Tan’s son, Justin Albert for violating the xxx xxx xxx
terms of his disciplinary probation. RIS reconsidered its decision upon Tan’s request
but imposed “non-appealable” conditions such as excluding Justin Albert from (3) Intriguing to cause another to be alienated from his friends;
participating in the graduation ceremonies.
• Tan filed a complaint in the Department of Education violation of the Manual of xxx xxx xxx
Regulation of Private Schools, Education Act of 1982 and Article 19 of the Civil The Court reminded the petitioner that as an educator, he is supposed to be a role model
Code against RIS. He alleged that the dismissal of his son was undertaken with for the youth. As such, he should always act with justice, give everyone his due and
malice, bad faith and evident premeditation. After investigation, the Dep-Ed found observe honesty and good faith.
that RIS’ code violation point system allowed the summary imposition of
unreasonable sanctions. After investigation, the Dep-Ed found that RIS’ code
violation point system allowed the summary imposition of unreasonable sanctions.
Hence, the Dep-Ed nullified it.
• The Dep-Ed ordered RIS to readmit Justin Albert without any condition. Thus, he
was able to graduate from RIS and participate in the commencement ceremonies
held on March 30, 2003.
• After the graduation ceremonies, Tan met Bernice C. Ching, a fellow parent at RIS.
In the course of their conversation, Tan intimated that he was contemplating a suit
against the officers of RIS in their personal capacities, including petitioner who was
the assistant headmaster.
• Ching telephoned petitioner sometime the first week of April and told him that Tan
was planning to sue the officers of RIS in their personal capacities. Before they hung
up, petitioner told Ching: “Okay, you too, take care and be careful talking to
[Tan], that’s dangerous.”
• Ching then called Tan and informed him that petitioner said “talking to him was
dangerous.” Insulted, Tan filed a complaint for grave oral defamation in the Office
of the City Prosecutor of Mandaluyong City against petitioner on August 21, 2003.
• Petitioner was charged with grave oral defamation.
ISSUES & ARGUMENTS

• W/N the petitioner is guilty of Grave Oral Defamation (This is the pertinent
issue for Torts)
Petitioner is NOT GUILTY of Grave Oral Defamation.
The Supreme Court held that the facts in this case does not constitute Grave Oral
Defamation. It Held that at most, petitioner could have been liable for damages under
Article 26 of the Civil Code:
NINA MEJIA
Page 17 of 528
16 Fabre vs. Court of Appeals | Mendoza grossly negligent and should be held liable for the injuries suffered by private
G.R. No. 111127, July 26, 1996| 259 SCRA 426 respondent Antonio.
• Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the
FACTS presumption that his employers, the Fabres, were themselves negligent in the
• Petitioners Fabre and his wife were owners of a minibus being used principally in selection and supervisions of their employee.
connection with a bus service for school children which they operated in Manila. • Due diligence in selection of employees is not satisfied by finding that the applicant
• The couple had a driver Cabil whom they hired in 1981, after trying him out for two possessed a professional driver's license. The employer should also examine the
weeks. His job was to take school children to and from the St. Scholastica's College applicant for his qualifications, experience and record of service. Due diligence in
in Manila. supervision, on the other hand, requires the formulation of rules and regulations for
• Private respondent Word for the World Christian Fellowship Inc. (WWCF) the guidance of employees and issuance of proper instructions as well as actual
arranged with petitioners for the transportation of 33 members of its Young Adults implementation and monitoring of consistent compliance with the rules.
Ministry from Manila to La Union and back. The group was scheduled to leave at • In the case at bar, the Fabres, in allowing Cabil to drive the bus to La Union,
5:00 o'clock in the afternoon. However, as several members of the party were late, apparently did not consider the fact that Cabil had been driving for school children
the bus did not leave until 8:00 o'clock in the evening. Petitioner Cabil drove the only, from their homes to the St. Scholastica's College in Metro Manila. They had
minibus. hired him only after a two-week apprenticeship. They had hired him only after a
• The bridge on the usual route was under repair so Cabil took a detour. He is two-week apprenticeship. They had tested him for certain matters, such as whether
unfamiliar with the route because this is his first time driving to La Union. At 11:30 he could remember the names of the children he would be taking to school, which
that night, petitioner Cabil came upon a sharp curve on the highway. The road was were irrelevant to his qualification to drive on a long distance travel, especially
slippery because it was raining, causing the bus, which was running at the speed of considering that the trip to La Union was his first. The existence of hiring
50 kilometers per hour, to skid to the left road shoulder. The bus hit the left traffic procedures and supervisory policies cannot be casually invoked to overturn the
steel brace and sign along the road and rammed the fence of one Escano, then presumption of negligence on the part of an employer.
turned over and landed on its left side, coming to a full stop only after a series of • This case actually involves a contract of carriage. Petitioners, the Fabres, did not
impacts. The bus came to rest off the road. A coconut tree which it had hit fell on it have to be engaged in the business of public transportation for the provisions of the
and smashed its front portion. Civil Code on common carriers to apply to them. The finding of the trial court and
• Several passengers were injured. Private respondent Antonio was thrown on the of the appellate court that petitioners are liable under Arts. 2176 and 2180 for quasi
floor of the bus and pinned down by a wooden seat which came down by a wooden delict, fully justify findings them guilty of breach of contract of carriage under the
seat which came off after being unscrewed. It took three persons to safely remove Civil Code.
her from this portion. She was in great pain and could not move.
Petition DENIED. Court of Appeals decision AFFIRMED.
ISSUES & ARGUMENTS
• W/N Cabil was negligent

• W/N Petitioner Spouses are liable for quasi delict making them guilty of
breach of contract of carriage
CABIL WAS NEGLIGENT. PETITIONER SPOUSES LIABLE.

• The finding that Cabil drove his bus negligently, while his employer, the Fabres,
who owned the bus, failed to exercise the diligence of a good father of the family in
the selection and supervision of their employee is fully supported by the evidence on
record.
• The fact that it was raining and the road was slippery, that it was dark, that he drove
his bus at 50 kilometers an hour when even on a good day the normal speed was
only 20 kilometers an hour, and that he was unfamiliar with the terrain, Cabil was MAUI MORALES
Page 18 of 528
17 Calalas vs. CA |Mendoza ISSUES & ARGUMENTS
GR 122039| 31 May 2000
W/N The CA erred in reversing the TC’s ruling?
FACTS
• At 10 a.m. of 23 August 1989, Eliza Jujeurche G. Sunga, then a college HOLDING & RATIO DECIDENDI
freshman majoring in Physical Education at the Siliman University, took a NO.
passenger jeepney owned and operated by Vicente Calalas. As the jeepney was
filled to capacity of about 24 passengers, Sunga was given by the conductor an The Supreme Court affirmed the 31 March 1991 decision and the 11 September 1995
“extension seat,” a wooden stool at the back of the door at the rear end of the resolution of the Court of Appeals, with the modification that the award of moral
vehicle. On the way to Poblacion Sibulan, Negros Occidental, the jeepney damages is deleted.
stopped to let a passenger off. As she was seated at the rear of the vehicle,
Sunga gave way to the outgoing passenger. Just as she was doing so, an Isuzu 1. Res Judicata does not apply
truck driven by Iglecerio Verena and owned by Francisco Salva bumped the left Sunga is not bound by the ruling in Civil Case 3490, which found the driver and the
rear portion of the jeepney. As a result, Sunga was injured. She sustained a owner of the truck liable for quasi-delict, as she was never a party to that case. Further,
fracture of the “distal third of the left tibia-fibula with severe necrosis of the the issues in Civil Case 3490 and in the present case are not the same. The issue in Civil
underlying skin.” Closed reduction of the fracture, long leg circular casting, and Case 3490 was whether Salva and his driver Verena were liable for quasi-delict for the
case wedging were done under sedation. Her confinement in the hospital lasted damage caused to Calalas’ jeepney. On the other hand, the issue in the present case is
from August 23 to September 7, 1989. Her attending physician, Dr. Danilo V. whether Calalas is liable on his contract of carriage. The principle of res judicata,
Oligario, an orthopedic surgeon, certified she would remain on a cast for a therefore, does not apply.
period of 3 months and would have to ambulate in crutches during said period.
2. Distinction between culpa aquiliana or culpa extracontractual, and culpa
• On 9 October 1989, Sunga filed a complaint for damages against Calalas before contractual
the RTC of Dumaguete City (Branch 36), alleging violation of the contract of Quasi-delict, also known as culpa aquiliana or culpa extra contractual, has as its source
carriage by the former in failing to exercise the diligence required of him as a the negligence of the tortfeasor. On the other hand, breach of contract or culpa
common carrier. Calalas, on the other hand, filed a third-party complaint contractual is premised upon the negligence in the performance of a contractual
against Francisco Salva, the owner of the Isuzu truck. The lower court rendered obligation. In quasi-delict, the negligence or fault should be clearly established because it
judgment, against Salva as third-party defendant and absolved Calalas of is the basis of the action, whereas in breach of contract, the action can be prosecuted
liability, holding that it was the driver of the Isuzu truck who was responsible merely by proving the existence of the contract and the fact that the obligor, in this case
for the accident. It took cognizance of another case (Civil Case 3490), filed by the common carrier, failed to transport his passenger safely to his destination.
Calalas against Salva and Verena, for quasi-delict, in which Branch 37 of the
same court held Salva and his driver Verena jointly liable to Calalas for the 3. Common carriers presumed at fault unless they observed extraordinary
damage to his jeepney. diligence; Burden of proof
In case of death or injuries to passengers, Article 1756 of the Civil Code provides that
• On appeal to the Court of Appeals, and on 31 March 1991, the ruling of the common carriers are presumed to have been at fault or to have acted negligently unless
lower court was reversed on the ground that Sunga’s cause of action was based they prove that they observed extraordinary diligence as defined in Articles 1733 and
on a contract of carriage, not quasi-delict, and that the common carrier failed to 1755 of the Code. The provision necessarily shifts to the common carrier the burden of
exercise the diligence required under the Civil Code. The appellate court proof.
dismissed the third-party complaint against Salva and adjudged Calalas liable for
damages to Sunga. The Court ordered Calalas tro pay Sunga (1) P50,000.00 as 4. Doctrine of proximate cause applicable only in quasi-delict, not in breach of
actual and compensatory damages; (2) P50,000.00 as moral damages; (3) contract
P10,000.00 as attorney’s fees; and (4) P1,000.00 as expenses of litigation; and (5) The doctrine of proximate cause is applicable only in actions for quasi-delict, not in
to pay the costs. Calalas’ motion for reconsideration was denied 11 September actions involving breach of contract. The doctrine is a device for imputing liability to a
1995. Hence, the petition for review on certiorari. person where there is no relation between him and another party. In such a case, the
obligation is created by law itself. But, where there is a pre-existing contractual relation
between the parties, it is the parties themselves who create the obligation, and the
Page 19 of 528
function of the law is merely to regulate the relation thus created. Herein, it is immaterial Calalas unable to overcome the presumption of negligence imposed on him for the
that the proximate cause of the collision between the jeepney and the truck was the injury sustained by Sunga, but also, the evidence shows he was actually negligent in
negligence of the truck driver. transporting passengers.
5. Articles 1733, 1755, and 1756 NCC 9. Taking of “Extension seat” cannot be considered an implied assumption of
Insofar as contracts of carriage are concerned, some aspects regulated by the Civil Code risk
are those respecting the diligence required of common carriers with regard to the safety Sunga’s taking an “extension seat” did not amount to an implied assumption of risk.
of passengers as well as the presumption of negligence in cases of death or injury to Otherwise, iIt is akin to arguing that the injuries to the many victims of the tragedies in
passengers. Article 1733 of the Civil Code provides that “Common carriers, from the our seas should not be compensated merely because those passengers assumed a greater
nature of their business and for reasons of public policy, are bound to observe risk of drowning by boarding an overloaded ferry.
extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case. Such
extraordinary diligence in the vigilance over the goods is further expressed in articles
1734, 1735, and 1746, Nos. 5,6, and 7, while the extraordinary diligence for the safety of
the passengers is further set forth in articles 1755 and 1756. “ On the other hand, Article
1755 of the Civil Code provides that “ A common carrier is bound to carry the
passengers safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with due regard for all the circumstances.” Article
1756 provides that “In case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed by articles 1733 and 1755.”
6. In violation of traffic rules; Section 54 (Obstruction of Traffic)

Herein, the jeepney was not properly parked, its rear portion being exposed about 2
meters from the broad shoulders of the highway, and facing the middle of the highway in
a diagonal angle. This is a violation of the RA 4136, as amended, or the Land
Transportation and Traffic Code, which provides in Section 54 (Obstruction of Traffic)
that “No person shall drive his motor vehicle in such a manner as to obstruct or impede
the passage of any vehicle, nor, while discharging or taking on passengers or loading or
unloading freight, obstruct the free passage of other vehicles on the highway. “
7. In violation of traffic rules; Section 32(a) (Exceeding registered capacity)

Herein,the driver took in more passengers than the allowed seating capacity of the
jeepney, a violation of Section 32(a) of the same law. Section 32 [a] (Exceeding registered
capacity) provides that “No person operating any motor vehicle shall allow more
passengers or more freight or cargo in his vehicle than its registered capacity.” The fact
that Sunga was seated in an “extension seat” placed her in a peril greater than that to
which the other passengers were exposed.
8. Driver of jeepney did not exercise utmost diligence of very cautious persons
Upon the happening of the accident, the presumption of negligence at once arose, and it
became the duty of Calalas to prove that he had to observe extraordinary diligence in the
care of his passengers. The driver of jeepney did not carry Sunga “safely as far as human
care and foresight could provide, using the utmost diligence of very cautious persons,
with due regard for all the circumstances” as required by Article 1755. Not only was JAVIN OMPOC
Page 20 of 528
18 Padua and Padua v. Robles and Bay Taxi Cab | Castro Code. The action for enforcement of civil liability based on culpa criminal section 1
G.R. No. L-40486, August 29, 1975 of Rule 111 of the Rules of Court deems simultaneously instituted with the criminal
action, unless expressly waived or reserved for a separate application by the
FACTS offended party. Article 2177 of the Civil Code, however, precludes recovery of
• In the early morning of New Year's Day of 1969 a taxicab (bearing 1968 plate no. damages twice for the same negligent act or omission.
TX-9395 and driven by Romeo N. Punzalan but operated by the Bay Taxi Cab • It is immaterial that the Paduas chose, in the first instance, an action for recovery of
owned by Gregorio N. Robles) struck ten-year old Normandy Padua on the national damages based on culpa aquiliana under articles 2176, 2177, and 2180 of the Civil
road in barrio Barretto, Olongapo City. The impact hurled Normandy about forty Code, which action proved ineffectual. Allowance of the latter application involves
meters away from the point where the taxicab struck him, as a result of which he no violation of the proscription against double recovery of damages for the same
died. negligent act or omission. For, as hereinbefore stated, the corresponding officer of
• Normandy's parents filed a complaint for damages (civil case 427-O) against the court a quo returned unsatisfied the writ of execution issued against Punzalan to
Punzalan and the Bay Taxi Cab. The city Fiscal filed with the same court an satisfy the amount of indemnity awarded to the Paduas in the civil case.
information for homicide through reckless imprudence (criminal case 1158-O). • The substance of such statement, taken in the light of the situation to which it
• TC in the civil case ordered defendant Punzalan to pay plaintiffs actual, moral, applies and the attendant circumstances, makes unmistakably clear the intention of
exemplary damages and attorney’s fees. the court to accord affirmation to the Paduas' right to the civil liability arising from
• TC in the criminal case convicted Punzalan of the crime of homicide through the judgment against Punzalan in the criminal case. Indeed, by including such
reckless imprudence. The court in its dispositive portion stated that “the civil statement in the decretal portion of the said judgment, the court intended to adopt
liability of the accused has already been determined and assessed in the civil case.” the same adjudication and award it made in the civil case as Punzalan's civil liability
• The Paduas sought execution of the judgment. This proved futile. in the criminal case.
• They instituted an action against Robles to enforce his subsidiary responsibility
under Article 103, RPC. Robles filed a motion to dismiss. Court a quo decision set aside. Case remanded to the court a quo for further proceedings.
• TC granted the motion to dismiss on the ground that the complaint states no cause
of action.
ISSUES & ARGUMENTS
W/N the judgment in the criminal case includes a determination and

adjudication of Punzalan’s civil liability arising from his criminal act upon which
Robles’ subsidiary civil responsibility may be based.
YES. Paduas' complaint in civil case states a cause of action against Robles
whose concommitant subsidiary responsibility, per the judgment in criminal
case, subsists.
• The said judgment states no civil liability arising from the offense charged against
Punzalan. However, a careful study of the judgment in question, the situation to
which it applies, and the attendant circumstances, the court a quo, on the contrary,
recognized the enforceable right of the Paduas to the civil liability arising from the
offense committed by Punzalan and awarded the corresponding indemnity
therefore.
• Civil liability coexists with criminal responsibility. In negligence cases the offended
party (or his heirs) has the option between an action for enforcement of civil liability
based on culpa criminal under article 100 of the Revised Penal Code and an action
for recovery of damages based on culpa aquiliana under article 2177 of the Civil TIN OCAMPO-TAN
Page 21 of 528
19 Atlantic Gulf and Pacific Company of Manila Inc. vs CA | Regalado
G.R. No. 114841-42 August 23, 1995 • Evidence on record support findings of trial and appellate courts that petitioner
was liable. The fact that the appellate court adopted the findings of the trial court, as in
FACTS this case, makes the same binding upon the Supreme Court, for the factual findings of
said appellate court are generally binding on the latter. For that matter the findings of the
• Atlantic Gulf commenced construction of a steel fabrication plant in Bauan, Court of Appeals by itself, and which are supported by substantial evidence, are almost
Batangas which necessitated dredging operations at the Batangas Bay, in an area beyond the power of review by the Supreme Court.
adjacent to the property of private respondents. • Only questions of law may be raised on certiorari under Rule 45. It is not the
• Two actions for damages were filed by different respondents and were function of the SC to analyze or weigh evidence all over again. Its jurisdiction is limited
consolidated as the plaintiffs therein intended to present common evidence to reviewing errors of law that might have been committed by the lower court. Unless
against defendant, by reason of the virtual identity of the issues involved in the findings are glaringly erroneous.
both cases. • However, CA committed reversible error when it increased damages. Only the
• Private respondents alleged that petitioner’s personnel and heavy equipment petitioner appealed and the respondents are presumed to be satisfied with the judgment.
trespassed, damaged, and made into depots and parking lots without payment The entrenched procedural rule in this jurisdiction is that a party who has not himself
of rent the land owned by the respondents. appealed cannot obtain from the appellate court any affirmative relief other than those
• Moreover, the sea silt and water overflowed and were deposited upon their granted in the decision of the lower court.
land. Consequently, the said property which used to be agricultural lands
principally devoted to rice production and each averaging an annual net harvest Judgment modified.
of 75 cavans, could no longer be planted with palay as the soil became infertile,
salty, unproductive and unsuitable for agriculture.
• Petitioner denied allegations about its personnel and heavy equipment. And it
further contended that the sea silt and water was due to the floods and heavy
rains of typhoon “Ruping”
• Trial court ruled in favor of respondents ordering Atlantic to pay damages.
Upon appeal to the CA, judgment was affirmed with modifications increasing
the amount of damages.
• Petitioner is now asking for nullification or at least partial modification on the
grounds of double recovery.
ISSUES & ARGUMENTS
W/N the awards to the respondents constitute double recovery and thus,
prohibited by the NCC.
Petitioners: Article 2177 of the Civil Code states that: "the plaintiff cannot
recover damages twice for the same act or omission of the defendant"
W/N the CA committed grave abuse in discretion by granting excessive damages
SC may not reverse a judgment on a Certiorari case under Rule 45. But CA committed
grave abuse of discretion when it increased the damages MARICE PACHECO
Page 22 of 528
20 Vergara vs. CA | Padilla
G.R. No. 77679, September 30, 1987 |
FACTS
• On, 5 August 1979 in Gapan, Nueva Ecija, Martin Belmonte, while driving a cargo
truck belonging to Vergara, rammed "head-on" the store-residence of the Amadeo
Azarcon, causing damages thereto which were inventoried and assessed at
P53,024.22
• Vergara filed a third party complaint against Travellers Insurance and Surety
Corporation, alleging that said cargo truck involved in the vehicular accident,
belonging to the petitioner, was insured by the third party defendant insurance
company and asking that he paid paid whatever the court would order him to pay to
Azarcon
• The trial court and the court of appeals ordered Vergara jointly and severally with
Travellers Insurance and Surety Corporation to pay to Azarcon (a) P53,024.22 as
actual damages; (b) P10,000.00 as moral damages; (c) P10,000.00 as exemplary
damages; and (d) the sum of P5,000.00 for attorney's fees and the costs. On the
third party complaint, the insurance company was sentenced to pay to the petitioner
the following: (a) P50,000.00 for third party liability under its comprehensive
accident insurance policy; and (b) P3,000.00 for and as attorney's fees.
ISSUES & ARGUMENTS
W/N Vergara is liable to pay damages.
Yes, he is liable.
• The requisites (1) damages to the plaintiff; (2) negligence, by act or omission, of
which defendant, or some person for whose acts he must respond, was guilty; and
(3) the connection of cause and effect between such negligence and the damages.
• The acts which caused the damages to Azarcon can be attributed to Vergara. The
fact that the vehicular accident occurred was well established by the police report
describing the same. The contention of Vergara that the accident occurred because
of mechanical failure of the brakes cannot be considered fortuitous and could have
been prevented. Also, Vergara failed to adduce evidence to dispute the presumption
of negligence in the selection of his driver.
JAN PORTER
Page 23 of 528
21 Natividad V. Andamo Emmanuel R. Andamo vs IAC| Fernan presence of damage to the petitioners, the act or omission of respondent
G.R. No. 74761 November 6, 1990| corporation supposedly constituting fault or negligence, and the causal
connection between the act and the damage, with no pre-existing contractual
FACTS obligation between the parties make a clear case of a quasi delict or culpa aquiliana.
• Spouses Andamo are the owners of a parcel of land which is adjacent to that of • Article 2176, whenever it refers to "fault or negligence", covers not only acts
private respondent, Missionaries of Our Lady of La Salette, Inc., a religious "not punishable by law" but also acts criminal in character, whether intentional
corporation. and voluntary or negligent. Consequently, a separate civil action lies against the
• Within the land of respondent corporation, waterpaths and contrivances, offender in a criminal act, whether or not he is criminally prosecuted and found
including an artificial lake, were constructed, which allegedly inundated and guilty or acquitted, provided that the offended party is not allowed, (if the
eroded petitioners' land, caused a young man to drown, damaged petitioners' tortfeasor is actually charged also criminally), to recover damages on both
crops and plants, washed away costly fences, endangered the lives of petitioners scores, and would be entitled in such eventuality only to the bigger award of the
and their laborers during rainy and stormy seasons, and exposed plants and two, assuming the awards made in the two cases vary.
respondent.
ISSUES & ARGUMENTS
Yes
plaintiff, (b) fault or negligence of the defendant, or some other person
for whose acts he must respond; and (c) the connection of cause and
effect between the fault or negligence of the defendant and the damages
incurred by the plaintiff.
respondent corporation. Indeed, the recitals of the complaint, the alleged KATH MATIBAG
Page 24 of 528
22 FGU Insurance vs. CA|Bellosillo relationship between respondent FILCAR and Dahl-Jensen. Clearly, petitioner has
G.R. No. 118889, March 23, 1998 | 287 SCRA 718 no cause of action against respondent FILCAR on the basis of quasi-delict; logically,
its claim against respondent FORTUNE can neither prosper.
FACTS • Article 2180, par 5 Civil Code: “… Employers shall be liable for the damages
• On 21 April 1987, two Mitsubishi Colt Lancers collided along EDSA at around caused by their employees and household helpers acting within the scope of their
3AM. At that time, the car owned by Soriano was being driven by Jacildone. The assigned tasks, even though the former are not engaged in any business or
other car was owned by FILCAR Transport, Inc. and was being driven by Dahl- industry.… ”
Jansen, as lessee. Said Dahl-Jensen, being a Danish tourist, did not have Philippine • The liability imposed by Art. 2180 arises by virtue of a presumption juris tantum of
driver’s license. Dahl-Jensen had swerved to his right lane, thereby hitting the left negligence on the part of the persons made responsible thereunder, derived from
side of the car of Soriano. their failure to exercise due care and vigilance over the acts of subordinates to
• Petitioner FGU Insurance paid Soriano P25,382.20 pursuant to the insurance prevent them from causing damage. 7 Yet, Art. 2180 is hardly applicable because
contract it had with the latter. After which, it sued Dahl-Jensen, FILCAR, and FILCAR, being engaged in a rent-a-car business was only the owner of the car
FORTUNE Insurance for quasi-delict before the RTC of Makati. leased to Dahl-Jensen. As such, there was no vinculum juris between them as
• Summons was not served on Dahl-Jensen; and upon motion of the petitioner, he employer and employee.
was later dropped from the complaint. The RTC dismissed the complaint on the Petition denied. CA affirmed.
ground that petitioner had failed to substantiate its claim for subrogation.
• The CA affirmed the RTC decision, although on a different ground, i.e. that only
the fault and negligence of Dahl-Jensen was proved, and not that of FILCAR.
Hence this appeal.
ISSUES & ARGUMENTS
W/N FILCAR and FORTUNE are liable for damages suffered by a third person
even though the vehicle was leased to another.
FILCAR AND FORTUNE ARE NOT LIABLE. (please focus on the underlined
doctrines for: our concern for this case is PRIMARY LIABILITY)
• Art. 2176 of the Civil Code which states: "Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict .
..."
• To sustain a claim based thereon, the following requisites must concur: (a) damage
suffered by the plaintiff; (b) fault or negligence of the defendant; and, (c) connection
of cause and effect between the fault or negligence of the defendant and the damage
incurred by the plaintiff. 6
• The Supreme Court agreed with the holding of the CA in saying that only the fault
and negligence of Dahl-Jensen had been proved, since the only cause of the damage
was due to his swerving to the right lane, in which FILCAR had no participation.
• Art. 2184 of the NCC provides: "In motor vehicle mishap, the owner is solidarily
liable with his driver, if the former, who was in the vehicle, could have by the
use of due diligence, prevented the misfortune . . . . If the owner was not in the
motor vehicle, the provisions of article 2180 are applicable." Obviously, this
provision of Art. 2184 is neither applicable because of the absence of master-driver CHRISSIE MORAL
Page 25 of 528
23 Equitable Leasing Corp v Lucita Suyom et al | Panganiban Equitable. Non-registration is the fault of the petitioner, thus they cannot escape
GR NO. 143360, September 5, 2002 | liability to prejudice the rights (to damages) of the respondents.
• Side note: (on Moral Damages) The SC also justified that there was causal
FACTS connection between the factual basis of the respondent’s claim and Tutor’s wrongful
• June 4, 1991: Equitable Leasing Corp had a lease agreement with for a Fuso Road act. (3 element to sustain a claim on quasi-delict: a)damage suffered by the plaintiff b)fault or
Tractor with Ecatine (as the lessee), who according to the agreement will eventually negligence of the defendant c)causal connection between the fault or negligence of the defendant and
own the tractor, upon full payment by Edwin Lim of Ecatine. the damage incurred by the plaintiff) This case falls squarely under 2219(2) which provides
• December 9, 1992: Lim completed the payment, and thus a Deed of Sale was drawn for payment of moral damages in cases of quasi-delict. Moral damages are paid to
between Ecatine and Equitable, however the deed was not registered in the LTO. alleviate the moral suffering/mental anguish caused by the act or omission of the
• July 17, 1994: the said Tractor, driven by Raul Tutor, employee of Ecatine, rammed defendant. Having established the liability of Tutor and the Equitable as an
into the house cum store of Myrna Tamayo in Tondo Manila. A portion of the employer, respondents have successfully shown the existence of the factual basis for
house was destroyed, 2 died while 4 more were injured. the award (injury to plaintiffs) and its causal connection to the tortious acts of
• Tutor was charged and convicted of reckless imprudence resulting to homicide and Tutor. No proof of pecuniary loss is needed to justify the moral damages. The
multiple physical injuries in the MTC. amount of indemnity will be left to the discretion of the court.
• Upon verification with the LTO, Equitable was found to be the registered owner of
the tractor. Equitable then received a complaint for damages, but they denied
liability claiming the tractor was already sold to Ecatine back in 1992.
• RTC and CA held: Equitable is liable, hence this appeal.
ISSUES & ARGUMENTS

• W/N Equitable remains liable based on quasi-delict for the negligent act of
a driver who was not the employee of the petitioner
EQUITABLE IS LIABLE
• The negligent employee’s civil liability is based on Art 2176 (NCC) and/or Art 100
(RPC), while employer’s liability is based on Art 103 of the RPC: where employers
are held subsidiary liable for felonies committed by their employees in the discharge
of latter’s duties. This liability attaches when the convicted employee turns out to be
insolvent.
• Art 2176 in relation to 2180, an action predicated on quasi-delict maybe instituted
against the employer for an employee’s act or omission. This liability for the
negligent conduct of a subordinate is direct and primary (meaning SOLIDARY),
with the possible defense of due diligence in the selection and supervision of
employees. In the case at bar, Tutors criminal liability has been established, but
since Tutor cannot be found, the victims recourse is to file damage claims against
Tutor’s employer. Unfortunately for Equitable, they are the registered owners of the
tractor and jurisprudence provides, the registered owners are deemed to be the
employer of the erring driver and thus civilly liable. The sale between Ecatine and
Equitable, being unregistered, will not bind/prejudice, a third person, in this case
the victim-respondents. Equitable cannot use the defense that Tutor was not his
employee. As to a third person, the registered owner is the employer, and Ecatine,
although the actual employer of Tutor, is deemed to be merely an agent of
DIANE LIPANA
Page 26 of 528
24 Cinco vs. Canonoy |Melencio-Herera, Art. 2177. Responsibility for fault or negligence under the preceding article is entirely
G.R. No. L-33171 May 31, 1979| 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
FACTS defendant. (n)
• Petitioner Cinco herein filed a Complaint for the recovery of damages on account of Sec. 2. Independent civil action. — In the cases provided for in Articles 31, 32, 33, 34
a vehicular accident involving his automobile and a jeepney driven by Romeo Hilot and 2177 of the Civil Code of the Philippines, Are independent civil action entirely
and operated by Valeriana Pepito and Carlos Pepito, the last three being the private separate and distinct from the c action, may be brought by the injured party during the
respondents in this suit. Subsequent thereto, a criminal case was filed against the pendency of the criminal case, provided the right is reserved as required in the preceding
driver, Romeo Hilot, arising from the same accident. At the pre-trial in the civil case, section. Such civil action shag proceed independently of the criminal prosecution, and
counsel for private respondents moved to suspend the civil action pending the final shall require only a preponderance of evidence.
determination of the criminal suit, invoking Rule 111, Section 3 (b) of the Rules of
Court, which provides: (b) After a criminal action has been commenced. no civil In the light of the foregoing disquisition, we are constrained to hold that respondent
action arising from the same offense can be prosecuted, and the same shall be Judge gravely abused his discretion in upholding the Decision of the City Court of
suspended, in whatever stage it may be found, until final judgment in the criminal Mandaue City, Cebu, suspending the civil action based on a quasi-delict until after the
proceeding has been rendered; criminal case is finally terminated. Having arrived at this conclusion, a discussion of the
• The City Court of Mandaue City ordered the suspension of the civil case. other errors assigned becomes unnecessary.
Petitioner's Motion for Reconsideration thereof, having been denied, petitioner
elevated the matter on certiorari to the Court of First Instance of Cebu, alleging that
the City Judge had acted with grave abuse of discretion in suspending the civil action
for being contrary to law and jurisprudence.
• Respondent Judge Cannony dismissed the Petition for certiorari on the ground that
there was no grave abuse of discretion on the part of the City Court in suspending
the civil action inasmuch as damage to property is not one of the instances when an
independent civil action is proper; that petitioner has another plain, speedy, and
adequate remedy under the law, which is to submit his claim for damages in the
criminal case; that the resolution of the City Court is interlocutory and, therefore,
certiorari is improper; and that the Petition is defective inasmuch as what petitioner
actually desires is a Writ of mandamus. Petitioner's Motion for Reconsideration was
denied by respondent Judge.
ISSUES & ARGUMENTS

• W/N RESPONDENT JUDGE MATEO CANONOY, ERRED IN HOLDING
THAT THE TRIAL OF THE CIVIL CASE NO. 189 FILED IN THE CITY
COURT OF MANDAUE SHOULD BE SUSPENDED UNTIL AFTER A
FINAL JUDGMENT IS RENDERED IN THE CRIMINAL CASE.
The respondent judge erred in holding that the civil case should be suspended until after
the final judgment is rendered in the criminal case.
Liability being predicated on quasi-delict the civil case may proceed as a separate and
independent civil action, as specifically provided for in Article 2177 of the Civil Code.
VP PADILLA
Page 27 of 528
25 Virata vs. Ochoa | Fernandez
G.R. No. L-46179, January 31, 1978
FACTS
• Arsenio Virata died as a result of having been bumped while walking along Taft
Avenue by a passenger jeepney driven by Maximo Borilla and registered in the name
of Victoria Ochoa.
• An action for homicide through reckless imprudence was instituted against Maximo
Borilla in the CFI of Rizal.
• Atty. Francisco, the private prosecutor, made a reservation to file separately the civil
action for damages against the driver for his criminal liability, which he later on
withdrew and presented evidence on the damages.
• The Heirs of Arsenio Virata again reserved their right to institute a separate civil
action.
• They commenced an action for damages based on quasi-delict against the driver
Maximo Borilla and the registered owner of the vehicle, Victoria Ochoa.
• Private respondents filed a motion to dismiss on the ground that there is another
action pending for the same cause.
• The CFI acquitted Borilla on the ground that he caused the injury by accident. The
motion to dismiss was granted.
ISSUES & ARGUMENTS

• W/N the Heirs of Arsenio Virata can prosecute an action for damages based
on quasi-delict against Maximo Borilla and Victoria Ochoa, driver and
owner, respectively on the passenger jeepney that bumped Arsenio Virata?
YES. IT IS AN EQUITABLE MORTGAGE.

• 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. What is
prohibited by Article 2177 of the Civil Code is to recover twice for the same
negligent act.
• In this case, the petitioners are not seeking to recover twice for the same negligent
act. Before the Criminal Case was decided, they manifested in the said case that they
were filing a separate civil action for damages against the owner and driver of the
passenger jeepney based on quasi-delict.
• 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’.
• The source of damages sought to be enforced in the Civil Case is quasi-delict, not an
act or omission punishable by law. Under Art. 1157 of the Civil Code, quasi-delict
and an act or omission punishable by law are two different sources of obligation.
• Moreover, for petitioners to prevail in the Civil Case, they have only to establish
their cause of action by preponderance of evidence. FRANCIS ESPIRITU
Page 28 of 528
26 Jarantilla vs. CA | Regalado petition for mandamus to compel the trial court to include such civil liability in the
G.R. No. 80194, March 21, 1989 | 171 SCRA 429 judgment of acquittal.
• Sing, filed a separate civil aciton after such acquittal. This is allowed under Article 29
FACTS of the Civil Code. In Lontoc vs. MD Transit & Taxi Co., Inc., et al.: “In view of the fact
• Jose Kuan Sing was side-swiped by a vehicle in the evening of July 7, 1971 in lznart that the defendant-appellee de la Cruz was acquitted on the ground that 'his guilt was
Street, Iloilo City. Said vehicle which figured in the mishap, a Volkswagen car, was not proven beyond reasonable doubt' the plaintiff-appellant has the right to institute a
then driven by petitioner Edgar Jarantilla and that private respondent sustained separate civil action to recover damages from the defendants-appellants. The well-
physical injuries as a consequence. settled doctrine is that a person, while not criminally liable may still be civilly liable.
• Jarantilla was accordingly charged before the then City Court of Iloilo for serious 'The judgment of acquittal extinguishes the civil liability of the accused only when it
physical injuries thru reckless imprudence in Criminal Case No. 47207. Sing, as the includes a declaration that the facts from which the civil liability might arise did not
complaining witness therein, did not reserve his right to institute a separate civil exist'. When the accused in a criminal prosecution is acquitted on the ground that
action and he intervened in the prosecution of said criminal case through a private his guilt has not been proved beyond reasonable doubt, a civil action for damages for the
prosecutor. same act or omission may be instituted. Such action requires only a preponderance
• Jarantilla was acquitted in said criminal case "on reasonable doubt". of evidence .
• Sing filed another complaint against the petitioner in the former CFI of Iloilo, • The civil liability sought to be recovered through the application of Article 29 is no
docketed therein as Civil Case No. 9976, and which civil action involved the same longer that based on or arising from the criminal offense. Under such
subject matter and act complained of in Criminal Case No. 47027 circumstances, the acquittal of the accused foreclosed the civil liability based on
• Jarantilla alleged as defenses that the Sing had no cause of action and, , that the Article 100 of the Revised Penal Code which presupposes the existence of criminal
latter's cause of action, if any, is barred by the prior judgment in Criminal Case No. liability or requires a conviction of the offense charged. Divested of its penal
47207 inasmuch as when said criminal case was instituted the civil liability was also element by such acquittal, the causative act or omission becomes in effect a quasi-
deemed instituted since therein plaintiff failed to reserve the civil aspect. delict, hence only a civil action based thereon may be instituted or prosecuted
• After trial, the court below rendered judgment on May 23, 1977 in favor of Sing. thereafter, which action can be proved by mere preponderance of evidence.
Hence, this appeal by Jarantilla. Complementary to such considerations, Article 29 enunciates the rule, as already
stated, that a civil action for damages is not precluded by an acquittal on reasonable
ISSUES & ARGUMENTS doubt for the same criminal act or omission.
• W/N Sing can institute a separate action for civil damages based on the • Since this action is based on a quasi-delict, the failure of the respondent to
same act without reserving such right to institute such action in the criminal reserve his right to file a separate civil case and his intervention in the
case criminal case did not bar him from filing such separate civil action for
damages.
Sing can file a separate civil action for damages despite failure to reserve such
right in the previous criminal case
• Apropos to such resolution is the settled rule that the same act or omission can
create two kinds of liability on the part of the offender, that is, civil liability ex delicto
and civil liability ex quasi delicto. Since the same negligence can give rise either to a
delict or crime or to a quasi-delict or tort, either of these two types of civil liability
may be enforced against the culprit, subject to the caveat under Article 2177 of the
Civil Code that the offended party cannot recover damages under both types of
liability.
• In the case under consideration, Sing participated and intervened in the prosecution
of the criminal suit against Jarantilla. Under the present jurisprudential milieu, where
the trial court acquits the accused on reasonable doubt, it could very well make a
pronounce ment on the civil liability of the accused and the complainant could file a
GINO CAPATI
Page 29 of 528
27 Atlantic Gulf and Pacific Co. of Manila, Inc. vs. CA, Carlito Castillo and Heirs that petitioner’s heavy equipment “used to utilize respondents’ land as a depot or
of Castillo | Regalado parking lot of these equipment without paying any rent therefor.”
G.R. No. 114841-42, October 20, 1995 | • It is therefore clearly apparent that petitioner was guilty of two culpable
transgressions on the property rights of respondents, that is:
FACTS o 1. For the ruination of the agricultural fertility or utility of the soil of
• Sometime in 1982, petitioner company commenced the construction of a steel their property
fabrication plant in the Municipality of Bauan, Batangas, necessitating dredging o 2. For the unauthorized use of said property as a dump rile or depot
operations at the Batangas Bay in an area adjacent to the real property of private for petitioner’s heavy equipment and trucks
• Consequently, both courts correctly awarded damages both for the destruction of
respondents. the land and for the unpaid rentals, or more correctly denominated, for the
• Private respondents alleged that during the on-going construction of its steel and reasonable value of its use and occupation of the premises.
fabrication yard, petitioner's personnel and heavy equipment trespassed into the
adjacent parcels of land belonging to private respondents without their consent.
These heavy equipment damaged big portions of private respondents' property
which were further used by petitioner as a depot or parking lots without paying any
rent therefor, nor does it appear from the records that such use of their land was
with the former's conformity.
• Respondents further alleged that as a result of the dredging operation of petitioner
company, the sea silt and water overflowed and were deposited upon their land.
Consequently, the said property which used to be agricultural lands principally
devoted to rice production and each averaging an annual net harvest of 75 cavans,
could no longer be planted with palay as the soil became infertile, salty,
unproductive and unsuitable for agriculture.
• Petitioner now moves for the reconsideration of the judgment promulgated in this
case on August 23, 1995 contending that private respondents are permitted
thereunder to recover damages twice for the same act of omission contrary to
Article 2177 of the Civil Code.
ISSUES & ARGUMENTS
• W/N RESPONDENTS WERE PERMITTED TO RECOVER DAMAGES
TWICE FOR THE SAME ACT?
Petitioner: Affirmance of the judgment of the trial court granting damages for both
the “damage proper to the land” and “rentals for the same property” runs afoul of
the proscription in Article 2177.
NO, THERE WAS NO RECOVERY OF DAMAGES TWICE FOR THE SAME

ACT.
• Petitioner overlooks the fact that private respondents specifically alleged that as a
result of petitioner’s dredging operations the soil of the former’s property “became
BON ARCILLA
infertile, salty, unproductive and unsuitable for agriculture.” They further averred
Page 30 of 528
28 CANCIO Jr. vs ISIP
FACTS
• Cancio filed three cases of violation of BP 22 and three cases of Estafa against
Isip for issuing the following checks without funds.
• The first case was dismissed by the Provincial Prosecutor on the ground that
the check was deposited with the drawee bank after 90 days from the date of
the check. The other two cases were dismissed by the MTC of Pampanga for
failure to prosecute.
• For the three pending estafa cases, the prosecution moved to dismiss the estafa
cases after failing to present its second witness.
• The prosecution reserved its right to file a separate civil action arising from the
said criminal cases. The MTC granted the motions.
• Cancio filed a case for collection of sum of money, seeking to recover the
amount of the checks.
• Isip filed a motion to dismiss on the ground that the action is barred by the
doctrine of Res Judicata. Isip also prayed to have Cancio in contempt for
forum shopping.
• The trial court ruled in favor of Isip by stating that the action is barred by Res
Judicata and the filing of said civil case amounted to forum shopping.
ISSUES & ARGUMENTS
Whether the dismissal of the estafa cases against the respondents bars the institution of a
civil action for collection of the value of the checks subject of the estafa cases.
No.
The trial court erred in dismissing Cancio’s complaint for collection of the
value of the checks issued by respondent. Being an independent civil action
which is separate and distinct from any criminal prosecution and which require
no prior reservation for its institution, the doctrine of Res Judicata and forum
shopping will not operate to bar the same.
SATURDAY ALCISO
Page 31 of 528
29 Picart vs. Smith| Street • The control of the situation had then passed entirely to Smith, and it was his duty to
March 15, 1918 | 37 Phil 809 bring his car to an immediate stop or seeing no other persons on the bridge, to take
the other side and pass sufficiently far away from the horse to avoid collision. There
FACTS was an appreciable risk that a horse not acquainted with vehicles would react that
• Amando Picart seeks to recover from the defendant Frank Smith the sum of Php way.
31,100 as damages alleged to have been caused by an automobile driven by Smith. • The Test to Determine the Existence of Negligence in a particular case may be
The incident happened on Dec 12, 1912, at the Carlatan Bridge, San Fernando, La stated as follows: Did the defendant in doing the alleged negligent act use that
Union. reasonable care and caution which an ordinarily prudent person would have used
• Picart was riding on his pony aver the said bridge. Before he had gotten half way the same situation? If not then he is guilty of negligence.
across, Smith approached from the opposite direction driving his vehicle at 10 to 12 • The law in effect adopts the standard supposed to be supplied by the imaginary
miles per hour. conduct of the discreet paterfamilias of the Roman Law. The existence of
• Smith blew his horn to give warning as he observed that the man was not observing negligence in a given case is not determined by reference to the personal judgment
rules of the road. Smith continued his course and made two more blasts. of the actor in the situation before him. The law considers what would be reckless,
• Picart was perturbed by the rapidity of the approach that he pulled his pony to the blameworthy or negligent in the man of ordinary intelligence and prudence and
right side of the railing. determines liability by that.
• As the automobile approached, Smith guided the automobile to its left, that being • A prudent man, placed in the position of Smith in the Court’s opinion would have
the proper side of the road for the machine. recognized that the course which he was pursuing was fraught with risk and would
• Smith noticed that the pony was not frightened so he continued without diminution therefore have foreseen harm to the horse and the rider as a reasonable consequence
of speed. of that course.
• When he learned that there was no possibility for the pony to go on the other side,
Smith drove his car to the right to avoid hitting the pony, but in so doing the vehicle
passed in a close proximity to the horse that it became frightened and turned its
belly across the bridge with its head towards the railing.
• The horse was struck on the hock of the left hind leg by the flange of the car and
the limb was broken.
• The horse fell and its rider was thrown off with some violence.
• It showed that the free space where the pony stood between the automobile and the
railing was probably less than one half meters.
• The horse died and Picart received contusions which caused temporary
unconsciousness and required medical attention for several days.
ISSUES & ARGUMENTS
Whether or not Smith was guilty of negligence that gives rise to a civil obligation to
repair the damage done to Picart and his pony.
Yes, the court ruled that Smith that he is liable to pay Picart the amount of P200. The
sum is computed to include the value of the horse, medical expenses of the plaintiff, the
loss or damage occasioned to articles of his apparel.
• In the nature of things, this change in situation occurred while the automobile was
still some distance away. From this moment it was no longer possible for Picart to
escape being run down by going to a place for greater safety. SATURDAY ALCISO
Page 32 of 528
30 Citytrust Banking Corp. vs. IAC and Emme Herrero| Vitug
G.R. No. 84281, May 27, 1994| 232 SCRA 559
FACTS
• Complaint filed by private respondent Emme Herrero for damages against
petitioner Citytrust.
• In her complaint, respondent averred that she a businesswoman, made regular
deposits. On May 15, 1980, she deposited the amount of P31,500 to cover 6
postdated checks.
• However, in filling up the deposit slip, she omitted a zero in her account number
but she did write her full name. Subsequently her checks were dishonored due to
insufficient funds.
• The trial court dismissed the complaint and the CA reversed and awarded nominal
and temperate damages and attorney’s fees.
ISSUES & ARGUMENTS
W/N CITYTRUST WAS NEGLIGENT AND THUS LIABLE FOR

DAMAGES?
YES, CITYTRUST NEGLIGENT

• Banking is a business affected with public interest and because of the nature of its
functions, the bank is under obligation to treat the accounts of its depositors with
meticulous care, always having in mind the fiduciary nature of their relationship. The
teller should have noticed that there were only seven numbers instead of eight.
Besides, the use of numbers is simply for the convenience of the bank and the
depositor’s name should still be controlling.
• To post a deposit in somebody else’s name despite the name of the depositor clearly
written on the deposit slip is indeed sheer negligence which could have easily been
avoided if defendant bank exercised due diligence and circumspection in the
acceptance and posting of plaintiff’s deposit.
• Petitioner bank cannot disclaim liability for the negligence of its employees, because
it failed to prove not only that it exercised due diligence to prevent damage but it
was not negligent in the selection and supervision of its employees. (Go vs. IAC)
• The CA however erred in awarding nominal and temperate damages concurrently,
the two are incompatible. Nominal damages are merely to recognize the violation of
a right and not to indemnify. Temperate damages are designed to indemnify one for
pecuniary loss the amount of which cannot be proved with reasonable certainty.
Only nominal damages are warranted in this case.
BON ARCILLA
Page 33 of 528
31 Metrobank vs. CA | Romero • The damage to private respondents' reputation and social standing entitles them to
G.R. No. 112756 October 26, 1994 | 237 SCRA 761 moral damages. Moral damages include physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock, social
FACTS humiliation and similar injury.
• Katigbak is the president and director of RBPG, which maintain an account in • Temperate or moderate damages which are more than nominal but less than
Metrobank (MBTC) compensatory damages may be recovered when the court finds that some pecuniary
• MBTC received from the Central Bank a credit memo for 304k, to be credited to loss has been suffered but its amount cannot, from the nature of the case, be proved
RBPG’s account with certainty.
• Due to the negligence of the bank’s messenger, such was not credited promptly • The carelessness of petitioner bank, aggravated by the lack of promptness in
• Katigbak issued checks in the amount of 300k payable to Dr. Felipe Roque and Mrs. repairing the error and the arrogant attitude of the bank officer handling the matter,
Eliza Roque for 25k justifies the grant of moral damages, which are clearly not excessive and
• Checks bounced as funds were insufficient to cover checks unconscionable.
• Was berated by Roque’s for issuing bum checks so Katigbak had to cut short her
HK vacation to settle matters with MBTC
• RBPG and Isabel Katigbak filed a civil case against the MBTC for damages
ISSUES & ARGUMENTS
Whether or not private respondents RBPG and Isabel Rodriguez are l

egally entitled to moral damages and attorney's fees
Assuming that they are so entitled, whether or not the amounts awarded
are excessive and unconscionable
There is no merit in MBTC’s argument that it should not be considered

negligent, much less be held liable for damages on account of the inadvertence of
its bank employee as Article 1173 of the Civil Code only requires it to exercise the
diligence of a good pater familias
• The dishonoring of the RBPG checks committed through negligence by the

petitioner bank and was rectified only nine days after receipt of the credit memo.
• Clearly, petitioner bank was remiss in its duty and obligation to treat private
respondent's account with the highest degree of care, considering the fiduciary
nature of their relationship. The bank is under obligation to treat the accounts of its
depositors with meticulous care, whether such account consists only of a few
hundred pesos or of millions.
• Responsibility arising from negligence in the performance of every kind of
obligation is demandable
• While the bank's negligence may not have been attended with malice and bad faith,
nevertheless, it caused serious anxiety, embarrassment and humiliation to private
respondents for which they are entitled to recover reasonable moral damages.
GINO CAPATI
Page 34 of 528
32 Far East Bank and Trust Company vs. Estrella O. Querimit
GR 148582, January 163, 2002/ Mendoza
Wherefore the decision of the CA is affirmed that they pay the $60,000
FACTS deposit plus P50,000 moral damages.
• Estrella Querimit (Respondent) opened a dollar savings account in FEBTC’s

Harison branch for which she was issued 4 $15,000 Certificates of Deposit. It
all valued $60,000.
o These certificates were to mature in 60 days and payable to bearer at
4.5% per annum.
• In 1989, she accompanied her husband Dominador to the United States for
medical treatment. In January 2 January 1993, her husband died and she
returned to the Philippines.
• She went to FEBTC and tried to withdraw her dollar deposit.
• She was told though by FEBTC that her husband had withdrawn the
money in the deposit
ISSUES & ARGUMENTS
Is FEBTC guilty of Negligence and liable for the amount in the deposit?
Yes failed to act due diligence.
• A Certificate of Deposit is defined as a written acknowledgment by a bank or

banker of the receipt of a sum in money on deposit which the bank or banker
promises to pay the depositor to the order of the depositor (NEGO!!!)
o A relation of debtor-creditor is created.
• The bank alleges that it paid the husband and did not ask for the surrender of
the said certificate of deposit for Mr. Querimit was one of the senior
managers of the bank.
o Even though after Mr. Querimit retired, the bank did not show effort
to collect the said certificates from him.
o This accommodation as well was mad ein violation if the bank’s
policies and procedure.
• FEBTC thus failed to exercise the degree of diligence required by the nature of
its business
o Since the business of banking is impressed with public interest, it
should exercise the degree of diligence MORE than that of a good
father of a family.
• They fiduciary nature of their relationship with their depositors requires
them to treat the accounts with the highest degree of care.
JOFI CUENCA
Page 35 of 528
33 Reyes vs. CA | De Leon, Jr. draft, and PRCI as the buyer of the same, with the 20th Asian Racing Conference
G.R. No. 118492, August 15, 2001 | 363 SCRA 51 Secretariat as the payee thereof.
FACTS THE EVIDENCE SHOWS THAT FEBTC DID EVERYTHING WITHIN ITS
• In view of the 20th Asian Racing Conference in Sydney, Australia, the Philippine POWER TO PREVENT THE DISHONOR OF THE SUBJECT FOREIGN
Racing Club, Inc. sent four delegates to the said conference. EXCHANGE DEMAND DRAFT.
• Petitioner Reyes, as vice-president for finance, racing manager, treasurer, and • FEBTC did not cause an erroneous transmittal of its SWIFT cable message to
director of PRCI, sent Godofredo Reyes, the club’s chief cashier, to the respondent Westpac-Sydney. It was the erroneous decoding of the cable message on the part of
Far East Bank and Trust Company to apply for a foreign exchange demand draft in Westpac-Sydney that caused the dishonor of the subject foreign exchange demand
Australian dollars. draft. As a result, Westpac-Sydney construed the said cable message as a format for
• Godofredo went to respondent’s Buendia Branch to apply for a demand draft, a letter credit and not for a demand draft.
which was initially denied because FEBTC did not have an Australian dollar account • The erroneous reading of its cable message to Westpac-Sydney by an employee of
in any bank in Sydney. the latter could have been foreseen by the respondent bank.
• The bank’s assistant cashier informed Godofredo of a roundabout way of effecting • Prior to the first dishonor, FEBTC advised Westpac-New York to honor the
the requested remittance to Sydney by having FEBTC draw a demand draft against reimbursement claim of Westpac-Sydney.
Westpac Bank in Sydney and have the latter reimburse itself from the US dollar • After the dishonor, FEBTC reconfirmed the authority of Westpac-New York to
account of FEBTC in Westpac Bank in New York. debit its dollar account and also sent two more cable messages inquiring why the
• Reyes, acting through Godofredo, agreed to this arrangement, which was approved demand draft was dishonored.
by FEBTC.
• However, upon due presentment of the foreign exchange demand draft, the same
was dishonored, with the notice of dishonor stating the following: No account held
with Westpac.
• Petitioners filed a complaint for damages against respondent FEBTC, claiming that
they were exposed to unnecessary shock, social humiliation, and deep mental
anguish in a foreign country, and in the presence of an international audience.
ISSUES & ARGUMENTS
W/N respondent FEBTC should have exercised a higher degree of diligence

than that expected of an ordinary prudent person in the handling of its affairs?
NO. THAT HIGHER DEGREE OF DILIGENCE IS NOT EXPECTED TO

BE EXERTED BY BANKS IN COMMERCIAL TRANSACTIONS THAT DO
NOT INVOLVE THEIR FIDUCIARY RELATIONSHIP WITH THEIR
DEPOSITORS.
• The degree of diligence required of banks, is more than that of a good father of a
family where the fiduciary nature of their relationship with their depositors is
concerned. But this only applies to cases where the banks act under their fiduciary
capacity, as depositary of the deposits of their depositors.
• The case at bar does not involve the handling of petitioners’ deposit with
respondent bank. The relationship involved was that of a buyer and seller, that is,
between the respondent bank as the seller of the subject foreign exchange demand
FRANCIS ESPIRITU
Page 36 of 528
34 Adzuara vs. Court of Appeals | Bellosillo • The speed at which Adzuara drove appears to be the prime cause for his inability to
G.R. No. 125134, January 22, 1999 | 657 SCRA 301 stop his car and avoid collision.
• It is a rule that motorists crossing a thru-stop street has the right of way over the
FACTS one making a U-turn. But if the person making a U-turn has already negotiated half
• On Dec 17, 1990, 1:30 am, Xerxes Adzuara, then a law student, and his friends Rene of the turn and is almost on the other side so that he is already visible to the person
Gonzalo and Richard Jose were cruising along Quezon Ave from EDSA towards on the thru-street, the latter must give way to the former.
Delta circle in a Colt Galant sedan at approx 40 kph. • Adzuara should have stopped when he saw the car of Martinez making a U-turn.
• Upon reaching the intersection of 4th West St their car collided w/ a 1975 Toyota • Adzuara claims that Martinez was guilty of contributory negligence but his has not
Corolla owned and driven by Gregorio Martinez. been satisfactorily shown.
• Martinez was w/ his daughter Sahlee and was coming from the eastern portion of
Quezon Ave near Delta Circle and executing a U-turn at 5kph.
• The collision flung the Corolla 20 meters southward from the point of impact and
landed on top of the center island of Q.Ave.
• Sahlee Martinez sustained injuries because of the accident and caused her to miss
classes.
• On July 12 1991, petitioner Adxuara was charged before QC RTC w/ reckless
imprudence resulting in damage to property w/ less physical injuries.
• On Dec 11, 1991, before the presentation of evidence, Martinez manifested is
intention to institute a separate civil action for damages.
• RTC convicted Adzuara, CA affirmed but deleted the fine of P50K.
ISSUES & ARGUMENTS
W/N Adzuara was guilty of negligence?
YES.
• It was satisfactorily proved that the accident occurred because of Adzuara’s reckless
imprudence consisting of his paying no heed to the red light and proceeding fast as
it was approaching an intersection.
• Gregorio testified that when the traffic light turned green, he turned left at the speed
of 5kph, this was corroborated by the testimony of Sahlee.
• Adzuara testified that he was driving at the speed of 40kph but this was belied by
the fact that the vehicle of Martinez was thrown off 20 meters away from the point
of impact.
• The appreciation of Adzuara’s post-collision behavior serves only as a means to
emphasize the finding of negligence which is readily established by the admission of
Adzuara and his friend that they saw the car of MArtines making a U-turn but could
not avoid the collision by the mere application of the brakes.
• NEGLIGENCE – the want of 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 circumstance reasonably
require. (ex: keeping a watchful eye on the road, observe traffic rules on speed, right
of way) PAT FERNANDEZ
Page 37 of 528
35 Bayne Adjuster and Surveyor Inc v CA, Insurance Company of North the tank.
America| Gonzaga-Reyes • Bayne even argued that TC and CA misappreciated the facts because PR’s own
G.R. No. 116332 January 25, 2000 |323 SCRA 231 witness admits that the bargemen continued pumping operation without
authorization from the surveyor. They also raised that the change in the
FACTS testimony of the PR’s expert witness should overthrow the claim of PR.
• Bayne Adjuster had a contract with consignee, Colgate-Palmolive Philippines, to Expert witness initially said that consignee and surveyor has a protective
supervise the proper handling and discharge of their import liquid alkyl benzene survey agreement, but he later corrected his statement that, it was only a
(from Japan, totally amounting to USD 255,802.88) from the chemical tanker to a superintendent survey agreement. Bayne was banking that under the latter,
receiving barge until the cargo is pumped into consignee’s shore tank. the SOP wouldn’t apply. However, the SC held that the SOP was for handling
• Such arrangement was insured by Col-Pal to Private Respondent (PR), Insurance of liquid bulk, while the subject cargo is liquid alkyl benzene and thus the
NA, against all risks for its full value. applicability of the SOP cannot be denied.
• June 27, 1987, 1020pm: the said pumping commenced. Due to a mechanical failure, • SC found that facts and findings of the TC and CA need not be disturbed in
pump broke down several times. absence of exceptional grounds. The mistake of the expert witness is not by
• June 29, 1987, 1pm: pump broke down again. At that time, petitioner’s surveyor itself sufficient to overthrow neither the credibility nor the weight accorded to
already left the premises without leaving any instruction with the barge foreman on it by the trial court since it was promptly corrected.
what to do in the event that the pump becomes operational again. Later that say, • DOCTRINE:
consignee asked petitioner to send a surveyor to conduct tank sounding. Petitioner o Negligence of the obligor in the performance of his obligation renders
sent Amado Fontillas, a cargo surveyor, not a liquid bulk surveyor to check. him liable for damages for the resulting loss suffered by the obligee.
Fontillas wanted to inform the bargemen and the assigned surveyor to resume Fault or negligence of the obligor consists of the failure to exercise
pumping, but they were nowhere, so he left. due care and prudence in the performance of the obligation as the
• Bargemen arrived in the evening, found the valves of the tank open and resumed nature of the obligation demands. The factual findings and
pumping in absence of any instruction. The following morning, an undetermined conclusions of the TC and CA when supported by substantial
amount of alkyl benzene was lost due to overflow. Consignee, surveyor and a evidence are entitled to great respect and will not be disturbed on
marine surveyor had a conference to determine the amount of loss. A compromise appeal except on very strong and cogent grounds.
quantity of 67.649MT was lost, amounting to PHP811,609,53. Private respondent
instituted a collection suit as subrogee of consignee after their failure to extra TC and CA decision affirmed. Petition dismissed.
judicially settle with petitioners.
• RTC, CA: Bayne must pay! Hence this petition.
ISSUES & ARGUMENTS
W/N Bayne’s failure to supervise is the proximate cause of the loss, thus making
them liable for damages?
YES!
• According to the Standard Operating Procedure (SOP) for Handling Liquid

Bulk Cargo, it is the duty of the surveyor that he closes the valves of the tank
when pumping operations are suspended due to pump break down. The
petitioner did not deny such failure. Their failure to comply is the proximate
cause of the loss. This failure enabled bargemen , without any instruction or
supervision, to resume pumping, leading to the overflow of liquid cargo from DIANE LIPANA
Page 38 of 528
36 Samson, Jr. vs. BPI | Panganiban • Award should be increased to P100,000.00 since a) petitioner is a businessman and
G.R. No. 150487, July 10, 2003 | 405 SCRA 607 the highest lay person in the United Methodist Church; b) was regarded with
arrogance and a condescending manner, and c) BPI successfully postponed
FACTS compensating him for more than a decade. His alleged delay in reporting the matter
• Samson, Jr. filed an action for damages against BPI. As a client/depositor of the did not at all contribute to his injury.
bank, he deposited a Prudential Bank check into his savings account worth
P3,500.00. Later, he asked his daughter to withdraw P2,000, but declined due to Petition partly granted. Decision modified. Award increased to P100,000.00
insufficient funds. As a result, he suffered embarrassment as he could not produce
the required cash to fulfill an obligation towards a creditor who had waited at his
residence.
• Subsequently, Samson deposited P5,500.00. Here, he discovered that hi balance
remained P342.38, and that the earlier deposit of P3,500.00 had not been credited.
• When Samson asked about the discrepancy, BPI confirmed the deposited check but
could not account for the same. Upon investigation, it was found out that their
security guard had encashed the check and that, despite knowledge of the
irregularity, BPI had not informed Samson. Moreover, manager Cayanga allegedly
displayed arrogance, indifference, and discourtesy towards Samson.
• The trial court rendered a decision in favor of Samson. CA affirmed by reducing the
amount of damages from P200,000.00 to P50,000.00. Hence this petition.
ISSUES & ARGUMENTS
W/N the reduction of moral damages by the trial court was proper.
PETITION IS PARTLY MERITORIOUS.

• Moral damages are meant to compensate the claimant for any physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation and similar injuries unjustly caused.
• Although incapable of pecuniary estimation, the amount must somehow be
proportional to and in approximation of the suffering inflicted. Moral damages are
not punitive in nature and were never intended to enrich the claimant at the expense
of the defendant.
• No hard-and-fast rule in determining moral damages; each case must be governed
by its own peculiar facts. Trial courts are given discretion in determining the
amount, with the limitation that it “should not be palpably and scandalously
excessive.”
• Moral damages are awarded to achieve a “spiritual status quo”, i.e. to enable the
injured party to obtain means, diversions, amusements that will serve to alleviate the
moral suffering undergone.
• The social standing of the aggrieved party is essential to the determination of the
proper amount of the ward. Otherwise, the goal of enabling him restore the spiritual
status quo may not be achieved.
CHRISSIE MORAL
Page 39 of 528
37 UCPB v. Teofilo C. Ramos / Callejo, Sr. information regarding the marketability and market value of the property,
G.R. No. 147800. November 11, 2003 utterly disregarding the identity of the registered owner thereof.
• It behooved the petitioner to ascertain whether the defendant Teofilo Ramos,
FACTS in the civil case was the same person who appeared as the owner of the
property covered by the said title. If the petitioner had done so, it would have
• The petitioner United Coconut Planters Bank (UCPB) granted a loan of surely discovered that the respondent was not the surety and the judgment
P2,800,000 to Zamboanga Development Corporation (ZDC) with Venicio debtor in the civil case. The petitioner failed to do so, and merely assumed that
Ramos and the Spouses Teofilo Ramos, Sr. and Amelita Ramos as sureties. the respondent and the judgment debtor Teofilo Ramos, Sr. were one and the
Teofilo Ramos, Sr. was the Executive Officer of the Iglesia ni Cristo. same person.
• ZDC failed to pay its account despite repeated demands so petitioner brought • In sum, the court found that the petitioner acted negligently in causing the
the matter to the RTC, which ruled in its favor and granted the writ of annotation of notice of levy in the title of the herein respondent, and that its
execution applied for. negligence was the proximate cause of the damages sustained by the
• Petitioner, requested Reniva, an appraiser of the petitioner’s Credit and respondent.
Appraisal Investigation Department to ascertain if the defendants had any
leviable real and personal property, and reported that there was a property
belonging to Teofilo C. Ramos, President and Chairman of the Board of
Directors of the Ramdustrial Corporation, married to Rebecca F. Ramos
• Thereafter, the sheriff sent a notice of levy to Teofilo Ramos and caused an
annotation thereof by the Register of Deeds on the said title.
• Because of this, Ramdustrial’s loan with UCPB was delayed as its property was
initially denied as security because of the annotation, which caused Ramdustrial
to fail to join a bidding at the San Miguel Corporation. This ultimately caused
its business to weaken.
ISSUES & ARGUMENTS
W/N UCPB was negligent in causing the annotation on the title of Teofilo C.
Ramos when he is not even a party to the loan entered into by ZDC, with Teofilo
Ramos Sr as surety

Yes
• “Did the defendant in doing the negligent act use that reasonable care and
caution which an ordinarily prudent person would have used in the same
situation? If not, then he is guilty of negligence.” Considering the testimonial
and documentary evidence on record, we are convinced that the petitioner
failed to act with the reasonable care and caution which an ordinarily prudent
person would have used in the same situation
• It should have acted more cautiously, especially since some uncertainty had
been reported by the appraiser whom the petitioner had tasked to make
verifications.
• It appears that the petitioner treated the uncertainty raised by appraiser
Eduardo C. Reniva as a flimsy matter. It placed more importance on the
MAGIC MOVIDO
Page 40 of 528
38 FEBTC vs. Marquez | Panganiban, J.: mortgagee who shall apply the payments to the corresponding mortgage
G.R. No. 147964, Jan. 20, 2004 | 420 SCRA 349 indebtedness secured by the particular lot or unit being paid for, with a view
to enabling said buyer to obtain title over the lot or unit promptly after full
FACTS payment thereof’
• Arturo Marquez entered into a Contract to Sell with Transamerican Sales and • That the subject of the mortgage loan was the entire land and not the individual
Expositions (TSE) whereby Marquez is to buy a 52.5 sq.m. lot in Diliman, QC with subdivided lots, does not take the loan beyond the coverage of Sec. 18. Undeniably,
a 3-story townhouse unit denominated as Unit No. 10 for a total consideration of the lot was also mortgaged when the entire parcel of land, of which it was a part,
P800,000 was encumbered.
• On May 22, 1989, TSE obtained a loan from FEBTC for P7,650,000 and mortgaged • The case of PNB vs. Office of the President provides that PD 957 was intended to
the property covered by TCT No. 156254 (which includes in it Unit No. 10) protect innocent lot buyers from scheming subdivision developers.
o FEBTC relied on TSE’s representation that all requisite permits and licenses from the • As between the small lot owners and the gigantic financial institutions, which the
government agencies concerned were complied with developers deal with, it is obvious that the law, as an instrument of social justice,
• TSE failed to pay the loan and FEBTC foreclosed the REM must favor the weak.
• FEBTC won as the highest bidder (P15.7 M) in the auction sale o Banks are presumed to have conducted the usual ‘due diligence’ checking
• Marquez has already paid P600,000 when he stopped payment since the and ascertaining
construction of his townhouse slackened o Small lot owners are powerless to discover the attempt of the land developer
• Marquez instituted a case with the Office of Appeals, Adjudication, and Legal to hypothecate the property being sold tot hem
Affairs (OAALA) of the HLURB and he won • Petitioner’s argument that it was an innocent mortgagee lacks merit
o The mortgage was deemed unenforceable o As a general rule, when there is nothing on the certificate of title to
o Ordered FEBTC to compute and allow Marquez to continue payment of indicate any cloud or vice in the ownership of the property, the purchase is
amortizations not required to go beyond the title
o Ordered RD of QC to cancel the annotations of the mortgage indebtedness o However, where the purchaser or mortgagee has knowledge of a defect or
o Ordered RD of QC to cancel the annotation of the Certificate of Sale in favor lack of title in the vendor, or that he was aware of sufficient facts to induce
of FEBTC a reasonably prudent man to inquire into the status of the property in
• FEBTC filed a Petition for Review but was denied litigation, he must go beyond the title
• FEBTC appealed the decision to the Office of the President but was denied • Petitioner should have considered that it was dealing with a town hose project that
• FEBTC filed a Petition for review to CA under Rule 43 but was denied was already in progress
• Hence this Petition for Review under Rule 45 o A reasonable person should have been aware that, to finance the project,
sources of funds could have been used other than the loan, which was
ISSUES & ARGUMENTS intended to serve the purpose only partially
o Hence, there was a need to verify whether any party of the property was
W/N the mortgage contract violated Sec. 18 of PD 957, hence, void insofar as already the subject of any other contract involving buyers or potential
third persons are concerned buyers
• In granting the loan, the bank should not have been content merely with a clean
HOLDING & RATIO DECIDENDI title, considering the presence of circumstances indicating the need for a thorough
investigation of the existence of buyers like respondent
YES Sec. 18 of PD 957 provides: • Having been wanting in care and prudence, the bank cannot be deemed to be an
o ‘No mortgage on any unit or lot shall be made by the owner or developer innocent mortgagee
without prior written approval of the Authority. Such approval shall not be • The bank should not have relied on TSE’s representations and it must have required
granted unless it is shown that the proceeds of the mortgage loan shall be the submission of certified true copies of those documents and verified their
used for the development of the condominium or subdivision project and authenticity through its own independent effort.
effective measures have been provided to ensure such utilization. The loan
value of each lot or unit covered by the mortgage shall be determined and the
buyer thereof, if any, shall be notified before the release of the loan. The
buyer may, at his option, pay his installment for the lot or unit directly to the CEO OCAMPO
Page 41 of 528
39 Cusi v. PNR| Guerrero J. notwithstanding the application of the emergency brakes, the train did not stop
G.R. No. L-29889 May 31, 1979 until it reached a distance of around 100 meters."
• Victorino Cusi had exercised all the necessary precautions required of him as to
FACTS avoid injury to -himself and to others. We find no need for him to have made a
full stop; relying on his faculties of sight and hearing, Victorino Cusi had no
• Spouses Cusi attended a birthday party in Paranaque, Rizal. After the party reason to anticipate the impending danger
which broke up at about 11 o'clock that evening, the spouses proceeded home • The record shows that the spouses Cusi previously knew of the existence of the
in their Vauxhall car with Victorino Cusi at the wheel. Upon reaching the railroad crossing, having stopped at the guardhouse to ask for directions before
railroad tracks, finding that the level crossing bar was raised and seeing that proceeding to the party. At the crossing, they found the level bar raised, no
there was no flashing red light, and hearing no whistle from any coming train, warning lights flashing nor warning bells ringing, nor whistle from an oncoming
Cusi merely slack ened his speed and proceeded to cross the tracks. At the same train. They safely traversed the crossing. On their return home, the situation at
time, a train bound for Lucena traversed the crossing, resulting in a collision the crossing did not in the least change, except for the absence of the guard or
between the two. flagman. Hence, on the same impression that the crossing was safe for passage
• This accident caused the spouses to suffer deformities and to lose the earnings as before, plaintiff-appellee Victorino Cusi merely slackened his speed and
they used to enjoy as successful career people. proceeded to cross the tracks, driving at the proper rate of speed for going over
• The defense is centered on the proposition that the gross negligence of railroad crossings
Victorino Cusi was the proximate cause of the collision; that had he made a full
stop before traversing the crossing as required by section 56(a) of Act 3992
(Motor Vehicle Law), he could have seen and heard the approach of the train,
and thus, there would have been no collision.
ISSUES & ARGUMENTS
W/N Victorino Cusi was negligent and such was the proximate cause of the
collision
No.
• Negligence has been defined by Judge Cooley in his work on Torts as "the
failure to observe for the protection of the interests of another person that
degree of care, precaution, and vigilance which the circumstances justly
demand, whereby such other person suffers injury."
• All that the law requires is that it is always incumbent upon a person to use that
care and diligence expected of reasonable men under similar circumstances.
• Undisputably, the warning devices installed at the railroad crossing were
manually operated; there were only 2 shifts of guards provided for the
operation thereof — one, the 7:00 A.M. to 3:00 P. M. shift, and the other, the
3:00 P.M. to 11:00 P.M. shift. On the night of the accident, the train for Lucena
was on an unscheduled trip after 11:00 P.M. During that precise hour, the
warning devices were not operating for no one attended to them. Also, as
observed by the lower court, the locomotive driver did not blow his whistle,
thus: "... he simply sped on without taking an extra precaution of blowing his
whistle. That the train was running at full speed is attested to by the fact that MAGIC MOVIDO
Page 42 of 528
40 Gan vs. CA | Fernan, C.J.: • The CA, in its decision, said that Gan should have stepped on the brakes when she
G.R. No. L-44264, Sept. 19, 1988 | 165 SCRA 378 saw the car going in the opposite direction. And that she should not only have
swerved the car she was driving to the right but should have also tried to stop or
FACTS lessen her speed so that she would not bump into the pedestrian.
• July 4, 1972 (8am): Hedy Gan was driving a Toyota Crown Sedan along North Bay • The SC held that the appellate court is asking too much from a mere mortal like the
Boulevard, Tondo, Manila petitioner who in the blink of an eye had to exercise her best judgment to extricate
• While driving two vehicles, a truck and a jeepney, are parked at the right side of the herself from a difficult and dangerous situation caused by the driver of the
road overtaking vehicle.
• While driving, there was a vehicle coming from the opposite direction and another o The danger confronting Gan was real and imminent, threatening her very
one who overtakes the first vehicle existence
• To avoid a head-on collision, the Gan served to the right and as a consequence: o She had no opportunity for rational thinking but only enough time to head
o The front bumper of the Toyota Crown Sedan hit an old man pedestrian the very powerful instinct of self-preservation
(Isidoro Casino) ~ DOA to Jose Reyes Memorial Hospital
 Casino was pinned against the rear of the parked jeepney and the WHEREFORE, Gan is acquitted.
jeepney moved forward hitting the truck
o Sedan was damaged on its front
o The jeep suffered damages
o The truck sustained scratches
• Gan was convicted of Homicide thru Reckless Imprudence
• On appeal, the conviction was modified to Homicide thru Simple Imprudence
• Petitioner now appeals to the said ruling
ISSUES & ARGUMENTS

• W/N Gan is criminally liable for the accident
NO
• TEST for determining negligence:
o Would a prudent man in the position of the person to whom negligence is
attributed foresee harm to the person injured as a reasonable consequence
of the course about to be pursued?
o If so, the law imposes the duty on the doer to take precaution against its
mischievous results and the failure to do so constitutes negligence
• However a corollary rule must be understood, that is the ‘Emergency Rule’ which
provides that:
o One who suddenly finds himself in a place of danger, and is required to act
without time to consider the best means that may be adopted to avoid the
impending danger, is not guilty of negligence, if he fails to adopt what
subsequently and upon reflection may appear to have been a better
method, unless the emergency in which he finds himself is brought about
by his own negligence
o It presupposes sufficient time to analyze the situation and to ponder on
which of the different courses of action would result to the least possible
harm to herself and to others CEO OCAMPO
Page 43 of 528
41 Valenzuela vs. CA| Kapunan HOLDING & RATIO DECIDENDI
G.R. No. 115024, February 7, 1996 | 362 SCRA 56
Sustain Plaintiff
FACTS • The version presented by defendant could not be sustained as witnesses in the area
• At around 2:00 in the morning of June 24, 1990, plaintiff Ma. Lourdes Valenzuela testified that he was driving very fast and zigzagging. Also the facts as he narrated
was driving a blue Mitsubishi lancer with Plate No. FFU 542 along Aurora Blvd. are highly unprobable seeing as the street was actually well lighted. Had he been
with a companion, Cecilia Ramon, heading towards the direction of Manila. Before traveling at a slow speed, he would have been able to stop in time so as not to hit
reaching A. Lake Street, she noticed she had a flat tire and stopped at a lighted place the plaintiff even if the road was wet. The only reason why he would not have been
to solicit help if needed. She parked along the sidewalk, about 1½ feet away, put on able to do so would be if he was intoxicated which slows down reactions.
her emergency lights, alighted from the car, and went to the rear to open the trunk.
She was standing at the left side of the rear of her car when she was suddenly No
bumped by a 1987 Mitsubishi Lancer driven by defendant Richard Li and registered • Li contends that Valenzuela should not have parked on the side of the road and
in the name of defendant Alexander Commercial, Inc. Because of the impact looked for a parking space.
plaintiff was thrown against the windshield of the car of the defendant and then fell • The court rationalized using the emergency rule which states “An individual who
to the ground. She was pulled out from under defendant’s car. She was brought to suddenly finds himself in a situation of danger and is required to act without much
the UERM Medical Memorial Center where she was found to have a “traumatic time to consider the best means that may be adopted to avoid the impending
amputation, leg, left up to distal thigh (above knee).” She was confined in the danger, is not guilty of negligence if he fails to undertake what subsequently and
hospital for twenty (20) days and was eventually fitted with an artificial leg. The upon reflection may appear to be a better solution, unless the emergency was
expenses for the hospital confinement (P 120,000.00) and the cost of the artificial brought by his own negligence.” Valenzuela could not have been expected to go to a
leg (P27,000.00) were paid by defendants from the car insurance. side street where the chances of finding help would have been lower.
• Defendant Richard Li denied that he was negligent. He said he was travelling at 55 No

kph; considering that it was raining, visibility was affected and the road was wet. • Although the Li was an employee of American, no proof was adduced as Li claimed,
Traffic was light. He testified that he was driving along the inner portion of the right that he was out late that night on a social call in the exercise of his functions as
lane of Aurora Blvd. towards the direction of Araneta Avenue, when he was assistant manager.
suddenly confronted, in the vicinity of A. Lake Street, San Juan, with a car coming
from the opposite direction, travelling at 80 kph, with “full bright lights.”
Temporarily blinded, he swerved to the right to avoid colliding with the oncoming
vehicle, and bumped plaintiff’s car, which he did not see because it was midnight
blue in color, with no parking lights or early warning device, and the area was poorly
lighted. He alleged in his defense that the left rear portion of plaintiff’s car was
protruding as it was then “at a standstill diagonally” on the outer portion of the right
lane towards Araneta Avenue (par. 18, Answer). He confirmed the testimony of
plaintiff’s witness that after being bumped the car of the plaintiff swerved to the
right and hit another car parked on the sidewalk. Defendants counterclaimed for
damages, alleging that plaintiff was reckless or negligent, as she was not a licensed
driver.
ISSUES & ARGUMENTS

• W/N the court should sustain the version of plaintiff or defendant
• W/N there was contributory negligence on the part of Valenzuela
• W/N Alexander Commercial Inc. can be held solidarily liable with Li
JAN PORTER
Page 44 of 528
42 Prudential Bank v. CA | Quisumbing LETICIA IS ONLY ENTITLED TO P20,000 (NOT P50,000)
G.R. No. 125536, March 16, 2000| 328 SCRA 264 • The law allows the grant of exemplary damages by way of example for the public
good.
FACTS • The level of meticulousness must be maintained at all times by the banking sector.
• Leticia Tupasi-Valenzuela had a current account with Prudential Bank, the balance Hence, the Court of Appeals did not err in awarding exemplary damages. In our
of which on 21 June 1988 was about P36K. view, however, the reduced amount of P20,000.00 is more appropriate.
• She issued a post-dated check (20 June 1997) for P11,500, drawn upon her account
in Prudential Bank, in favor of Legaspi for payment of jewelry.
• The check was indorsed to Philip Lhuiller. Lhullier subsequently deposited the
check but it was dishonored for having insufficient funds.
• Leticia went to Prudential Bank to clarify the matter because it was her belief that
she had the sufficient funds to cover the amount of the check since she deposited
into her account a check for P35K on 1 June 1988.
• She presented her passbook to the bank officer as evidence, but the same was set
aside because according to the officer the best evidence of sufficiency of funds was
the ledger furnished by the bank which did, in fact, show an insufficiency.
• Leticia found out that the check she deposited on 1 June had been cleared only on
24 June, 23 days after the deposit. The P11,500.00 check was redeposited by
Lhuillier on June 24, 1988, and properly cleared on June 27, 1988.
ISSUES & ARGUMENTS

• W/N Leticia is entitled to Moral Damages amounting to P`100,000.
o Petitioner’s Argument: Bank acted in good faith and that is was an
honest mistake, therefore moral damages cannot be asked of them.
o Respondent’s Argument: while it may be true that the bank's negligence
in dishonoring the properly funded check of Leticia might not have been
attended with malice and bad faith, it is the result of lack of due care and
caution expected of an employee of a firm engaged in so sensitive and
accurately demanding task as banking
• W/N Leticia is entitled to Exemplary Damages amounting to P 50,000.
o Petitioner’s Argument: Bank acted with due diligence.
o Respondent’s Argument: The Bank did not practice due diligence and
the public relies on the banks' sworn profession of diligence and
meticulousness in giving irreproachable service.
LETICIA IS ENTITLED TO P100,000 as MORAL DAMAGES

• The bank's negligence was the result of lack of due care and caution required of
managers and employees of a firm engaged in so sensitive and demanding business
as banking. Accordingly, the award of moral damages by the respondent Court of
Appeals could not be said to be in error nor in grave abuse of its discretion
CHESKA RESPCIO
Page 45 of 528
43 Subido vs. Custodio
G.R. No. 129329, July 31, 2001 | 17 SCRA 1088
FACTS
• Petitioner Subido owned a 6x6 truck which was driven by Lagunda. Laguna-Tayabas
Bus Company on the other hand owned a bus driven by Mudales had Agripino
Custodio, respondent Belen Makabuhay Custodio’s husband, as one of its
passengers.
• On June 9, 1955 at around 9:30 AM, the LTB bus was negotiating a sharp curve in
Barrio Halang, Municipality of Lumban, Laguna. The bus was full and Agripino was
hanging on the left side of the bus.
• At the same time but at the opposite direction, Subido’s truck was climbing up at a
fast speed. Despite having seen Agripino hanging from the side of the bus 5 to 7
meters away, Lagunda did not swerve to the shallow canal on the right side of the
road.
• Agripino was sideswiped and this led to his death.
ISSUES & ARGUMENTS
W/N Subido and Lagunda can be held solidarily liable with LTB and Mudales.
Yes
• The negligence of LTB and Muidales would not have caused the death of Agripino
had Lagunda not been negligent himself. It can be said that the negligence of the
drivers of both vehicles were the proximate causes for the accident
• Also, Lagunda had the last clear chance to avoid the accident.
• The parties are solidarily liable for, although their acts were independent, it cannot
be determined as to what proportion of the negligence of each contributed to the
damage.
JAN PORTER
Page 46 of 528
44 Ridjo Tape and Chemical Corp. v. CA| Romero stoppages in electric meters can also result from inherent defects or flaws and not
G.R. No. 126074, February 24, 1998| 286 SCRA 544 only from tampering or intentional mishandling. Since they were also negligent in
failing to check their meters, it is only fair that they pay for the electricity that they
FACTS used.
• MERALCO demanded payment from Ridjo Tape & Chemical Corp for their
unregistered electric consumption from November 1990 – February 1991
amounting to P415K.
• MERALCO also demanded that Ridjo Paper Corp pay their unregistered electric
consumption for the period of July 1991 – April 1992 in the amount of P89K
• MERALCO sent them notices to settle their account or it would be forced to
disconnect their electricity.
• The unregistered electric consumption charges was due to the defects Ridjo Corp’s
electric meter.
ISSUES & ARGUMENTS
W/N Ridjo must their unregistered electric consumption

o Petitioners: Their contract provides: In the event of the stoppage or the
failure by any meter to register the full amount of energy consumed, the
Customer shall be billed for such period on an estimated consumption
based upon his use of energy in a similar period of like use”
o Respondent: To follow the interpretation advanced by petitioners would
constitute an unjust enrichment in favor of its customers
RIDJO IS PARTLY LIABLE FOR THE UNREGISTERED ELECTRIC

CONSUMPTION
• MERALCO was negligent for which it must bear the consequences. Its failure to
make the necessary repairs and replacement of the defective electric meter installed
within the premises of petitioners was obviously the proximate cause of the instant
dispute between the parties.
• Public utilities should be put on notice, as a deterrent, that if they completely
disregard their duty of keeping their electric meters in serviceable condition, they
run the risk of forfeiting, by reason of their negligence, amounts originally due from
their customers.
• The Court cannot sanction a situation wherein the defects in the electric meter are
allowed to continue indefinitely until suddenly the public utilities concerned demand
payment for the unrecorded electricity utilized when, in the first place, they should
have remedied the situation immediately. If we turn a blind eye on MERALCO's
omission, it may courage negligence on the part of public utilities, to the detriment
of the consuming public.
• However, it is to be expected that the Ridjo Corporations were consciously aware
that these devices or equipment are susceptible to defects and mechanical failure. It
is difficult to believe that the Ridjo Corporations were ignorant of the fact that CHESKA RESPICIO
Page 47 of 528
45 Raynera v. Hiceta| Pardo him. He was in control of the situation. His motorcycle was equipped with headlights to
(G.R. No. 120027) (21 April 1999) enable him to see what was in front of him. He was traversing the service road where the
prescribed speed limit was less than that in the highway.
FACTS:
Traffic investigator Cpl. Virgilio del Monte testified that two pairs of 50-watts bulbs were
• On March 23, 1989, at about 2:00 in the morning, Reynaldo Raynera was on his way on top of the steel plates, which were visible from a distance of 100 meters Virgilio
home. He was riding a motorcycle traveling on the southbound lane of East Service Santos admitted that from the tricycle where he was on board, he saw the truck and its
Road, Cupang, Muntinlupa. The Isuzu truck was travelling ahead of him at 20 to 30 cargo of iron plates from a distance of ten (10) meters. In light of these circumstances,
kilometers per hour. The truck was loaded with two (2) metal sheets extended on an accident could have been easily avoided, unless the victim had been driving too fast
both sides, two (2) feet on the left and three (3) feet on the right. There were two (2) and did not exercise dues care and prudence demanded of him under the circumstances.
pairs of red lights, about 35 watts each, on both sides of the metal plates. The Virgilio Santos' testimony strengthened respondents' defense that it was the victim who
was reckless and negligent in driving his motorcycle at high speed. The tricycle where
asphalt road was not well lighted. Santos was on board was not much different from the victim's motorcycle that figured in
• At some point on the road, Reynaldo Raynera crashed his motorcycle into the left the accident. Although Santos claimed the tricycle almost bumped into the improperly
rear portion of the truck trailer, which was without tail lights. Due to the collision, parked truck, the tricycle driver was able to avoid hitting the truck.
Reynaldo sustained head injuries and he was rushed to the hospital where he was
declared dead on arrival. It has been said that drivers of vehicles "who bump the rear of another vehicle" are
• Edna Raynera, widow of Reynaldo, filed with the RTC a complaint for damages presumed to be "the cause of the accident, unless contradicted by other evidence". The
rationale behind the presumption is that the driver of the rear vehicle has full control of
against respondents Hiceta and Orpilla, owner and driver of the Isuzu truck.
the situation as he is in a position to observe the vehicle in front of him.
• At the trial, petitioners presented Virgilio Santos. He testified that at about 1:00 and
2:00 in the morning of March 23, 1989, he and his wife went to Alabang, market, on We agree with the Court of Appeals that the responsibility to avoid the collision with the
board a tricycle. They passed by the service road going south, and saw a parked front vehicle lies with the driver of the rear vehicle.
truck trailer, with its hood open and without tail lights. They would have bumped
the truck but the tricycle driver was quick in avoiding a collision. The place was
dark, and the truck had no early warning device to alert passing motorists.
• Trial court: respondent’s negligence was the immediate and proximate cause of
Raynera’s death.
• CA: The appellate court held that Reynaldo Raynera's bumping into the left rear
portion of the truck was the proximate cause or his death, and consequently,
absolved respondents from liability.
ISSUE & ARGUMENTS
(a) whether respondents were negligent, and if so,

(b) whether such negligence was the proximate cause of the death of Reynaldo Raynera.
We find that the direct cause of the accident was the negligence of the victim. Traveling
behind the truck, he had the responsibility of avoiding bumping the vehicle in front of DIKKI SIAN
Page 48 of 528
46 Ermitaño VS CA | QUISUMBING, J o Respondent’s Argument: There are two requisites for cardholder to
G.R. No. 127246 April 21, 1999 escape liability: (1) Prompt notice to BECC of loss, and (2) BECC informs
FACTS its member establishments. Not all of these were complied with.
• Petitioner Luis Ermitaño applied for a credit card from BPI Express Card Corp.
(BECC) on October 8, 1986 with his wife, Manuelita, as extension cardholder. The HOLDING & RATIO DECIDENDI
spouses were given credit cards with a credit limit of P10,000.00. They often Ermitaños should NOT be billed the unauthorized purchases.
exceeded this credit limit without protest from BECC. • For the cardholder to be absolved from liability for unauthorized purchases
• On August 29, 1989, Manuelita's bag was snatched from her as she was made through his lost or stolen card, two steps must be followed: (1) the
shopping at the Greenbelt Mall in Makati. Among the items inside the bag was her cardholder must give written notice to BECC, and (2) BECC must notify its
BECC credit card. member establishments of such loss or theft, which, naturally, it may only do
• That same night she informed, by telephone, BECC of the loss. The call was upon receipt of a notice from the cardholder. Both the cardholder and BECC,
received by BECC offices through a certain Gina Banzon. This was followed by a then, have a responsibility to perform, in order to free the cardholder from any
letter dated August 30, 1989. She also surrendered Luis' credit card and requested liability arising from the use of a lost or stolen card.
for replacement cards. In her letter, Manuelita stated that she "shall not be • BECC states that, "between two persons who are negligent, the one who made
responsible for any and all charges incurred [through the use of the lost card] after the wrong possible should bear the loss." We take this to be an admission that
August 29, 1989. negligence had occurred.
• However, when Luis received his monthly billing statement from BECC dated • From one perspective, it was not petitioners who made possible the
September 20, 1989, the charges included amounts for purchases made on August commission of the wrong. It could be BECC for its failure to immediately
30, 1989 through Manuelita's lost card. Manuelita again wrote BECC disclaiming notify its members-establishments, who appear lacking in care or instruction by
responsibility for those charges, which were made after she had served BECC with BECC in proper procedures, regarding signatures and the identification of card
notice of the loss of her card. users at the point of actual purchase of goods or services. For how else could
• Despite the spouses' refusal to pay and the fact that they repeatedly exceeded their an unauthorized person succeed to use Manuelita's lost card?
monthly credit limit, BECC sent them a notice dated December 29, 1989 stating • The cardholder was no longer in control of the procedure after it has notified
that their cards had been renewed until March 1991. However, BECC continued to BECC of the card's loss or theft. It was already BECC's responsibility to inform
include in the spouses' billing statements those purchases made through Manuelita's its member-establishments of the loss or theft of the card at the soonest
lost card. Luis protested this billing in his letter dated June 20, 1990. possible time.
• However, BECC, in a letter dated July 13, 1990, pointed out to Luis the following • Prompt notice by the cardholder to the credit card company of the loss or theft
stipulation in their contract: of his card should be enough to relieve the former of any liability occasioned by
• “In the event the card is lost or stolen, the cardholder agrees to immediately report the unauthorized use of his lost or stolen card. The questioned stipulation in
its loss or theft in writing to BECC . . . purchases made/incurred arising from the this case, which still requires the cardholder to wait until the credit card
use of the lost/stolen card shall be for the exclusive account of the cardholder and company has notified all its member-establishments, puts the cardholder at the
the cardholder continues to be liable for the purchases made through the use of the mercy of the credit card company which may delay indefinitely the notification
lost/stolen BPI Express Card until after such notice has been given to BECC and of its members to minimize if not to eliminate the possibility of incurring any
the latter has communicated such loss/theft to its member establishments.” loss from unauthorized purchases. Or, as in this case, the credit card company
• When Luis used his “new” card on a Caltex station, the card was denied. may for some reason fail to promptly notify its members through absolutely no
Apparently, BECC carried over the unauthorized charges to the new cards and their fault of the cardholder. To require the cardholder to still pay for unauthorized
limits were exceeded. purchases after he has given prompt notice of the loss or theft of his card to
• He reiterated that the unauthorized charges should not be billed to their cards, but the credit card company would simply be unfair and unjust. The Court cannot
BECC claimed that the said stipulation is valid and that the two requisites were not give its assent to such a stipulation which could clearly run against public policy
met for the cardholder to escape liability.
ISSUES & ARGUMENTS

• W/N the Ermitaños should be billed the unauthorized purchases.
o Petitioner’s Argument: Contract of adhesion… we did our part by
informing BECC immediately of the loss. FRANK TAMARGO
Page 49 of 528
47 BPI Express Card Corporation v Olalia | Quisumbing RTC and CA found that in Olalia’s applications for the original as well as the
G.R. No. 131086 December 14, 2001 | 372 SCRA 338 renewal card, HE NEVER APPLIED FOR AN EXTENSION CARD in the
name of his wife. BECC also failed to show any receipt for any fee given in
FACTS payment for the purpose of securing an extension card.
• Respondent Eddie C. Olalia (Olalia) applied for and was granted membership and
credit accommodation with BPI Express Card Corporation (BECC) with a credit • We have previously held that contracts of this nature are contracts of adhesion, so-
limit of P5,000. In January 1991, Olalia’s card expired and a renewal card was issued. called because their terms are prepared by only one party while the other merely
BECC also issued an extension card in the name of Cristina G. Olalia, Olalia’s ex- affixes his signature signifying his adhesion thereto. As such, their terms are
wife. BECC alleges that the extension card was delivered and received by Olalia at construed strictly against the party who drafted it. In this case, it was BECC who
the same time as the renewal card. However, Olalia denies ever having applied for, made the foregoing stipulation, thus, they are now tasked to show vigilance for its
much less receiving, the extension card. compliance.
• As evidenced by charge slips presented and identified in court, it was found that the • BECC failed to explain who a card was issued without accomplishment of the
extension card in the name of Cristina G. Olalia was used for purchases made from requirements. Moreover, BECC did not even secure the specimen signature of the
March to April 1991, particularly in the province of Iloilo and the City of Bacolod. purported extension cardholder, such that it cannot now counter Eddie C. Olalia’s
Total unpaid charges from the use of this card amounted to P101,844.54. contention that the signatures appearing on the charge slips of the questioned
• BECC sent a demand letter to Olalia, to which the latter denied liability saying that transactions were not that of his former wife, Cristina G. Olalia.
said purchases were not made under his own credit card and that he did not apply • We note too that respondent Eddie C. Olalia did not indicate nor declare that he
for nor receive the extension card in the name of his wife. He has likewise not used had a spouse when he applied for a credit card with BECC. In fact, at the time the
or allowed anybody in his family to receive or use the extension card. Moreover, his extension card was issued and allegedly received by respondent, Cristina had long
wife, from whom he was already divorced, left for the States in 1986 and has since left the Philippines.
resided there. In addition, neither he nor Cristina was in Bacolod or Iloilo at the
time the questioned purchases were made. She was dropped as defendant by the trial NO. BECC’s negligence absolves respondent Olalia from liability.
court, in an Order dated September 29, 1995.
• A case for collection was filed by BECC before the RTC but Olalia only admits
responsibility for the amount of P13,883.27, representing purchases made under his
own credit card.
• RTC initially ruled in favor of Olalia, making him liable only for P13,883.27. But on
motion for reconsideration by BECC, the RTC reversed its initial resolution and
made Olalia liable for P136,290.97.
• On appeal to the CA, the latter decision was sustained
ISSUES & ARGUMENTS

• W/N an extension card in the name of Cristina Olalia was validly issued and
in fact received by respondent Eddie Olalia?
• W/N Olalia should be made liable for the purchases made using the
extension card?
NO. Under the terms and condition governing the issuance and use of BPI
Express Credit Card there are TWO REQUIREMENTS FOR THE ISSUANCE
OF AN EXTENSION CARD: (1) PAYMENT OF THE NECESSARY FEE
AND (2) SUBMISSION OF AN APPLICATION FOR THAT PURPOSE. Both TEL VIRTUDEZ
Page 50 of 528
48 Benguet Electric Cooperative, Inc vs. CA, Caridad O. Bernardo Jojo, Jeffrey
and Jo-An, all surnamed Bernardo, And Guillermo Canave, Jr.
G.R. No. 127326 December 23, 1999
FACTS
• Jose Bernardo suffered from an epileptic seizure when he grasped the handlebars of
the rear entrance of a parked vehicle. Bernardo shortly died. It was discovered that
the antenna of the jeepney was entangled with an open electric wire at the top of
the roof of a meat stall.
• The spouse and children of the victim filed a claim against Benguet Electric
Cooperative (BENECO), who then filed a third-party complaint against the owner
of the jeep.
ISSUE & ARGUMENTS
Which party is liable for damages in the instant case?
• BENECO was grossly negligent in leaving unprotected and uninsulated the splicing
point between the service drop line and the service entrance conductor, which
connection was only eight (8) feet from the ground level, in violation of the
Philippine Electrical Code.
• By leaving an open live wire unattended for years, BENECO demonstrated its utter
disregard for the safety of the public. Indeed, Jose Bernardo's death was an accident
that was bound to happen in view of the gross negligence of BENECO.
• On the other hand, the owner of the jeep, Canave is not liable since he was well
within his right to park the vehicle in the said area, and there was no showing that
any municipal law or ordinance was violated nor that there was any foreseeable
danger posed by his act.
• In conclusion, the proximate cause of the accident was the negligence of BENECO,
and it should be solely liable for damages to the heirs of Bernardo.
JR RUIZ
Page 51 of 528
49 St. Mary’s Academy vs Carpitanos| Pardo • Under Article 219 of the Family Code, if the person under custody is a minor, those
G.R. No. 143363 February 6, 2002| exercising special parental authority are principally and solidarily liable for damages
caused by the acts or omissions of the unemancipated minor under their
FACTS supervision, instruction or custody.
• In this case, there was no finding that the act or omission considered negligent was
• The case is about St. Mary’s liability for damages arising from an accident that the proximate cause of the injury caused because the negligence, must have a causal
resulted in the death of a student who had joined a campaign to visit the public connection to the accident.
schools in Dipolog City to solicit enrollment. • Daniel spouses and Villanueva admitted that the immediate cause of the accident
• Sherwin Capistranos was part of the campaigning group. was not the negligence of the petitioner or the reckless driving of James Daniel II,
• On the day of the incident, Sherwin rode a Mitsubishi Jeep owned by Vicencio but the detachment of the steering wheel guide of the Jeep.
Villanueva. It was driven by James Daniel II then 15 years old and a student of the • There was no evidence that the petitioner school allowed the minor James Daniel II
same school. to drive the Jeep of respondent Vicencio Villanueva. IT was Ched Villanueva who
• James Daniel was driving the car recklessly so it turned turtle. had custody, control and possession of the Jeep.
• Actually it was the detachment of the steering that caused it. • The negligence of petitioner St. Mary’s Academy was only a remote cause of the
• Sherwin Capistranos died as a result of the injuries he sustained from the accident. accident. Between the remote cause and the injury, there intervened the negligence
• William Carpitanos and Lucia Carpitanos filed on June 9, 1995 a case claiming of the minor’s parents or the detachment of the steering wheel guide of the jeep.
damages for their son Sherwin Carpitanos against James Daniel Sr. and Guada • St. Mary’s cannot be held liable for moral damages. Though incapable of pecuniary
Daniel, the vehicle owner, Vivencio Villanueva and St. Mary’s Academy before the estimation, moral damages may be recovered if they are the proximate result of the
RTC of Dipolog City. defendant’s wrongful act or omission. In this case the cause was not attributable to
• St. Mary’s Academy was ordered to pay the complainants for damages. St. Mary’s Academy.
• In case of the insolvency of St. Mary’s Academy, James Daniel and Guada Daniel
were also ordered to pay Capistrano. Daniel is only subsidiarily liable.
• James Daniel was a minor during the commission of the tort and was under the
special parental authority of James Daniel II. He was adjudged to have subsidiary
liability with his parents.
ISSUES & ARGUMENTS
Whether the St. Mary’s should be liable for damages for the death of Sherwin
Capistranos.
Whether the Capistranos are entitled to the award of moral damages.
No to both issues.
• Under Article 218 of the Family Code, the following shall have special parental
authority over a minor child while under their supervision, instruction or custody: 1.
The school, its administrators and teachers. 2. the individual, entity or institution
engaged in child care. This special parental authority and responsibility applies to all
authorized activities inside or outside the premises of the school, entity or
institution.
SATURDAY ALCISO
Page 52 of 528
50 Adriano vs. Pangilinan| Panganiban
G.R. No. 137471, January 16, 2002| 373 SCRA 544
FACTS
• Petitioner Guillermo Adriano is the registered owner of a parcel of land with an area
of 304 square meters situated at Montalban, Rizal and covered by TCT No. 337942.
• Petitioner entrusted the original owner’s copy of the aforesaid TCT to Angelina
Salvador, a distant relative, for the purpose of securing a mortgage loan.
• Without the knowledge and consent of petitioner, Angelina Salvador mortgaged the
subject property to respondent Romulo Pangilinan, an architect and businessman.
• After a time, petitioner verified the status of his title with the Registry of Deeds of
Marikina to find out that upon the said TCT was already annotated a first Real
Estate Mortgage purportedly executed by one Guillermo Adriano over the aforesaid
parcel of land in favor or respondent Pangilinan in consideration of the sum of
P60,000.
• Petitioner denied that he ever executed the Deed of Mortgage and denounced his
signature thereon as a forgery. He also denied having received the consideration of
P60,000 stated therein.
ISSUES & ARGUMENTS
W/N petitioner was negligent in entrusting and delivering his tct to a relative?
Was such negligence sufficient to deprive him of his property?
NO, RESPONDENT MUST BEAR THE LOSS

• The negligence of petitioner is not enough to offset the fault of respondent himself
in granting the loan.
• Respondent is not an “innocent mortgagee for value” for he failed to exert due
diligence in the grant of the loan and the execution of the real estate mortgage.
Respondent testified that he was engaged in the real estate business including the
grant of loans secured by real property mortgages. Thus, he is expected to ascertain
the status and condition of the properties offered to him as collateral, as well as
verify the identities of the persons he transacts business with.
• Equity dictates that a loss brought about by the concurrent negligence of two
persons shall be borne by one who was in the immediate, primary and
overriding position to prevent it.
BON ARCILLA
Page 53 of 528
51 Vda. De Bataclan v. Mariano Medina | Montemayor
G.R. No. 12106, October 22, 1957| in the present case under the circumstances obtaining in the same, we do not hesitate to
hold that the proximate cause was the overturning of the bus, this for the reason that
FACTS when the vehicle turned not only on its side but completely on its back, the leaking of
Shortly after midnight, on September 13, 1952 bus no. 30 of the Medina Transportation, the gasoline from the tank was not unnatural or unexpected; that the coming of the men
operated by its owner defendant Mariano Medina under a certificate of public with a lighted torch was in response to the call for help, made not only by the
convenience, left the town of Amadeo, Cavite, on its way to Pasay City, driven by its passengers, but most probably, by the driver and the conductor themselves, and that
regular chauffeur, Conrado Saylon. There were about eighteen passengers, including the because it was dark (about 2:30 in the morning), the rescuers had to carry a light with
driver and conductor. Among the passengers were Juan Bataclan, seated beside and to them, and coming as they did from a rural area where lanterns and flashlights were not
the right of the driver, Felipe Lara, sated to the right of Bataclan, another passenger available; and what was more natural than that said rescuers should innocently approach
apparently from the Visayan Islands whom the witnesses just called Visaya, apparently the vehicle to extend the aid and effect the rescue requested from them. In other words,
not knowing his name, seated in the left side of the driver, and a woman named Natalia the coming of the men with a torch was to be expected and was a natural sequence of
Villanueva, seated just behind the four last mentioned. At about 2:00 o'clock that same the overturning of the bus, the trapping of some of its passengers and the call for outside
morning, while the bus was running within the jurisdiction of Imus, Cavite, one of the help. What is more, the burning of the bus can also in part be attributed to the
front tires burst and the vehicle began to zig-zag until it fell into a canal or ditch on the negligence of the carrier, through is driver and its conductor. According to the witness,
right side of the road and turned turtle. Some of the passengers managed to leave the bus the driver and the conductor were on the road walking back and forth. They, or at least,
the best way they could, others had to be helped or pulled out, while the three passengers the driver should and must have known that in the position in which the overturned bus
seated beside the driver, named Bataclan, Lara and the Visayan and the woman behind was, gasoline could and must have leaked from the gasoline tank and soaked the area in
them named Natalia Villanueva, could not get out of the overturned bus. Some of the and around the bus, this aside from the fact that gasoline when spilled, specially over a
passengers, after they had clambered up to the road, heard groans and moans from large area, can be smelt and directed even from a distance, and yet neither the driver nor
inside the bus, particularly, shouts for help from Bataclan and Lara, who said they could the conductor would appear to have cautioned or taken steps to warn the rescuers not to
not get out of the bus. There is nothing in the evidence to show whether or not the bring the lighted torch too near the bus. Said negligence on the part of the agents of the
passengers already free from the wreck, including the driver and the conductor, made carrier come under the codal provisions above-reproduced, particularly, Articles 1733,
any attempt to pull out or extricate and rescue the four passengers trapped inside the 1759 and 1763.
vehicle, but calls or shouts for help were made to the houses in the neighborhood. After
half an hour, came about ten men, one of them carrying a lighted torch made of bamboo
with a wick on one end, evidently fueled with petroleum. These men presumably
approach the overturned bus, and almost immediately, a fierce fire started, burning and
all but consuming the bus, including the four passengers trapped inside it. It would
appear that as the bus overturned, gasoline began to leak and escape from the gasoline
tank on the side of the chassis, spreading over and permeating the body of the bus and
the ground under and around it, and that the lighted torch brought by one of the men
who answered the call for help set it on fire.
That same day, the charred bodies of the four deemed passengers inside the bus were
removed and duly identified that of Juan Bataclan.
The widow instituted a suit to recover damages from Medina. The trial court ruled in
favor of the widow of Bataclan. But the trial court contends that the overturning of the
bus was not the proximate cause of bataclan’s death.
ISSUES & ARGUMENTS

• Whether the overturning of the bus was the proximate cause of Bataclan’s death or
the fire that burned the bus
DIKKI SIAN
Page 54 of 528
52 TEODORO C. UMALI vs. ANGEL BACANI| ESGUERRA, J HOLDING & RATIO DECIDENDI
G.R. No. L-40570 January 30, 1976 Alcala Electric is LIABLE under TORT
• First, by the very evidence of the defendant, there were big and tall banana
FACTS plants at the place of the incident standing on an elevated ground which were
• Quick Version: Bumagyo. Natangay big and small banana plants on an elevated about 30 feet high and which were higher than the electric post supporting the
ground. Tumama sa electric wire ng Alcala Electric Plant. Naputol wire. Sinabihan si electric line, and yet the employees of the defendant who, with ordinary
tao ng corp na ayusin. Bago pa man ma ayos, may pumuntang bata sa live wire. foresight, could have easily seen that even in case of moderate winds the
Nakuryente. Patay. electric line would be endangered by banana plants being blown down, did not
even take the necessary precaution to eliminate that source of danger to the
• Detailed Version: electric line.
• A storm with strong rain hit the Alcala Pangasinan, from 2:00 o'clock in the • Second, even after the employees of the Alcala Electric Plant were already
afternoon and lasted up to about midnight of the same day. During the storm, the aware of the possible damage the storm of May 14, 1972, could have caused
banana plants standing on an elevated ground along the road of said municipality their electric lines, thus becoming a possible threat to life and property, they did
and near the transmission line of the Alcala Electric Plant were blown down and fell not cut off from the plant the flow of electricity along the lines, an act they
on the electric wire. could have easily done pending inspection of the wires to see if they had been
• As a result, the live electric wire was cut, one end of which was left hanging on the cut.
electric post and the other fell to the ground under the fallen banana plants. • Third, employee Cipriano Baldomero was negligent on the morning of the
• On the following morning, at about 9:00 o'clock barrio captain Luciano Bueno of incident because even if he was already made aware of the live cut wire, he did
San Pedro Iii who was passing by saw the broken electric wire and so he warned the not have the foresight to realize that the same posed a danger to life and
people in the place not to go near the wire for they might get hurt. He also saw property, and that he should have taken the necessary precaution to prevent
Cipriano Baldomero, a laborer of the Alcala Electric Plant near the place and anybody from approaching the live wire; instead Baldomero left the premises
notified him right then and there of the broken line and asked him to fix it, but the because what was foremost in his mind was the repair of the line, obviously
latter told the barrio captain that he could not do it but that he was going to look for forgetting that if left unattended to it could endanger life and property.
the lineman to fix it. • On defendants' argument that the proximate cause of the victim's death could
• Sometime after the barrio captain and Cipriano Baldomero had left the place, a be attributed to the parents' negligence in allowing a child of tender age to go
small boy of 3 years and 8 months old by the name of Manuel P. Saynes, whose out of the house alone, We could readily see that because of the
house is just on the opposite side of the road, went to the place where the broken aforementioned series of negligence on the part of defendants' employees
line wire was and got in contact with it. The boy was electrocuted and he resulting in a live wire lying on the premises without any visible warning of its
subsequently died. It was only after the electrocution of Manuel Saynes that the lethal character, anybody, even a responsible grown up or not necessarily an
broken wire was fixed at about 10:00 o'clock on the same morning by the lineman innocent child, could have met the same fate that befell the victim. It may be
of the electric plant. true, as the lower Court found out, that the contributory negligence of the
victim's parents in not properly taking care of the child, which enabled him to
ISSUES & ARGUMENTS leave the house alone on the morning of the incident and go to a nearby place
• W/N the Alcala Electric Company can be liable for TORT. cut wire was very near the house (where victim was living) where the fatal fallen
o <Alcala Electric> I am not be liable under the concept of quasi-delict or wire electrocuted him, might mitigate respondent's liability, but we cannot agree
tort as owner and manager of the Alcala Electric Plant because the with petitioner's theory that the parents' negligence constituted the proximate
proximate cause of the boy's death electrocution could not be due to any cause of the victim's death because the real proximate cause was the fallen
negligence on my part, but rather to a fortuitous event-the storm that live wire which posed a threat to life and property on that morning due to the
caused the banana plants to fall and cut the electric line-pointing out the series of negligence adverted to above committed by defendants' employees and
absence of negligence on the part of his employee Cipriano Baldomero which could have killed any other person who might by accident get into
who tried to have the line repaired and the presence of negligence of the contact with it. Stated otherwise, even if the child was allowed to leave the
parents of the child in allowing him to leave his house during that time. house unattended due to the parents' negligence, he would not have died that
morning where it not for the cut live wire he accidentally touched.
• Art. 2179 of the Civil Code provides that if the negligence of the plaintiff
(parents of the victim in this case) was only contributory, the immediate and
Page 55 of 528
proximate cause of the injury being the defendants' lack of due care, the
plaintiff may recover damages, but the courts shall mitigate the damages to be
awarded. This law may be availed of by the petitioner but does not exempt him
from liability. Petitioner's liability for injury caused by his employees negligence
is well defined in par. 4, of Article 2180 of the Civil Code, which states:
• The owner and manager 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 tile occasion of their functions.
• The negligence of the employee is presumed to be the negligence of the
employer because the employer is supposed to exercise supervision over the
work of the employees. This liability of the employer is primary and direct
(Standard Vacuum Oil Co. vs. Tan and Court of Appeals, 107 Phil. 109). In fact
the proper defense for the employer to raise so that he may escape liability is to
prove that he exercised, the diligence of the good father of the family to
prevent damage not only in the selection of his employees but also in
adequately supervising them over their work. This defense was not adequately
proven as found by the trial Court, and We do not find any sufficient reason to
deviate from its finding.
FRANK TAMARGO
Page 56 of 528
53 Bacarro v Castaño | Relova • Had Montefalcon slackened the speed of the jeep at the time the truck was
No. L-34597 November 5, 1982 | 118 SCRA 187 overtaking it, instead of running side by side with the cargo truck, there would have
been no contact and accident. He should have foreseen that at the speed he was
FACTS running, the vehicles were getting nearer the bridge and as the road was getting
• In the afternoon of April 1, 1960, Castaño boarded a jeepney as a paying passenger narrower the truck would be to close to the jeep and would eventually sideswiped it.
at Oroquieta bound for Jimenez, Misamis Occidental. It was then filled to capacity, Otherwise stated, he should have slackened his jeep when he swerved it to the right
with twelve (12) passengers in all. 'The jeep was running quite fast and the jeep while to give way to the truck because the two vehicles could not cross the bridge at the
approaching the Sumasap bridge there was a cargo truck which blew its horn for a same time
right of way. The jeep gave way but did not change speed such that when the jeep
gave way it turned to the right and continued running with the same speed. In so The hazards of modern transportation demand extraordinary diligence. A
doing the driver was not able to return the jeep to the proper place instead, it ran common carrier is vested with public interest. Under the new Civil Code, instead
obliquely towards the canal; that is why, the jeep, with its passengers fell to the of being required to exercise mere ordinary diligence a common carrier is
ditch. When the jeep was running in the side of the road for few meters, naturally, exhorted to carry the passengers safely as far as human care and foresight can
the jeep was already inclined and he was pushed by the two passengers beside him; provide "using the utmost diligence of very cautious persons." (Article 1755).
when he was clinging, his leg and half of his body were outside the jeep when it Once a passenger in the course of travel is injured, or does not reach his
reached the canal. His right leg was sandwiched by the body of the jeep and the destination safely, the carrier and driver are presumed to be at fault.
right side of the ditch, thus his right leg was broken.
• On appeal, petitioners alleged that respondent Court of Appeals erred (1) in finding
contributory negligence on the part of jeepney driver appellant Montefalcon for
having raced with the overtaking cargo truck to the bridge instead of slackening its
speed, when the person solely responsible for the sideswiping is the unlicensed
driver of the overtaking cargo truck; (2) in finding the jeepney driver not to have
exercised extraordinary diligence, human care, foresight and utmost. diligence of
very cautious persons, when the diligence required pursuant to Article 1763 of the
New Civil Code is only that of a good father of a family since the injuries were
caused by the negligence of a stranger; and (3) in not considering that appellants
were freed from any liability since the accident was due to fortuitous event - the
sideswiping of the jeepney by the overtaking cargo truck..
ISSUES & ARGUMENTS
W/N the petitioners should be held liable for injury of Castaño?
YES. As there was a contract of carriage between the Castaño and the herein
petitioners in which case the Court of Appeals correctly applied Articles 1733,
1755 and 1766 of the Civil Code which require the exercise of extraordinary
diligence on the part of petitioner Montefalcon, as the driver.
• The fact is, petitioner-driver Montefalcon did not slacken his speed but instead
continued to run the jeep at about forty (40) kilometers per hour even at the time
the overtaking cargo truck was running side by side for about twenty (20) meters
and at which time he even shouted to the driver of the truck.
TEL VIRTUDEZ
Page 57 of 528
54 Phoenix Construction v IAC| Feliciano • Dionisio's negligence was not of an independent and overpowering nature as to cut,
G.R. No. L-65295 March 10, 1987 | as it were, the chain of causation in fact between the improper parking of the dump
truck and the accident, nor to sever the juris vinculum of liability.
FACTS • We hold that Dionisio's negligence was "only contributory," that the "immediate
• Early morning of November 15, 1975 at about 1:30am, Leonardo Dionisio was on and proximate cause" of the injury remained the truck driver's "lack of due care"
his way home from a cocktails-and-dinner meeting with his boss. During the and that consequently respondent Dionisio may recover damages though such
cocktails phase of the evening, Dionisio had taken "a shot or two" of liquor. damages are subject to mitigation by the courts (Art. 2179 Civil Code of the
Dionisio was driving his Volkswagen car and had just crossed the intersection of Philippines)
General Lacuna and General Santos Streets at Bangkal, Makati, not far from his • Petitioner Carbonel's proven negligence creates a presumption of negligence on the
home, and was proceeding down General Lacuna Street, when his car headlights (in part of his employer Phoenix in supervising its employees properly and adequately.
his allegation) suddenly failed. He switched his headlights on "bright" and thereupon The respondent appellate court in effect found, correctly in our opinion, that
he saw a Ford dump truck looming some 2-1/2 meters away from his car. The Phoenix was not able to overcome this presumption of negligence.
dump truck, owned by and registered in the name of petitioner Phoenix • Turning to the award of damages and taking into account the comparative
Construction Inc., was parked on the right hand side of General Lacuna Street negligence of private respondent Dionisio on one hand and petitioners Carbonel
facing the oncoming traffic. The dump truck was parked askew (not parallel to the and Phoenix upon the other hand, we believe that the demands of substantial justice
street curb) in such a manner as to stick out onto the street, partly blocking the way are satisfied by allocating most of the damages on a 20-80 ratio. Thus, 20% of the
of oncoming traffic. There were no lights nor any so-called "early warning" reflector damages awarded by the respondent appellate court, except the award of P10,000.00
devices set anywhere near the dump truck, front or rear. The dump truck had earlier as exemplary damages and P4,500.00 as attorney's fees and costs, shall be borne by
that evening been driven home by petitioner Armando U. Carbonel, its regular private respondent Dionisio; only the balance of 80% needs to be paid by
driver, with the permission of his employer Phoenix, in view of work scheduled to petitioners Carbonel and Phoenix who shall be solidarity liable therefor to the
be carried out early the following morning, Dionisio claimed that he tried to avoid a former. The award of exemplary damages and attorney's fees and costs shall be
collision by swerving his car to the left but it was too late and his car smashed into borne exclusively by the petitioners. Phoenix is of course entitled to reimbursement
the dump truck. As a result of the collision, Dionisio suffered some physical injuries from Carbonel. We see no sufficient reason for disturbing the reduced award of
including some permanent facial scars, a "nervous breakdown" and loss of two gold damages made by the respondent appellate court.
bridge dentures.
• Dionisio commenced an action for damages in the Court of First Instance of
Pampanga which rendered judgment in his favor.
• On appeal to IAC, the decision was affirmed with modification as to the amount of
damages awarded.
ISSUES & ARGUMENTS
W/N Phoenix should be held liable for the damage incurred by Dionisio,
notwithstanding the allegation that the latter had no curfew pass and thus drove
speedily with his headlights off?
YES. The collision between the dump truck and the Dionisio's car would in all
probability not have occurred had the dump truck not been parked askew without
any warning lights or reflector devices. The improper parking of the dump truck
created an unreasonable risk of injury for anyone driving down General Lacuna
Street and for having so created this risk, the truck driver must be held
responsible. TEL VIRTUDEZ
Page 58 of 528
55 Smith Bell and Company v CA | Feliciano consequences arising from the failure of the "Don Carlos" to keep a "proper
G.R. No. L-56294, May 20, 1991 | look-out" must be borne by the "Don Carlos."
• The third factor constitutive of negligence on the part of the "Don Carlos"
FACTS relates to the fact that Second Mate Benito German was, immediately before
• In the early morning of 3 May 1970—at exactly 0350 hours, on the approaches to and during the collision, in command of the "Don Carlos."
the port of Manila near Caballo Island, a collision took place between the M/V • Second Mate German simply did not have the level of experience, judgment and
"Don Carlos," an inter-island vessel owned and operated by private respondent skill essential for recognizing and coping with the risk of collision as it presented
Carlos A. Go Thong and Company ("Go Thong"), and the M/S "Yotai Maru," a itself that early morning when the "Don Carlos," running at maximum speed and
merchant vessel of Japanese registry. having just overtaken the "Don Francisco" then approximately one mile behind to
• The "Don Carlos" was then sailing south bound leaving the port of Manila for the starboard side of the "Don Carlos," found itself head-on or nearly head on vis-a-vis
Cebu, while the "Yotai Maru" was approaching the port of Manila, coming in from the "Yotai Maru. " It is essential to point out that this situation was created by the
Kobe, Japan. "Don Carlos" itself.
• The bow of the "Don Carlos" rammed the portside (left side) of the "Yotai Maru"
inflicting a three (3) cm. gaping hole on her portside near Hatch No. 3, through
which seawater rushed in and flooded that hatch and her bottom tanks, damaging all
the cargo stowed therein.
• The consignees of the damaged cargo got paid by their insurance companies. The
insurance companies in turn, having been subrogated to the interests of the
consignees of the damaged cargo, commenced actions against private respondent
Go Thong for damages sustained by the various shipments.
• 2 Civil Cases were filed against Go Thong. In Case No.1, the SC ruled through JBL
Reyes that the "Don Carlos" to have been negligent rather than the "Yotai Maru”.
This was contrary to the findings of the CA.
• This is Case No. 2. The parties agreed that the cases be tried under the same issues
and that the evidence presented in one case would be simply adopted in the other.
ISSUES & ARGUMENTS
W/N Don Carlos is the proximate cause of the collision.
"Don Carlos" had been negligent and that its negligence was the sole proximate
cause of the collision and of the resulting damages.
Three factors were considered in determining who the proximate cause is:
The first of these factors was the failure of the "Don Carlos" to comply with the
requirements of Rule 18 (a) of the International Rules of the Road
This has something to do with foresight and safety measure which the captain should
observe another ship is approaching.
• The second circumstance constitutive of negligence on the part of the "Don

Carlos" was its failure to have on board that night a "proper look-out" as
required by Rule I (B) Under Rule 29 of the same set of Rules, all JON LINA
Page 59 of 528
56 Fernando v CA |Medialdea
G.R. No. L-92087, May 8, 1992 | HOLDING & RATIO DECIDENDI
We find no compelling reason to grant the petition. We affirm.
FACTS
• On November 7, 1975, Bibiano Morta, market master of the Agdao Public Market We do not subscribe to this view. While it may be true that the public respondent has
filed a requisition request with the Chief of Property of the City Treasurer's Office been remiss in its duty to re-empty the septic tank annually, such negligence was not a
for the re-emptying of the septic tank in Agdao. continuing one. Upon learning from the report of the market master about the need to
• An invitation to bid was issued to Aurelio Bertulano, Lito Catarsa, Feliciano Bascon, clean the septic tank of the public toilet in Agdao Public Market, the public respondent
Federico Bolo and Antonio Suñer, Jr. Bascon won the bid. immediately responded by issuing invitations to bid for such service. Thereafter, it
• On November 26, 1975 Bascon was notified and he signed the purchase order. awarded the bid to the lowest bidder, Mr. Feliciano Bascon . The public respondent,
• However, before such date, specifically on November 22, 1975, bidder Bertulano with therefore, lost no time in taking up remedial measures to meet the situation. It is likewise
four other companions namely Joselito Garcia, William Liagoso, Alberto Fernando an undisputed fact that despite the public respondent's failure to re-empty the septic tank
and Jose Fajardo, Jr. were found dead inside the septic tank. since 1956, people in the market have been using the public toilet for their personal
• The bodies were removed by a fireman. One body, that of Joselito Garcia, was taken necessities but have remained unscathed.
out by his uncle, Danilo Garcia and taken to the Regional Hospital but he expired
there. In view of this factual milieu, it would appear that an accident such as toxic gas leakage
• The City Engineer's office investigated the case and learned that the five victims from the septic tank is unlikely to happen unless one removes its covers. The accident in
entered the septic tank without clearance neither from it nor with the knowledge the case at bar occurred because the victims on their own and without authority from the
and consent of the market master. public respondent opened the septic tank. Considering the nature of the task of
• In fact, the septic tank was found to be almost empty and the victims were emptying a septic tank especially one which has not been cleaned for years, an ordinarily
presumed to be the ones who did the re-emptying. prudent person should undoubtedly be aware of the attendant risks. The victims are no
• Dr. Juan Abear of the City Health Office autopsied the bodies and in his reports, exception; more so with Mr. Bertulano, an old hand in this kind of service, who is
put the cause of death of all five victims as "asphyxia" caused by the diminution of presumed to know the hazards of the job. His failure, therefore, and that of his men to
oxygen supply in the body working below normal conditions. The lungs of the five take precautionary measures for their safety was the proximate cause of the accident.
victims burst, swelled in hemmorrhagic areas and this was due to their intake of
toxic gas, which, in this case, was sulfide gas produced from the waste matter inside To be entitled to damages for an injury resulting from the negligence of another, a
the septic tank. claimant must establish the relation between the omission and the damage. He must
• Petitioners, children of the deceased, file a complaint for damages. prove under Article 2179 of the New Civil Code that the defendant's negligence was the
• TC: Dismissed. immediate and proximate cause of his injury. Proximate cause has been defined as that
• CA: In favor of petitioners, based on social justice. cause, which, in natural and continuous sequence unbroken by any efficient intervening
• CA on MR: Reversed, in favor of Davao City. cause, produces the injury, and without which the result would not have occurred. Proof
of such relation of cause and effect is not an arduous one if the claimant did not in any
ISSUES & ARGUMENTS way contribute to the negligence of the defendant. However, where the resulting injury
was the product of the negligence of both parties, there exists a difficulty to discern
W/N Davao City is the proximate cause. which acts shall be considered the proximate cause of the accident.
o Petitioners fault the city government of Davao for failing to clean a septic
tank for the period of 19 years resulting in an accumulation of hydrogen
sulfide gas which killed the laborers. They contend that such failure was
compounded by the fact that there was no warning sign of the existing
danger and no efforts exerted by the public respondent to neutralize or
render harmless the effects of the toxic gas. They submit that the public
respondent's gross negligence was the proximate cause of the fatal
incident.
JON LINA
Page 60 of 528
57 Austria vs. CA | Quisumbing
G.R. No. 133323, March 9,2000 | 327 SCRA 668
FACTS
• The accused Alberto Austria was driving a Ford Fiera owned by Noceda along
the Olongapo-Gapan road in Pampanga coming from the Airport headed for
Bataan. There were 10 passengers aboard. The information stated that Austria
was speeding.
• The vehicle’s tire hit a stone lying on the road which caused Austria to lose
control of the vehicle and subsequently collided with the rear of an improperly
parked cargo truck trailer driven by Rolando Flores, his co-accused.
• The accident caused injuries to 4 of Austria’s passengers and caused the death
of another passenger Virginia Lapid. Flores, remained at large during the course
of the trial.
• The lower court found Austria guilty of Reckless Imprudence resulting in
Homicide and Serious Physical Injuries. The CA affirmed the LC’s decision.
ISSUES & ARGUMENTS
W/N Austria is guilty of Negligence?

• Austria contends that he was driving at a moderate speed and on the lane properly
belonging to him and that Flores, by parking his vehicle improperly without any
warning device, caused the collision.
YES
• The findings of the CA concerning Austria’s negligence are factual in nature
and hence cannot be reviewed by the SC in a petition for review on certiorari
and this case does not come within the exceptions.
• The case of Phoenix Construction vs IAC, although similar in facts with the
case at bar is not applicable in this case. In Phoenix, the SC held that the driver
of the improperly parked vehicle was the liable and the colliding vehicle was
contributorily liable.
• The SC however agreed with the CA in the latter’s observation that “ That
Austria had no opportunity to avoid the collision is his own making and this
should not relieve him of liability.” Patently, the negligence of Austria as the
driver is the immediate and proximate cause of the collision.
• Austria’s contention that the award of damages was error on the part of the CA
since the medcerts and receipts presented did not directly reveal the relation of
the documents to the accident is flawed. SC said that these docments are amply
supported by the evidence on record and again factual findings are binding on
the SC.
JOHAN UY
Page 61 of 528
58 Consolidated Bank vs CA | Carpio
G.R. No. 138569, Sept. 11, 2003 | 410 SCRA 562
FACTS • The TC used the rules on contractual obligations while the CA used the rules on
• Consolidated bank(now known as Solidbank), is a corp engaged in banking and quasi-delict. SC held that the bank was liable for breach of contract due to
private respondent LC diaz and Co. CPA’s is a an accounting partnership. negligence. The rules on simple loan apply in this case. The law imposes on banks
Sometime in March 1976, Diaz opened a savings account with the bank. a high standard in view of the fiduciary nature of its business. This fiduciary
• In 1991, Diaz, through its cashier, Macaraya, filled up a savings (cash) deposit slip relationship is deemed written into every deposit agreement and imposes a higher
for 900Php and check deposit slip for 50Php. Macarya instructed the messenger degree of diligence than “a good father of a family”. However this does not convert
Calapre to deposit it and even gave the latter the passbook. the contract into a trust agreement. The law merely requires the bank a higher
• Calapre deposited the money with Solidbank but since he had to make another standard of integrity and performance in complying with its obligations under the
deposit at another bank, he left the passbook. When he came back, the teller (no. 6) contract.
already gave the passbook to someone else. • When the passbook was in the bank’s hands, the law imposes that high degree of
• Macaraya went to Solidbank and deposited another 200,000 peso check and the diligence in safeguarding the passbook. The tellers’ must also exercise that degree of
teller told Macaraya that she did not remember to whom she gave the passbook. diligence. They must return the passbook only to the depositor or his authorized
This teller gave Macaraya a deposit slip dated on that very same day for a deposit of representative.
a 90,000 peso PBC check of Diaz. This PBC account had been “long closed”. • In culpa contractual, once the plaintiff proves breach on the part of the defendant,
• The next day, CEO luis Diaz called up the bank to stop any transaction involving there is the presumption that the latter was negligent or at fault. The burden is on
the stolen passbook. Diaz also learned of the unauthorized withdrawal of 300,000 the defendant to prove that he was not negligent. While in culpa aquiliana, the
the same day the passbook was stolen. The withdrawal slip bore the signatures of plaintiff has the burden of proving the defendant’s negligence.
Luis and Murillo. They however denied signing the said withdrawal slip. A certain • Solidbank is bound by the negligence of its employees under respondeat superior
Noel Tamayo received the 300k. principle. The defense of exercising the diligence in the selection and supervision of
• Diaz charged its messenger Ilagan and one Mendoza with Estafa through employees is not a complete defense in culpa contractual unlike in culpa aquiliana.
falsification of commercial docs but the charges were dismissed. • Had the passbook not fallen into the hands of the impostor, the loss would not have
• In 1992, Diaz asked Solidbank to give its money back, the latter refused. The occurred. Hence the proximate cause of the loss to Diaz was the bank’s negligence
collection case was ruled in favor of Solidbank. The TC used the rules written on in not returning the passbook to Calapre and not the CA’s contention that the teller
the passbook in absolving the bank saying that “possession of this book(passbook) should have called up Diaz first.
shall raise the presumption of ownership and any payments made by the bank upon • Last clear chance doctrine is not applicable because this is culpa contractual.
the production of the book…shall have the same effect as if made to the depositor • However, the SC mitigated the damages due to Diaz because he was contributorily
personally.” Tamayo had possession of the passbook at the time of the withdrawal liable in allowing the deposit slip to fall into the hands of an impostor.
and also had the withdrawal slip with the needed signatures. The signatures
matched those of the specimen signatures in the bank.
• TC said that the bank acted with care and observed the rules on savings account
when it allowed the withdrawal and that Diaz’s negligence was the proximate cause
of the loss. The CA reversed saying that the teller of the bank should have been
more careful in allowing the withdrawal. She should have called up Diaz since the
amount was substantial. Thus the CA said that although Diaz was also negligent in
allowing a messenger to make its deposits and said messenger left the passbook, the
proximate cause of the loss was the bank. CA applied the “last clear chance rule”.
ISSUES & ARGUMENTS
W/N Solidbank was Negligent
JOHAN UY
Page 62 of 528
59 Philippine National Railway vs. CA | Nachura • It is true that one driving an automobile must use his faculties of seeing and hearing
G.R. No. 1576568 October 15, 2007 | 536 SCRA 147 when nearing a railroad crossing. However, the obligation to bring to a full stop
vehicles moving in public highways before traversing any “through street” only
FACTS accrues from the time the said “through street” or crossing is so designated and
• In the early afternoon of April 27, 1992, Jose Amores was traversing the railroad sign-posted. From the records, it can be inferred that Amores exercised all the
tracks in Kahilum street, Pandacan, Manila. Before crossing the railroad track, he necessary precautions required of him to avoid injury to himself and others.
stopped for a while then proceeded accordingly. Unfortunately, just as Amores was
crossing the intersection, a PNR train turned up and collided with the car. After the
impact, the car was dragged 10 meters beyond the center crossing. Amores died as a
consequence thereof.
• At the time of the mishap, there was neither a signal nor a crossing bar in the
intersection to warn the motorists of the incoming train. Aside for the railroad track,
the only visible sign was a defective standard sign board “ STOP, LOOK and
LISTEN. No whistle blow from the train was likewise heard before it finally
bumped the car of Amores.
• The heir of Amores filed a complaint for damages against PNR and Virgilio Borja,
PNR’s locomotive driver at the time of the incident. In the complaint, they avvered
that the train’s speedometer was defective and that the negligence of PNR and Borja
was the proximate cause of the mishap for their failure to take proper precautions to
prevent injury.
• In their answer, PNR denied the allegations, stating that the train was railroad
worthy and without any defect. According to them, the proximate cause of Amores’
death was his own carelessness and negligence, and his wanton disregard for traffic
rules and regulations in crossing tracks and trying to beat the approaching train.
• RTC ruled in favor of PNR and BORJA. CA reversed the RTC decision. CA
awarded the cost of damage and moral damages in favor of the heirs of Amores.
ISSUES & ARGUMENTS
W/N the appellate court was correct in ascribing negligence on the part of PNR
and Borja
THE APPELLATE COURT WAS CORRECT IN ASCRIBING NEGLIGENCE

ON THE PART OF PNR AND BORJA.
• Negligence has been defined as “the failure to observe for the protection of the
interests of another person that degree of care, precaution and vigilance which the
circumstances justly demand, whereby such other person suffers injury.”
• It is the responsibility of the railroad company to use reasonable care to keep signal
devices in working order. Failure to do so is an indication of negligence. The failure
of PNR to put a cross bar, flagman or switchman, or a semaphore is an evidence of
negligence and disregard of the safety of the public even if there is no law or
ordinance requiring it. VP PADILLA
Page 63 of 528
60 PLDT vs. CA | Regalado • The presence of warning signs could not have completely prevented the accident;
G.R. No. L-57079 September 29, 1989 | 178 SCRA 94 the only purpose of said signs was to inform and warn the public of the presence of
excavations on the site. The private respondents already knew of the presence of
FACTS said excavations. It was not the lack of knowledge of these excavations which
• The Esteban’s jeep ran over a mound of earth and fell into an open trench, an caused the jeep of respondents to fall into the excavation but the unexplained
excavation undertaken by PLDT for the installation of its underground conduit sudden swerving of the jeep from the inside lane towards the accident mound
system. • Furthermore, Antonio Esteban had the last clear chance or opportunity to avoid
• Esteban failed to notice the open trench which was left uncovered because of the the accident
darkness and the lack of any warning light or signs • A person claiming damages for the negligence of another has the burden of
• The Estebans allegedly sustained injuries proving the existence of such fault or negligence causative thereof. The facts
• PLDT, denies liability on the contention that the injuries sustained by respondent constitutive of negligence must be affirmatively established by competent
spouses were the result of their own negligence and that the entity which should be evidence. Whosoever relies on negligence for his cause of action has the burden in
held responsible, Barte an independent contractor which undertook the the first instance of proving the existence of the same if contested, otherwise his
construction action must fail.
• LC ruled in favor of Estebans
• However, the CA found that that the relationship of Barte and PLDT should be
viewed in the light of the contract between them and, under the independent
contractor rule, PLDT is not liable for the acts of an independent contractor. Still,
CA affirmed LC decision.
ISSUES & ARGUMENTS
W/N PLDT is liable for the injuries sustained by the Estebans
The accident which befell the Estebans was due to the lack of diligence of
respondent Antonio Esteban and was not imputable to negligent omission on the
part of petitioner PLDT
• The accident was not due to the absence of warning signs, but to the unexplained
abrupt swerving of the jeep from the inside lane. That may explain plaintiff-
husband's insistence that he did not see the ACCIDENT MOUND for which
reason he ran into it.
• The jeep was not running at 25 kilometers an hour. At that speed, he could have
braked the vehicle the moment it struck the ACCIDENT MOUND. The jeep
would not have climbed the ACCIDENT MOUND several feet as indicated by the
tiremarks. The jeep must have been running quite fast.
• Plaintiff-husband had not exercised the diligence of a good father of a family
to avoid the accident.
• The negligence of Antonio Esteban was not only contributory to his injuries and
those of his wife but goes to the very cause of the occurrence of the accident,
as one of its determining factors, and thereby precludes their right to recover
damages
BYRON PEREZ
Page 64 of 528
61 Food Terminal Inc. vs. CA and Basic Foods
GR 108397, January 21, 2000/ Pardo
FACTS
• Basic Foods (basic) is engaged in the business of manufacturing foos and allied
products. One of which is Red Star compressed yeast which should be
refrigerated in a space to avoid spoiling.
• Food Terminal Inc. (FTI) was engaged in he storing of goods and merchandise
for compensation at its refrigerated warehouses in Taguig.
• During the period for June 10, 1987 to June 23, 1987, Basic deposited FTI’s
warehouse 1,770 cartons of the said yeast. But due to the failure to control the
temperature, a total of 383.6 cartons of the said yeast were spoiled. The
monetary value of which amounted to at least P16,112.00.
• FTC contends that eventhough it failed to maintain the said temperature, they
should not compensate for the yeast due to stipulations of the party in the
contract that if certain situations arise (which the failure to control the
temperature is one of them), then they are not liable for the damage.
ISSUES & ARGUMENTS
Was FTC Negligent?
Yes (Duh!!)
• Petitioner practically admitted that it failed to maintain the agreed

temperature of the cold storage area to 2-4 degrees centigrade at all
times.
• Since Negligence has been established, petitioners liability from
damages is inescapable.
CHRIS PALARCA
Page 65 of 528
62 German Marine Agencies, Inc. vs. NLRC | Gonzaga-Reyes
G.R. No. 142049, January 30, 2001 | 350 SCRA 629
FACTS
• Froilan de Lara was hired by German Marine Agencies, Inc. to work as a radio
officer on board its vessel, M/V T.A. VOYAGER.
• While the vessel was docked at the port of New Zealand, de Lara was taken ill
which was brought to the attention of the master of the vessel.
• However, instead of disembarking him so he may receive immediate medical
attention, the master of the vessel proceeded to Manila, a voyage of ten days.
• Upon arrival in Manila, he was not immediately disembarked but was made to wait
for several hours until a vacant slot in the Manila pier was available.
• It was only upon the insistence of de Lara’s relatives that petitioners were compelled
to disembark him and finally commit him to a hospital.
• He was confined in the Manila Doctors Hospital, where he was treated.
• After being discharged from the hospital, he demanded from German Marine the
payment of his disability benefits and unpaid balance of his sickness wages, pursuant
to the Standard Employment Contract of the parties.
• De Lara filed a complaint with the NLRC for payment of disability benefits and the
balance of his sickness wages.
• Labor Arbiter and NLRC ruled in favor of de Lara.
ISSUES & ARGUMENTS

• W/N German Marine is guilty of negligence thereby liable for damages?
YES. (Just repeat the facts.)

• There is no doubt that the failure of petitioners to provide private respondent with
the necessary medical care caused the rapid deterioration and inevitable worsening
of the latter’s condition, which eventually resulted in his sustaining a permanent
disability.
• Negligence not only exists but was deliberately perpetrated by petitioners by its
arbitrary refusal to commit the ailing de Lara to a hospital in New Zealand or at any
nearest port. Such deprivation of immediate medical attention appears deliberated
by the clear manifestation from petitioner’s own words which states that, “the
proposition of the complainant that respondents should have taken the complainant to the nearest
port of New Zealand is easier said than done. The deviation from the route of the vessel will
definitely result to loss of a fortune in dollars.”
NOTE: Main issue of this case is whether German Marine is liable for disability benefits
and sickness wages which hinges on the question of who must declare the disability of
the employee, whether an accredited doctor/hospital or not. Court affirmed the decision
of the labor arbiter to give more weight to the doctors who treated de Lara, even if they
were not accredited with the POEA. AYEN QUA
Page 66 of 528
63 Tan vs. Northwest Airlines| Pardo
G.R. No. 102358, March 3, 2000 | 263 SCRA 327
FACTS
• On May 31, 1994, Priscilla Tan(petitioner) and Connie Tan boarded NWA Flight 29
in Chicago USA bound for Manila, Phils. It had a stop-over in Detroit.
• They arrived at the NAIA on June 1, 1994.
• Petitioner and her companion found out that their luggage was missing.
• They went back the next day and were informed that their luggage were still in
another plane in Tokyo.
• On June 3, 1994, they recovered their baggage but discovered that some of its
contents were destroyed and soiled.
• On June 15 and 22, 1994, petitioner sent demand letters to Northwest but the latter
did not respond.
• Hence, petitioner filed the case against respondents.
• RTC ruled in favor of petitioner and ordered respondents to pay petitioner: 1.
Actual damages – P 15k; 2. Moral damages – P100k; 3. Exemplary Damages – 30k;
atty’s fees and costs.
• CA affirmed but deleted the award of moral and exemplary damages.
•
ISSUES & ARGUMENTS
• W/N Northwest Airlines was liable for moral and exemplary damages for
willful misconduct and breach of the contract of carriage?
NO. NWA not guilty of willful misconduct.

• For willful misconduct to exist, there must be a showing that he acts complained of
were impelled by an intention to violate the law, or were in persistent disregard of
one’s rights. It must be evidenced by a flagrantly or shamefully wrong or improper
conduct.
• Nothing in the conduct of respondent which showed that they were motivated by
malice or bad faith.
• NWA did not deny that baggages of petitioner were not loaded in Flight 29. The
baggages could not be carried on the same flight due to weight and balance
restrictions.
• However, the baggage were loaded in another NWA flight.
• When petitioner received her soiled baggages, NWA offered to either: 1. Reimburse
the cost or repair of the bags or 2. Reimburse the cost for the purchase of new bags
upon submission of receipts.
• BAD FAITH – does not simply connote bad judgment or negligence, it imports a
dishonest purpose or some moral obliquity and conscious doing of a wrong, a
breach of known duty through some motive or interest or ill-will that partakes of
the nature of fraud.
DEANNE REYES
Page 67 of 528
64 Collin Morris and Thomas Whittier v CA, Scandinavian Airlines System (SAS)| attended wit h a pubic duty. Neglect or malfeasance of the carrier's employees
Pardo naturally could give ground for an action for damages."
G.R. No. 127957 February 21, 2001 | • In awarding moral damages for breach of contract of carriage, the breach
must be wanton and deliberately injurious or the one responsible acted
FACTS fraudulently or with malice or bad faith.Where in breaching the contract of
• Petitioners Collin A. Morris and Thomas P. Whittier were American citizens; the carriage the defendant airline is not shown to have acted fraudulently or in bad
vice-president for technical service and the director for quality assurance, faith, liability for damages is limited to the natural and probable consequences
respectively, of Sterling Asia, a foreign corporation with regional headquarters at of the breach of obligation which the parties had foreseen or could have
No. 8741 Paseo de Roxas, Makati City. Respondent Scandinavian Airline System reasonably foreseen. In that case, such liability does not include moral and
(SAS for brevity) has been engaged in the commercial air transport of passengers exemplary damages. Moral damages are generally not recoverable in culpa
globally. contractual except when bad faith had been proven. However, the same
• Petitioners had a series of business meetings in Japan from Feb 14-22 1978, thus damages may be recovered when reach of contract of carriage results in the
they made travel arrangements with their agent in Staats Travel Service. They were death of a passenger. (Ganto, simply put, the GR: no moral damages kapag arising from
book in 1st class, SAS Flight SK893, Manila-Tokyo for Feb 14, 3:50 pm. contract of carriage, 1191 remedy mo diba sa breach of contract? EXCEPT: if BF attendant
• On the day of the flight, the limo service agency fetched Morris at Urdaneta and or may nachugi sa plane)
Whittier in Merville. They arrived at MIA at 230pm. They were at the counter • The award of exemplary damages has likewise no factual basis. It is requisite
around 310pm and gave their travel documents to Erlinda Ponce at the reception that the act must be accompanied by bad faith or done in wanton,
desk. Later they realized that their travel documents is not being processed. They fraudulent or malevolent manner—circumstances which are absent in this
called their agent to find out the problem. They learned that they were bumped off case. In addition, exemplary damages cannot be awarded as the requisite
the flight. They insisted to get their flight from Ponce and her supervisor, Mr. Basa. element of compensatory damages was not present.
• Later, they learned the economy section was overbooked, and those who came early • In the instant case, assuming arguendo that breach of contract of carriage may be
were given the option to upgrade to 1st class. Their seats were given away and the attributed to respondent, petitioners' travails were directly traceable to their
flight manifest marked NOSH (no show) after their name, because the check-in failure to check-in on time, which lewd to respondent's refusal to accommodate
counter closed already 40mins before departure. Petitioners were advised to be at them on the flight.
the airport an hour before the flight. They came late, and SAS simply followed
company policies. CA decision affirmed. Petition dismissed.
• Petitioners filed a complaint for damages. RTC awarded:
Moral damages: Morris, 1M; Whittier, 750K exemplary: 200K atty’s fees: 300K
• Petitioners filed an MR to the RTC to increase award, moral damages increased to
1.5M and 1M. CA reversed, hence this petition.
ISSUES & ARGUMENTS

o W/N SAS is liable for damages for breach of contract of carriage?
NO.
• To begin with, it must be emphasized that a contract to transport passengers is

quite different kind and degree from any other contractual relations, and this is
because relation, which an air carrier sustains with the public. Its business is
mainly with the traveling public. It invites people business is mainly with the
traveling public. It invites people to avail [themselves] of the comforts and
advantages it offers. The contract of air carriage, therefore, generates a relation DIANE LIPANA
Page 68 of 528
65 Crisostomo vs. CA | Ynares-Santiago • Respondent is not engaged in the business of transporting either passengers of
G.R. No. 138334, August 25, 2003 | 409 SCRA 528 goods and is therefore not a common carrier. Respondent’s services as a travel
agency include procuring tickets and facilitating travel permits or visas as well as
FACTS booking customers for tours.
• Petitioner Crisostomo contracted the services of respondent Caravan Travel and • A common carrier is bound by law to carry as far as human care and foresight can
Tours International, to arrange and facilitate her booking, ticketing, and provide using the utmost diligence of very cautious persons and with due regard for
accommodation in a tour called “Jewels of Europe.” She was given a 5% discount all circumstances. But since Caravan is a travel agency, it is not bound to observe
and a waived booking fee because her niece, Meriam Menor, was the company’s extraordinary diligence in the performance of its obligations.
ticketing manager. • For them, the standard of care required is that of a good father of a family. This
• Menor went to her aunt’s residence to deliver Crisostomo’s travel documents and connotes reasonable care consistent with that which an ordinarily prudent person
plane tickets and get her payment. Menor told her to be in NAIA on Saturday. would have observed when confronted with a similar situation.
• When Crisostomo got to the airport on Saturday, she discovered that the filight she • We do not concur with the finding that Menor’s negligene concurred with that of
was supposed to take had already departed the previous day. She complained to Crisostomo. No evidence to prove Menor’s negligence.
Menor, and was urged by the latter to take another tour, instead  “British • The negligence of the obligor in the performance of the obligations renders him
Pageant.” liable for damages for the resulting loss suffered by the obligee. Fault or negligence
• Upon returning from Europe, Crisostomo demanded P61,421.70 from Caravan of an obligor consists in the his failure to exercise due care and prudence in the
Tours, representing the difference between the sun she paid for Jewels and the performance of the obligation. The degree of diligence required depends on the
amount she owed the company for British Pageant. Caravan refused. circumstances of the specific obligation and whether one has been negligent is a
• Thus, Crisostomo filed a complaint against Caravan for breach of contract of question of fact that is to be determined in the case.
carriage and damages. The trial court held in favor of Crisostomo, and ordered
Caravan to pay her, because it was negligent in erroneously advising Crisostomo of Petition denied. CA affirmed.
her departure. However, Crisostmo is also guilty of contributory negligence (for
failing to verify the exact date and time of departure). CA declared that Crisostomo
is more negligent. As a lawyer and well-travelled person, she should have known
better. MR of Crisostomo was also denied. Hence this petition.
ISSUES & ARGUMENTS

• W/N respondent Caravan is guilty of negligence and is liable to Crisostomo
for damages.
o Crisostomo: Respondent did not observe the standard of care required of
a common carrier, i.e. extraordinary diligence in the fulfillment of its
obligation.
o Caravan: Menor was not negligent. The date and time of departure was
legibly written on the plane ticket and the travel papers were given 2 days
before the flight. It performed all obligations to enable Crisostomo to join
the group and exercised due diligence in its dealings with the latter.
CARVAN NOT LIABLE FOR DAMAGES.

• A contract of carriage or transportation is one whereby a certain person or
association of persons obligate themselves to transport persons, things, or news
from one place to another for a fixed price. CHRISSIE MORAL
Page 69 of 528
66 Africa vs. Caltex, Boquiren and the CA| Makalintal taxicabs owned by Boquiren; (3) a store where people hang out and possibly smoke
G.R. No. L-12986, March 31, 1966 | 16 SCRA 448 cigarettes is located one meter from the hole of the underground tank; and (4) the
concrete walls adjoining the neighborhood are only 2 ½ meters high at most and
FACTS cannot prevent the flames from leaping over it in case of fire.
• A fire broke out at the Caltex service station in Manila. It started while gasoline was
being hosed from a tank truck into the underground storage, right at the opening of Decision REVERSED. Caltex liable.
the receiving truck where the nozzle of the hose was inserted The fire then spread
to and burned several neighboring houses, including the personal properties and
effects inside them.
• The owners of the houses, among them petitioners here, sued Caltex (owner of the
station) and Boquiren (agent in charge of operation).
• Trial court and CA found that petitioners failed to prove negligence and that
respondents had exercised due care in the premises and with respect to the
supervision of their employees. Both courts refused to apply the doctrine of res ipsa
loquitur on the grounds that “as to its applicability xxx in the Philippines, there seems
to be nothing definite,” and that while the rules do not prohibit its adoption in
appropriate cases, “in the case at bar, however, we find no practical use for such
docrtrine.”
ISSUES & ARGUMENTS
W/N without proof as to the cause and origin of the fire, the doctrine of res ipsa
loquitur should apply as to presume negligence on the part of the appellees.
DOCTRINE OF RES IPSA LOQUITUR APPLIES. CALTEX LIABLE.

• Res ipsa Loquitur is a rule to the effect that “where the thing which caused the injury
complained of is shown to be under the management of defendant or his servants
and the accident is such as in the ordinary course of things does not happen if those
who have its management or control use proper care, it affords reasonable evidence,
in absence of explanation of defendant, that the incident happened because of want
of care.
• The aforesaid principle enunciated in Espiritu vs. Philippine Power and Development Co. is
applicable in this case. The gasoline station, with all its appliances, equipment and
employees, was under the control of appellees. A fire occurred therein and spread to
and burned the neighboring houses. The person who knew or could have known
how the fire started were the appellees and their employees, but they gave no
explanation thereof whatsoever. It is fair and reasonable inference that the incident
happened because of want of care.
• The report by the police officer regarding the fire, as well as the statement of the
driver of the gasoline tank wagon who was transferring the contents thereof into the
underground storage when the fire broke out, strengthen the presumption of
negligence. Verily, (1) the station is in a very busy district and pedestrians often pass
DANI BOLONG
through or mill around the premises; (2) the area is used as a car barn for around 10
Page 70 of 528
67 F.F. Cruz vs. CA| Cortes o that the fire could have been caused by a heated motor or a lit
G.R. No. L-52732 August 29, 1988 |SCRA cigarette
o that gasoline and alcohol were used and stored in the shop; and
FACTS o that workers sometimes smoked inside the shop
o The furniture manufacturing shop of F.F. Cruz in Caloocan City was situated o Even without applying the doctrine of res ipsa loquitur, Cruz's failure to construct
adjacent to the residence of the Mables. a firewall in accordance with city ordinances would suffice to support a finding
o Sometime in August 1971, private respondent Gregorio Mable first of negligence.
approached Eric Cruz, petitioner's plant manager, to request that a firewall be o Even then the fire possibly would not have spread to the neighboring
constructed between the shop and Mable’s residence. The request was houses were it not for another negligent omission on the part of
repeated several times but they fell on deaf ears. defendants, namely, their failure to provide a concrete wall high
o In the early morning of September 6, 1974, fire broke out in Cruz’s shop. enough to prevent the flames from leaping over it. Defendant's negligence,
Cruz’s employees, who slept in the shop premises, tried to put out the fire, but therefore, was not only with respect to the cause of the fire but also with respect to
their efforts proved futile. The fire spread to the Mables’ house. Both the shop the spread thereof to the neighboring houses.
and the house were razed to the ground. o In the instant case, with more reason should petitioner be found guilty
o The Mables collected P35,000.00 on the insurance on their house and the of negligence since it had failed to construct a firewall between its
contents thereof. property and private respondents' residence which sufficiently
o The Mables filed an action for damages against the Cruz’s. complies with the pertinent city ordinances. The failure to comply
o The TC ruled in favor of the Mables. CA affirmed but reduced the award of with an ordinance providing for safety regulations had been ruled by
damages. the Court as an act of negligence [Teague v. Fernandez, G.R. No. L-
29745, June 4, 1973, 51 SCRA 181.]
ISSUES & ARGUMENTS
W/N the doctrine of res ipsa loquitor is applicable to the case.
Yes. The doctrine of res ipsa loquitor is applicable to the case. The CA, therefore,
had basis to find Cruz liable for the loss sustained by the Mables’.
o The doctrine of res ipsa loquitur, may be stated as follows:

o Where the thing which caused the injury complained of is shown to be
under the management of the defendant or his servants and the
accident is such as in the ordinary course of things does not happen if
those who have its management or control use proper care, it affords
reasonable evidence, in the absence of explanation by the defendant,
that the accident arose from want of care. [Africa v. Caltex (Phil.),
Inc., G.R. No. L-12986, March 31, 1966, 16 SCRA 448.]
o The facts of the case likewise call for the application of the doctrine,
considering that in the normal course of operations of a furniture
manufacturing shop, combustible material such as wood chips, sawdust, paint,
varnish and fuel and lubricants for machinery may be found thereon.
o It must also be noted that negligence or want of care on the part of petitioner
or its employees was not merely presumed.
o Cruz failed to construct a firewall between its shop and the residence
of the Mables as required by a city ordinance
NICO CRISOLOGO
Page 71 of 528
68 Ma-ao Sugar Central Co., Inc. vs Court of Appeals | Cruz, J. more prudent steps to prevent such accidents instead of waiting until a life was
G.R. No. 834491, August 27, 1990 | 189 SCRA 88 finally lost because of its negligence.
• The argument that no one had been hurt before because of such derailments is of
FACTS course not acceptable. And neither are we impressed by the claim that the brakemen
• On March 22, 1980, Famoso was riding with a co-employee in the caboose or and the conductors were required to report any defect in the condition of the
"carbonera" of Plymouth No. 12, a cargo train of the petitioner, when the railways and to fill out prescribed forms for the purpose. For what is important is
locomotive was suddenly derailed. He and his companion jumped off to escape that the petitioner should act on these reports and not merely receive and file them.
injury, but the train fell on its side, caught his legs by its wheels and pinned him The fact that it is not easy to detect if the fish plates are missing is no excuse either.
down. He was declared dead on the spot. 1 Indeed, it should stress all the more the need for the responsible employees of the
• The claims for death and other benefits having been denied by the petitioner, the petitioner to make periodic checks and actually go down to the railroad tracks and
herein private respondent filed suit in the Regional Trial Court of Bago City. Judge see if the fish plates were in place.
Marietta Hobilla-Alinio ruled in her favor but deducted from the total damages • It is argued that the locomotive that was derailed was on its way back and that it had
awarded 25% thereof for the decedent's contributory negligence and the total passed the same rails earlier without accident. The suggestion is that the rails were
pension of P41,367.60 private respondent and her children would be receiving from properly aligned then, but that does not necessarily mean they were still aligned
the SSS for the next five years afterwards. It is possible that the fish plates were loosened and detached during its
• The widow appealed, claiming that the deductions were illegal. So did the petitioner, first trip and the rails were as a result already mis-aligned during the return trip. But
but on the ground that it was not negligent and therefore not liable at all. the Court feels that even this was unlikely, for, as earlier noted, the fish plates were
• In its own decision, the Court of Appeals 2 sustained the rulings of the trial court supposed to have been bolted to the rails and could be removed only with special
except as to the contributory negligence of the deceased and disallowed the tools. The fact that the fish plates were not found later at the scene of the mishap
deductions protested by the private respondent. may show they were never there at all to begin with or had been removed long
ISSUES & ARGUMENTS before.
• W/N the respondent court is at fault for finding the petitioner guilty of negligence • At any rate, the absence of the fish plates – whatever the cause or reason – is by
notwithstanding its defense of due diligence under Article 2176 of the Civil Code itself alone proof of the negligence of the petitioner. Res ipsa loquitur. The doctrine
and for disallowing the deductions made by the trial court. was described recently in Layugan v. Intermediate Appellate Court, 4 thus:
Where the thing which causes injury is shown to be under the
HOLDING & RATIO DECIDENDI management of the defendant, and the accident is such as in the
To say the least, the Court views with regret the adamant refusal of petitioner Ma-ao ordinary course of things does not happen if those who have the
Sugar Central to recompense the private respondent for the death of Julio Famoso, their management use proper care, it affords reasonable evidence, in the
main source of support, who was killed in line of duty while in its employ. It is not only a absence of an explanation by the defendant, that the accident arose
matter of law but also of compassion on which we are called upon to rule today. We from want of care.
shall state at the outset that on both counts the petition must fail.
• Investigation of the accident revealed that the derailment of the locomotive was
caused by protruding rails which had come loose because they were not connected
and fixed in place by fish plates. Fish plates are described as strips of iron 8" to 12"
long and 3 1/2" thick which are attached to the rails by 4 bolts, two on each side, to
keep the rails aligned. Although they could be removed only with special equipment,
the fish plates that should have kept the rails aligned could not be found at the scene
of the accident.
• There is no question that the maintenance of the rails, for the purpose inter alia of
preventing derailments, was the responsibility of the petitioner, and that this
responsibility was not discharged. According to Jose Treyes, its own witness, who
was in charge of the control and supervision of its train operations, cases of
derailment in the milling district were frequent and there were even times when such
derailments were reported every hour. 3 The petitioner should therefore have taken
JAY DUHAYLONGSOD
Page 72 of 528
69 Batiquin v. Court of Appeals | Davide, Jr. when and only when, under the circumstances involved, direct evidence is absent
G.R. No. 118231 July 5, 1996| 258 SCRA 334 and not readily available.
• In the instant case, all the requisites for recourse to the doctrine are present. First,
FACTS the entire proceedings of the caesarean section were under the exclusive control of
• On Sept 1988, Petitioner Dr. Batiquin performed a simple caesarean section on Dr. Batiquin. In this light, the private respondents were bereft of direct evidence as
Respondent Mrs. Villegas when the latter gave birth. Soon after leaving the hospital, to the actual culprit or the exact cause of the foreign object finding its way into
respondent began to suffer abdominal pains and complained of being feverish. private respondent Villegas's body, which, needless to say, does not occur unless
• The abdominal pains and fever kept on recurring and this prompted respondent to through the intersection of negligence. Second, since aside from the caesarean
consult with another doctor, Dr. Kho (not Hayden). When Dr. Kho opened the section, private respondent Villegas underwent no other operation which could have
abdomen of respondent to check her out respondent’s infection, she discovered that caused the offending piece of rubber to appear in her uterus, it stands to reason that
a piece of rubber material, which looked like a piece of rubber glove and was such could only have been a by-product of the caesarean section performed by Dr.
deemed a foreign body, was the cause of the respondent’s infection. Batiquin. The petitioners, in this regard, failed to overcome the presumption of
• Respondent then sued petitioner for damages. RTC held in favor of petitioner. CA negligence arising from resort to the doctrine of res ipsa loquitur. Dr. Batiquin is
reversed, ruling for the respondent. therefore liable for negligently leaving behind a piece of rubber in private
respondent Villegas's abdomen and for all the adverse effects thereof.
ISSUES & ARGUMENTS
• W/N petitioner is liable to respondent.
YES, UNDER THE RULE OF RES IPSA LOQUITUR, DR. BATIQUIN IS LIABLE.
• Res ipsa loquitur. The thing speaks for itself. Rebuttable presumption or inference that
defendant was negligent, which arises upon proof that the instrumentality causing
injury was in defendant's exclusive control, and that the accident was one which
ordinary does not happen in absence of negligence. Res ipsa loquitur is a rule of
evidence whereby negligence of the alleged wrongdoer may be inferred from the
mere fact that the accident happened provided the character of the accident and
circumstances attending it lead reasonably to belief that in the absence of negligence
it would not have occurred and that thing which caused injury is shown to have
been under the management and control of the alleged wrongdoer. Under this
doctrine the happening of an injury permits an inference of negligence where
plaintiff produces substantial evidence that the injury was caused by an agency or
instrumentality under the exclusive control and management of defendant, and that
the occurrence was such that in the ordinary course of things would not happen if
reasonable care had been used.
• The doctrine of res ipsa loquitur as a rule of evidence is peculiar to the law of
negligence which recognizes that prima facie negligence may be established without
direct proof and furnishes a substitute for specific proof of negligence. The doctrine
is not a rule of substantive law, but merely a mode of proof or a mere procedural
convenience. The rule, when applicable to the facts and circumstances of a
particular case, is not intended to and does not dispense with the requirement of
proof of culpable negligence on the party charged. It merely determines and
regulates what shall be prima facie evidence thereof and facilitates the burden of
plaintiff of proving a breach of the duty of due care. The doctrine can be invoked
JOHN FADRIGO
Page 73 of 528
70 Reyes v Sisters of Mercy Hospital due to deficient oxygenation of the blood. At around 2:00 a.m., Jorge died. He was forty
G.R. 130547 October 3, 2000 years old. The cause of his death was “Ventricular Arrythemia Secondary to
Hyperpyrexia and typhoid fever.”
FACTS
ISSUE & ARGUMENTS
Petitioner Leah Alesna Reyes is the wife of the late Jorge Reyes. The other petitioners,
namely, Rose Nahdja, Johnny, Lloyd, and Kristine, all surnamed Reyes, were their Whether or not petitioner is entitled to damage applying res ipsa loquitur?
children. Five days before his death on January 8, 1987, Jorge had been suffering from a
recurring fever with chills. After he failed to get relief from some home medication he HOLDING & RATION DECIDENDI
was taking, which consisted of analgesic, antipyretic, and antibiotics, he decided to see
the doctor. No. There is a case when expert testimony may be dispensed with, and that is under the
doctrine of res ipsa loquitur. Thus, courts of other jurisdictions have applied the doctrine
On January 8, 1987, he was taken to the Mercy Community Clinic by his wife. He was in the following situations: leaving of a foreign object in the body of the patient after an
attended to by respondent Dr. Marlyn Rico, resident physician and admitting physician operation, injuries sustained on a healthy part of the body which was not under, or in the
on duty, who gave Jorge a physical examination and took his medical history. She noted area, of treatment, removal of the wrong part of the body when another part was
that at the time of his admission, Jorge was conscious, ambulatory, oriented, coherent, intended, knocking out a tooth while a patient’s jaw was under anesthetic for the removal
and with respiratory distress. Typhoid fever was then prevalent in the locality, as the of his tonsils, and loss of an eye while the patient was under the influence of anesthetic,
clinic had been getting from 15 to 20 cases of typhoid per month Suspecting that Jorge during or following an operation for appendicitis, among others.
could be suffering from this disease, Dr. Rico ordered a Widal Test, a standard test for
typhoid fever, to be performed on Jorge. Blood count, routine urinalysis, stool Petitioners now contend that all requisites for the application of res ipsa
examination, and malarial smear were also made After about an hour, the medical loquitur were present, namely: (1) the accident was of a kind which does not ordinarily
technician submitted the results of the test from which Dr. Rico concluded that Jorge occur unless someone is negligent; (2) the instrumentality or agency which caused the
was positive for typhoid fever. As her shift was only up to 5:00 p.m., Dr. Rico indorsed injury was under the exclusive control of the person in charge; and (3) the injury suffered
Jorge to respondent Dr. Marvie Blanes. must not have been due to any voluntary action or contribution of the person injured.
The contention is without merit. We agree with the ruling of the Court of Appeals. In
Dr. Marvie Blanes attended to Jorge at around six in the evening. She also took Jorge’s the Ramos case, the question was whether a surgeon, an anesthesiologist, and a hospital
history and gave him a physical examination. Like Dr. Rico, her impression was that should be made liable for the comatose condition of a patient scheduled for
Jorge had typhoid fever. Antibiotics being the accepted treatment for typhoid fever, she cholecystectomy. In that case, the patient was given anesthesia prior to her operation.
ordered that a compatibility test with the antibiotic chloromycetin be done on Jorge. Said Noting that the patient was neurologically sound at the time of her operation, the Court
test was administered by nurse Josephine Pagente who also gave the patient a dose of applied the doctrine of res ipsa loquitur as mental brain damage does not normally occur
triglobe. As she did not observe any adverse reaction by the patient to chloromycetin, in a gallblader operation in the absence of negligence of the anesthesiologist. Taking
Dr. Blanes ordered the first five hundred milligrams of said antibiotic to be administered judicial notice that anesthesia procedures had become so common that even an ordinary
on Jorge at around 9:00 p.m. A second dose was administered on Jorge about three person could tell if it was administered properly, we allowed the testimony of a witness
hours later just before midnight. who was not an expert. In this case, while it is true that the patient died just a few hours
after professional medical assistance was rendered, there is really nothing unusual or
At around 1:00 a.m. of January 9, 1987, Dr. Blanes was called as Jorge’s temperature rose extraordinary about his death. Prior to his admission, the patient already had recurring
to 41°C. The patient also experienced chills and exhibited respiratory distress, nausea, fevers and chills for five days unrelieved by the analgesic, antipyretic, and antibiotics
vomiting, and convulsions. Dr. Blanes put him under oxygen, used a suction machine, given him by his wife. This shows that he had been suffering from a serious illness and
and administered hydrocortisone, temporarily easing the patient’s convulsions. When he professional medical help came too late for him.
regained consciousness, the patient was asked by Dr. Blanes whether he had a previous Respondents alleged failure to observe due care was not immediately apparent to a
heart ailment or had suffered from chest pains in the past. Jorge replied he did not After layman so as to justify application of res ipsa loquitur. The question required expert
about 15 minutes, however, Jorge again started to vomit, showed restlessness, and his opinion on the alleged breach by respondents of the standard of care required by the
convulsions returned. Dr. Blanes re-applied the emergency measures taken before and, in circumstances. Furthermore, on the issue of the correctness of her diagnosis, no
addition, valium was administered. Jorge, however, did not respond to the treatment and presumption of negligence can be applied to Dr. Marlyn Rico.
slipped into cyanosis, a bluish or purplish discoloration of the skin or mucous membrane J.C. LERIT
Page 74 of 528
71 Ramos v CA | Kapunan liability. Instead, it is considered as merely evidentiary or in the nature of a
G.R. No. 124354 December 29, 1999| procedural rule. It is regarded as a mode of proof, or a mere procedural of
convenience since it furnishes a substitute for, and relieves a plaintiff of, the burden
FACTS of producing specific proof of negligence. Hence, mere invocation and application
• Erlinda Ramos underwent an operation known as cholecystectomy (removal of of the doctrine does not dispense with the requirement of proof of negligence. It is
stone in her gallbladder) under the hands of Dr. Orlino Hosaka. He was simply a step in the process of such proof, permitting the plaintiff to present along
accompanied by Dr. Perfecta Gutierrez, an anesthesiologist which Dr. Hosaka with the proof of the accident, enough of the attending circumstances to invoke the
recommended since Ramos (and her husband Rogelio) did not know any. doctrine, creating an inference or presumption of negligence, and to thereby place
• The operation was schedule at 9am of June 17, 1985 but was however delayed for on the defendant the burden of going forward with the proof. Still, before resort to
three hours due to the late arrival of Dr. Hosaka. the doctrine may be allowed, the following requisites must be satisfactorily shown:
• Dr. Gutierrez subsequently started trying to intubate her. And at around 3pm, 1. The accident is of a kind which ordinarily does not occur in the absence of
Erlinda was seen being wheeled to the Intensive Care Unit (ICU). The doctors someone's negligence;
explained to petitioner Rogelio that his wife had bronchospasm. Erlinda stayed in 2. It is caused by an instrumentality within the exclusive control of the
the ICU for a month. She was released from the hospital only four months later or defendant or defendants; and
on November 15, 1985. Since the ill-fated operation, Erlinda remained in comatose 3. The possibility of contributing conduct which would make the plaintiff
condition until she died on August 3, 1999. responsible is eliminated.
• RTC ruled in favor of the petitioners, holding the defendants guilty of, at the very • Although generally, expert medical testimony is relied upon in malpractice
least, negligence in the performance of their duty to plaintiff-patient Erlinda Ramos. suits to prove that a physician has done a negligent act or that he has
• On appeal to CA, the said decision was reversed – dismissing the complaint against deviated from the standard medical procedure, when the doctrine of res ipsa
the defendants. Hence this petition. loquitur is availed by the plaintiff, the need for expert medical testimony is
dispensed with because the injury itself provides the proof of negligence. The
reason is that the general rule on the necessity of expert testimony applies
ISSUES & ARGUMENTS only to such matters clearly within the domain of medical science, and not to
matters that are within the common knowledge of mankind which may be
W/N the private respondents should be held liable for the injury caused to testified to by anyone familiar with the facts. When the doctrine is appropriate,
Erlinda and her family? all that the patient must do is prove a nexus between the particular act or omission
complained of and the injury sustained while under the custody and management of
the defendant without need to produce expert medical testimony to establish the
HOLDING & RATIO DECIDENDI standard of care. Resort to res ipsa loquitur is allowed because there is no other way,
under usual and ordinary conditions, by which the patient can obtain redress for
YES. injury suffered by him.
• We find the doctrine of res ipsa loquitur appropriate in the case at bar. As will
• Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction hereinafter be explained, the damage sustained by Erlinda in her brain prior
speaks for itself." The phrase "res ipsa loquitur'' is a maxim for the rule that the fact to a scheduled gall bladder operation presents a case for the application of
of the occurrence of an injury, taken with the surrounding circumstances, may res ipsa loquitur.
permit an inference or raise a presumption of negligence, or make out a plaintiff's • In the present case, Erlinda submitted herself for cholecystectomy and expected a
prima facie case, and present a question of fact for defendant to meet with an routine general surgery to be performed on her gall bladder. On that fateful day she
explanation. delivered her person over to the care, custody and control of private respondents
• The doctrine of res ipsa loquitur is simply a recognition of the postulate that, as a who exercised complete and exclusive control over her. At the time of submission,
matter of common knowledge and experience, the very nature of certain types of Erlinda was neurologically sound and, except for a few minor discomforts, was
occurrences may justify an inference of negligence on the part of the person who likewise physically fit in mind and body. However, during the administration of
controls the instrumentality causing the injury in the absence of some explanation by anesthesia and prior to the performance of cholecystectomy she suffered irreparable
the defendant who is charged with negligence. damage to her brain. Thus, without undergoing surgery, she went out of the
• However, much has been said that res ipsa loquitur is not a rule of substantive law operating room already decerebrate and totally incapacitated. Obviously, brain
and, as such, does not create or constitute an independent or separate ground of damage, which Erlinda sustained, is an injury which does not normally occur in the
Page 75 of 528
process of a gall bladder operation. In fact, this kind of situation does not in the scheduled another procedure in a different hospital at the same time as
absence of negligence of someone in the administration of anesthesia and in the use Erlinda's cholecystectomy, and was in fact over three hours late for the
of endotracheal tube. Normally, a person being put under anesthesia is not rendered latter's operation. Because of this, he had little or no time to confer with his
decerebrate as a consequence of administering such anesthesia if the proper anesthesiologist regarding the anesthesia delivery. This indicates that he was
procedure was followed. Furthermore, the instruments used in the administration of remiss in his professional duties towards his patient. Thus, he shares equal
anesthesia, including the endotracheal tube, were all under the exclusive control of responsibility for the events which resulted in Erlinda's condition.
private respondents, who are the physicians-in-charge. Likewise, petitioner Erlinda • Notwithstanding the general denial made by respondent hospital to the effect that
could not have been guilty of contributory negligence because she was under the the respondent doctors (referred to as “consultants”) in this case are not their
influence of anesthetics which rendered her unconscious. employees, there is a showing that the hospital exercises significant control in the
• We disagree with the findings of the Court of Appeals. We hold that private hiring and firing of consultants and in the conduct of their work within the hospital
respondents were unable to disprove the presumption of negligence on their premises.
part in the care of Erlinda and their negligence was the proximate cause of • The basis for holding an employer solidarily responsible for the negligence of its
her piteous condition. employee is found in Article 2180 of the Civil Code which considers a person
• Dr. Gutierrez (anesthesiologist) is held liable for failure to perform the accountable not only for his own acts but also for those of others based on the
necessary pre-operative evaluation which includes taking the patient's former's responsibility under a relationship of patria potestas. Such responsibility
medical history, review of current drug therapy, physical examination and ceases when the persons or entity concerned prove that they have observed
interpretation of laboratory data. This physical examination performed by the the diligence of a good father of the family to prevent damage. In other words,
anesthesiologist is directed primarily toward the central nervous system, while the burden of proving negligence rests on the plaintiffs, once negligence is
cardiovascular system, lungs and upper airway. A thorough analysis of the shown, the burden shifts to the respondents (parent, guardian, teacher or employer)
patient's airway normally involves investigating the following: cervical spine who should prove that they observed the diligence of a good father of a family to
mobility, temporomandibular mobility, prominent central incisors, diseased prevent damage.
or artificial teeth, ability to visualize uvula and the thyromental distance. • In the instant case, respondent hospital, apart from a general denial of its
• In the case at bar, respondent Dra. Gutierrez admitted that she saw Erlinda for the responsibility over respondent physicians, failed to adduce evidence showing
first time on the day of the operation itself, on 17 June 1985. Before this date, no that it exercised the diligence of a good father of a family in the hiring and
prior consultations with, or pre-operative evaluation of Erlinda was done by her. supervision of the latter. It failed to adduce evidence with regard to the degree of
Until the day of the operation, respondent Dra. Gutierrez was unaware of the supervision which it exercised over its physicians. In neglecting to offer such proof,
physiological make-up and needs of Erlinda. She was likewise not properly informed or proof of a similar nature, respondent hospital thereby failed to discharge its
of the possible difficulties she would face during the administration of anesthesia to burden under the last paragraph of Article 2180. Having failed to do this,
Erlinda. Respondent Dra. Gutierrez' act of seeing her patient for the first time only respondent hospital is consequently solidarily responsible with its physicians
an hour before the scheduled operative procedure was, therefore, an act of for Erlinda's condition.
exceptional negligence and professional irresponsibility. The measures cautioning
prudence and vigilance in dealing with human lives lie at the core of the physician's The CA decision and resolution are hereby modified so as to award in favor of
centuries-old Hippocratic Oath. Her failure to follow this medical procedure is, petitioners, and solidarily against private respondents the following: 1)
therefore, a clear indicia of her negligence. P1,352,000.00 as actual damages computed as of the date of promulgation of this
• Having failed to observe common medical standards in pre-operative management decision plus a monthly payment of P8,000.00 up to the time that petitioner
and intubation, respondent Dra. Gutierrez' negligence resulted in cerebral anoxia Erlinda Ramos expires or miraculously survives; 2) P2,000,000.00 as moral
and eventual coma of Erlinda. damages, 3) P1,500,000.00 as temperate damages; 4) P100,000.00 each as
• Dr. Hosaka, being the head of the surgical team (“captain of the ship”), it exemplary damages and attorney's fees; and, 5) the costs of the suit.
was his responsibility to see to it that those under him perform their task in
the proper manner. Respondent Dr. Hosaka's negligence can be found in his
failure to exercise the proper authority (as the "captain" of the operative
team) in not determining if his anesthesiologist observed proper anesthesia
protocols. In fact, no evidence on record exists to show that respondent Dr.
Hosaka verified if respondent Dra. Gutierrez properly intubated the patient.
Furthermore, it does not escape us that respondent Dr. Hosaka had TEL VIRTUDEZ
Page 76 of 528
72 Ramos v CA | Kapunan anxiety mainly because he will not be in control of his body there could be adverse
G.R. No. 124354 April 11, 2002| 380 SCRA 467 results to surgery and he will be opened up; a knife is going to open up his body.
(Dr. Camagay)
FACTS •
• Erlinda Ramos underwent an operation known as cholecystectomy (removal of
stone in her gallbladder) under the hands of Dr. Orlino Hosaka. He was On the part of Dr. Hosaka, while his professional services were secured primarily
accompanied by Dr. Perfecta Gutierrez, an anesthesiologist which Dr. Hosaka for their performance of acts within their respective fields of expertise for the
recommended since Ramos (and her husband Rogelio) did not know any. treatment of petitioner Erlinda, and that one does not exercise control over the
• The operation was schedule at 9am of June 17, 1985 but was however delayed for other, they were certainly not completely independent of each other so as to
three hours due to the late arrival of Dr. Hosaka. absolve one from the negligent acts of the other physician.
• Dr. Gutierrez subsequently started trying to intubate her. And at around 3pm,
Erlinda was seen being wheeled to the Intensive Care Unit (ICU). The doctors • First, it was Dr. Hosaka who recommended to petitioners the services of Dr.
explained to petitioner Rogelio that his wife had bronchospasm. Erlinda stayed in Gutierrez. In effect, he represented to petitioners that Dr. Gutierrez possessed the
the ICU for a month. She was released from the hospital only four months later or necessary competence and skills. Drs. Hosaka and Gutierrez had worked together
on November 15, 1985. Since the ill-fated operation, Erlinda remained in comatose since 1977. Whenever Dr. Hosaka performed a surgery, he would always engage the
condition until she died on August 3, 1999. services of Dr. Gutierrez to administer the anesthesia on his patient.
• Petitioners filed with the RTC a civil case for damages; the present petition is the 2nd Second, Dr. Hosaka himself admitted that he was the attending physician of Erlinda.
MR of the private respondents in the SC, the main decision was rendered in Thus, when Erlinda showed signs of cyanosis, it was Dr. Hosaka who gave
December 29, ‘00. instructions to call for another anesthesiologist and cardiologist to help resuscitate
Erlinda.
Third, it is conceded that in performing their responsibilities to the patient, Drs.
ISSUES & ARGUMENTS Hosaka and Gutierrez worked as a team. Their work cannot be placed in separate
• W/N the private respondents should be held liable for the injury caused to watertight compartments because their duties intersect with each other.
Erlinda and her family?
It is equally important to point out that Dr. Hosaka was remiss in his duty of
attending to petitioner Erlinda promptly, for he arrived more than three (3) hours
HOLDING & RATIO DECIDENDI late for the scheduled operation. The cholecystectomy was set for June 17, 1985 at
9:00 a.m., but he arrived at DLSMC only at around 12:10 p.m. In reckless disregard
YES. On the part of Dr. Gutierrez, her failure to exercise the standards of care in for his patient’s well being, Dr. Hosaka scheduled two procedures on the same day,
the administration of anesthesia on a patient through the non-performance of the just thirty minutes apart from each other, at different hospitals. Thus, when the first
preanesthetic/preoperative evaluation prior to an operation. The injury incurred procedure (protoscopy) at the Sta. Teresita Hospital did not proceed on time,
by petitioner Erlinda does not normally happen absent any negligence in the Erlinda was kept in a state of uncertainty at the DLSMC.
administration of anesthesia and in the use of an endotracheal tube. As was noted
in our Decision, the instruments used in the administration of anesthesia, On the part of the hospital (DLSMC), since there was NO employer-employee
including the endotracheal tube, were all under the exclusive control of private relationship between the hospital and Dr. Gutierrez and Dr. Hosaka established
respondents Dr. Gutierrez and Dr. Hosaka. Thus the doctrine of res ipsa loquitor in this case, the hospital cannot be held liable under Art. 2180 of the Civil Code.
can be applied in this case. The contract of the hospital with its consultants is separate and distinct from the
contract with its patients.
• Such procedure was needed for 3 reasons: (1) to alleviate anxiety; (2) to dry up the
secretions and; (3) to relieve pain. Now, it is very important to alleviate anxiety
because anxiety is associated with the outpouring of certain substances formed in
the body called adrenalin. When a patient is anxious there is an outpouring of
adrenalin which would have adverse effect on the patient. One of it is high blood
pressure, the other is that he opens himself to disturbances in the heart rhythm,
which would have adverse implications. So, we would like to alleviate patient’s TEL VIRTUDEZ
Page 77 of 528
73 DMCI Vs. Court of Appeals| Kapunan in one jurisdiction, that the thing or instrumentality speaks for itself, the facts or
G.R. No. 137873 April 20, 2001| G.R. No. 137873 circumstances accompanying an injury may be such as to raise a presumption, or at
least permit an inference of negligence on the part of the defendant, or some other
FACTS person who is charged with negligence.
• At around 1:30 p.m., November 2, 1990, Jose Juego, a construction worker of D. M. • x x x where it is shown that the thing or instrumentality which caused the injury
Consunji, Inc., fell 14 floors from the Renaissance Tower, Pasig City to his death. complained of was under the control or management of the defendant, and that the
• He was rushed to a hospital but was pronounced DOA at around 2:15 p.m. of the occurrence resulting in the injury was such as in the ordinary course of things would
same date. not happen if those who had its control or management used proper care, there is
• Investigation disclosed that at the given time, date and place, while victim Jose A. sufficient evidence, or, as sometimes stated, reasonable evidence, in the absence of
Juego together with Jessie Jaluag and Delso Destajo [were] performing their work as explanation by the defendant, that the injury arose from or was caused by the
carpenter[s] at the elevator core of the 14th floor of the Tower D, Renaissance defendant’s want of care.21
Tower Building on board a platform made of channel beam (steel) measuring 4.8 • One of the theoretical based for the doctrine is its necessity, i.e., that necessary
meters by 2 meters wide with pinulid plywood flooring and cable wires attached to evidence is absent or not available.
its four corners and hooked at the 5 ton chain block, when suddenly, the bolt or pin • The res ipsa loquitur doctrine is based in part upon the theory that the defendant in
which was merely inserted to connect the chain block with the platform, got loose charge of the instrumentality which causes the injury either knows the cause of the
xxx causing the whole platform assembly and the victim to fall down to the accident or has the best opportunity of ascertaining it and that the plaintiff has no
basement of the elevator core, Tower D of the building under construction thereby such knowledge, and therefore is compelled to allege negligence in general terms
crushing the victim of death, save his two (2) companions who luckily jumped out and to rely upon the proof of the happening of the accident in order to establish
for safety. negligence. The inference which the doctrine permits is grounded upon the fact that
• It is thus manifest that Jose A. Juego was crushed to death when the platform he the chief evidence of the true cause, whether culpable or innocent, is practically
was then on board and performing work, fell. And the falling of the platform was accessible to the defendant but inaccessible to the injured person.
due to the removal or getting loose of the pin which was merely inserted to • It has been said that the doctrine of res ipsa loquitur furnishes a bridge by which a
the connecting points of the chain block and platform but without a safety plaintiff, without knowledge of the cause, reaches over to defendant who knows or
lock. should know the cause, for any explanation of care exercised by the defendant in
• Jose Juego’s widow, Maria, filed in the Regional Trial Court (RTC) of Pasig a respect of the matter of which the plaintiff complains. The res ipsa loquitur
complaint for damages against the deceased’s employer, D.M. Consunji, Inc. doctrine, another court has said, is a rule of necessity, in that it proceeds on the
theory that under the peculiar circumstances in which the doctrine is applicable, it is
ISSUES & ARGUMENTS within the power of the defendant to show that there was no negligence on his part,
and direct proof of defendant’s negligence is beyond plaintiff’s power. Accordingly,
W/N petitioner should be held liable; should res ipsa loquitur be applied in this some court add to the three prerequisites for the application of the res ipsa loquitur
case doctrine the further requirement that for the res ipsa loquitur doctrine to apply, it
must appear that the injured party had no knowledge or means of knowledge as to
HOLDING & RATIO DECIDENDI the cause of the accident, or that the party to be charged with negligence has
superior knowledge or opportunity for explanation of the accident.23
• The CA held that all the requisites of res ipsa loquitur are present in the case at bar:
YES, petitioner is liable under res ipsa loquitur.
• There is no dispute that appellee’s husband fell down from the 14th floor of a
• The effect of the doctrine is to warrant a presumption or inference that the mere fall
building to the basement while he was working with appellant’s construction
of the elevator was a result of the person having charge of the instrumentality was
project, resulting to his death. The construction site is within the exclusive control
negligent. As a rule of evidence, the doctrine of res ipsa loquitur is peculiar to the law
and management of appellant. It has a safety engineer, a project superintendent, a
of negligence which recognizes that prima facie negligence may be established without
carpenter leadman and others who are in complete control of the situation therein.
direct proof and furnishes a substitute for specific proof of negligence.
The circumstances of any accident that would occur therein are peculiarly within the
• The concept of res ipsa loquitur has been explained in this wise:
knowledge of the appellant or its employees. On the other hand, the appellee is not
• While negligence is not ordinarily inferred or presumed, and while the mere
in a position to know what caused the accident. Res ipsa loquitur is a rule of necessity
happening of an accident or injury will not generally give rise to an inference or
and it applies where evidence is absent or not readily available, provided the
presumption that it was due to negligence on defendant’s part, under the doctrine of
following requisites are present: (1) the accident was of a kind which does not
res ipsa loquitur, which means, literally, the thing or transaction speaks for itself, or
Page 78 of 528
ordinarily occur unless someone is negligent; (2) the instrumentality or agency which
caused the injury was under the exclusive control of the person charged with
negligence; and (3) the injury suffered must not have been due to any voluntary
action or contribution on the part of the person injured. x x x.
• No worker is going to fall from the 14th floor of a building to the basement while
performing work in a construction site unless someone is negligent[;] thus, the first
requisite for the application of the rule of res ipsa loquitur is present. As explained
earlier, the construction site with all its paraphernalia and human resources that
likely caused the injury is under the exclusive control and management of
appellant[;] thus[,] the second requisite is also present. No contributory negligence
was attributed to the appellee’s deceased husband[;] thus[,] the last requisite is also
present. All the requisites for the application of the rule of res ipsa loquitur are
present, thus a reasonable presumption or inference of appellant’s negligence arises.
x x x.24
• Petitioner does not dispute the existence of the requisites for the application of res
ipsa loquitur, but argues that the presumption or inference that it was negligent did
not arise since it "proved that it exercised due care to avoid the accident which befell
respondent’s husband."
• Petitioner apparently misapprehends the procedural effect of the doctrine. As stated
earlier, the defendant’s negligence is presumed or inferred25 when the plaintiff
establishes the requisites for the application of res ipsa loquitur. Once the plaintiff
makes out a prima facie case of all the elements, the burden then shifts to defendant
to explain.26 The presumption or inference may be rebutted or overcome by other
evidence and, under appropriate circumstances disputable presumption, such as that
of due care or innocence, may outweigh the inference.27 It is not for the defendant
to explain or prove its defense to prevent the presumption or inference from arising.
Evidence by the defendant of say, due care, comes into play only after the
circumstances for the application of the doctrine has been established.
FRANK TAMARGO
Page 79 of 528
74 Perla Compania Inc v. Sps. Sarangaya | Corona, J. in the car’s rear compartment. For its part, Perla Compania refused liability for the
G.R. No. 147746 October 25, 2005| accident on the ground that it exercised due diligence of a good father of a family in
the selection and supervision of Pascual as its branch manager.
FACTS
• In 1986, spouses Sarangaya erected a building known as “Super A Building” and ISSUES & ARGUMENTS
was subdivided into three doors, each of which was leased out. The two-storey • W/N Pascual liable under res ipsa loquitur doctrine
residence of the Sarangayas was behind the second and third doors of the building. o <Pascual> It was a fortuitous event
• In 1988, petitioner Perla Compania de Seguros, Inc., through its branch manager
and co-petitioner Bienvenido Pascual, entered into a contract of lease of the first • W/N Perla Compania liable under tort
door of the “Super A Building,” abutting the office of Matsushita. o <Perla Compania> We exercised due diligence in selecting Pascual
• Perla Compania renovated its rented space and divided it into two. The left side was
converted into an office while the right was used by Pascual as a garage for a 1981 HOLDING & RATIO DECIDENDI
model 4-door Ford Cortina, a company-provided vehicle he used in covering the YES, Pascual liable under res ipsa loquitur doctrine
different towns within his area of supervision. • Res ipsa loquitur is a Latin phrase which literally means “the thing or the
• On July 7, 1988, Pascual left for San Fernando, Pampanga but did not bring the car transaction speaks for itself.” It relates to the fact of an injury that sets out an
with him. Three days later, he returned, and decided to “warm up” the car. When he inference to the cause thereof or establishes the plaintiff’s prima facie case. The
pulled up the handbrake and switched on the ignition key, the engine made an doctrine rests on inference and not on presumption. The facts of the
“odd” sound and did not start. Thinking it was just the gasoline percolating into the occurrence warrant the supposition of negligence and they furnish
engine, he again stepped on the accelerator and started the car. This revved the circumstantial evidence of negligence when direct evidence is lacking.
engine but petitioner again heard an unusual sound. He then saw a small flame • The doctrine is based on the theory that the defendant either knows the cause
coming out of the engine. Startled, he turned it off, alighted from the vehicle and of the accident or has the best opportunity of ascertaining it and the plaintiff,
started to push it out of the garage when suddenly, fire spewed out of its rear having no knowledge thereof, is compelled to allege negligence in general
compartment and engulfed the whole garage. Pascual was trapped inside and terms. In such instance, the plaintiff relies on proof of the happening of the
suffered burns on his face, legs and arms. accident alone to establish negligence.
• Meanwhile, respondents were busy watching television when they heard two loud • The doctrine provides a means by which a plaintiff can pin liability on a
explosions. The smell of gasoline permeated the air and, in no time, fire spread defendant who, if innocent, should be able to explain the care he exercised to
inside their house, destroying all their belongings, furniture and appliances. prevent the incident complained of. Thus, it is the defendant’s responsibility to
• The city fire marshall conducted an investigation and thereafter submitted a report show that there was no negligence on his part.
to the provincial fire marshall. He concluded that the fire was “accidental.” The • To sustain the allegation of negligence based on the doctrine of res ipsa
report also disclosed that petitioner-corporation had no fire permit as required by loquitur, the following requisites must concur:
law. 1) the accident is of a kind which does not ordinarily occur unless
• Based on the same report, a criminal complaint for “Reckless Imprudence Resulting someone is negligent;
to (sic) Damage in (sic) Property” was filed against petitioner Pascual. On the other 2) the cause of the injury was under the exclusive control of the
hand, Perla Compania was asked to pay the amount of P7,992,350, inclusive of the person in charge and
value of the commercial building. At the prosecutor’s office, petitioner Pascual 3) the injury suffered must not have been due to any voluntary action
moved for the withdrawal of the complaint, which was granted. or contribution on the part of the person injured.
• Respondents (spouses Sarangaya) later on filed a civil complaint based on quasi-
delict against petitioners for a “sum of money and damages,” alleging that Pascual • Under the first requisite, the occurrence must be one that does not ordinarily
acted with gross negligence while petitioner-corporation lacked the required occur unless there is negligence. “Ordinary” refers to the usual course of
diligence in the selection and supervision of Pascual as its employee. events. Flames spewing out of a car engine, when it is switched on, is obviously
• During the trial, respondents presented witnesses who testified that a few days not a normal event. Neither does an explosion usually occur when a car engine
before the incident, Pascual was seen buying gasoline in a container from a nearby is revved. Hence, in this case, without any direct evidence as to the cause of the
gas station. He then placed the container in the rear compartment of the car. accident, the doctrine of res ipsa loquitur comes into play and, from it, we draw
• In his answer, Pascual insisted that the fire was purely an accident, a caso fortuito, the inference that based on the evidence at hand, someone was in fact negligent
hence, he was not liable for damages. He also denied putting a container of gasoline and responsible for the accident.
Page 80 of 528
• The test to determine the existence of negligence in a particular case may be • Under the third requisite, there is nothing in the records to show that
stated as follows: did the defendant in committing the alleged negligent act, use respondents contributed to the incident. They had no access to the car and had
reasonable care and caution which an ordinarily prudent person in the same no responsibility regarding its maintenance even if it was parked in a building
situation would have employed? If not, then he is guilty of negligence. they owned.
• Here, the fact that Pascual, as the caretaker of the car, failed to submit any
proof that he had it periodically checked (as its year-model and condition YES, COMPANIA LIABLE UNDER TORT
required) revealed his negligence. A prudent man should have known that • In the selection of prospective employees, employers are required to examine
a 14-year-old car, constantly used in provincial trips, was definitely prone to them as to their qualifications, experience and service records.[25] While the
damage and other defects. For failing to prove care and diligence in the petitioner-corporation does not appear to have erred in considering Pascual for
maintenance of the vehicle, the necessary inference was that Pascual had been his position, its lack of supervision over him made it jointly and solidarily liable
negligent in the upkeep of the car. for the fire.
• The exempting circumstance of caso fortuito may be availed only when: (a) the • In the supervision of employees, the employer must formulate standard
cause of the unforeseen and unexpected occurrence was independent of the operating procedures, monitor their implementation and impose disciplinary
human will; (b) it was impossible to foresee the event which constituted the measures for the breach thereof. o fend off vicarious liability, employers must
caso fortuito or, if it could be foreseen, it was impossible to avoid; (c) the submit concrete proof, including documentary evidence, that they complied
occurrence must be such as to render it impossible to perform an obligation in with everything that was incumbent on them.
a normal manner and (d) the person tasked to perform the obligation must not
have participated in any course of conduct that aggravated the accident.[20] • Here, petitioner-corporation’s evidence hardly included any rule or regulation
that Pascual should have observed in performing his functions. It also did not
• In fine, human agency must be entirely excluded as the proximate cause or have any guidelines for the maintenance and upkeep of company property like
contributory cause of the injury or loss. In a vehicular accident, for example, a the vehicle that caught fire. Petitioner-corporation did not require periodic
mechanical defect will not release the defendant from liability if it is shown that reports on or inventories of its properties either. Based on these circumstances,
the accident could have been prevented had he properly maintained and taken petitioner-corporation clearly did not exert effort to be apprised of the
good care of the vehicle. condition of Pascual’s car or its serviceability.
• The circumstances on record do not support the defense of Pascual. Clearly,

there was no caso fortuito because of his want of care and prudence in
maintaining the car.
• Under the second requisite, the instrumentality or agency that triggered the NOTE: Sensya na mahaba. Pero importante kasi yung mga requisites eh.
occurrence must be one that falls under the exclusive control of the person in
charge thereof. In this case, the car where the fire originated was under the
control of Pascual. Being its caretaker, he alone had the responsibility to
maintain it and ensure its proper functioning. No other person, not even the
respondents, was charged with that obligation except him.
• Where the circumstances which caused the accident are shown to have been
under the management or control of a certain person and, in the normal course
of events, the incident would not have happened had that person used proper
care, the inference is that it occurred because of lack of such care. The burden
of evidence is thus shifted to defendant to establish that he observed all that
was necessary to prevent the accident from happening. In this aspect, Pascual
utterly failed.
FRANK TAMARGO
Page 81 of 528
75 Macalinao v. Ong| Tinga HOLDING & RATIO DECIDENDI
(G.R. No. 1L-40242) (15 December 1982)
The evidence on record coupled with the doctrine of res ipsa loquitur sufficiently
establishes Ongs’ negligence.
FACTS
DOCTRINE:
Macalinao and Ong were employed as utility man and driver, respectively, at the • The photographs of the accident deserve substantial cogitation.
Genetron International Marketing (Genetron), a single proprietorship owned and • Physical evidence is a mute but an eloquent manifestation of truth which ranks
operated by Sebastian. On April 25, 1992, Sebastian instructed Mavalinao, Ong and two high in our hierarchy of trustworthy evidence.
truck helpers to deliver a heavy piece of machinery – a reactor/motor for mixing • In this case, while there is dearth of testimonial evidence to enlighten us about
chemicals, to Sebastian’s manufacturing plant in Angat, Bulacan. While in the process of what actually happened, photographs depicting the relative positions of the
complying with the order, the vehicle driven by Ong, Genetron’s Isuzu Elf Truck with vehicles immediately after the accident took place do exist. It is well established
plate noo. PMP-106 hit and bumped the front portion of private jeepney along that photographs, when duly verified and shown by extrinsic evidence to be
Caypombo, Sta.Maria, Bulacan at around 11:20 in the morning. faithful representations of the subject as of the time in question, are in the
discretion of the trial court, admissible in evidence as aids in arriving at an
Both vehicles incurred severe damages while the passengers sustained physical injuries as understanding of the evidence, the situation or condition of objects or premises
a consequence of the collision. Macalinao incurred the most serious injuries among the or the circumstances of an accident.
passengers of the truck. He was initially brought to the Sta. Maria District Hospital for • Another piece of evidence which supports a finding of negligence against Ong
first aid treatment but in view of the severity of his condition, he was transferred to the is the police report of the incident. The report states that the Isuzu truck was
Philippine Orthopedic Center at the instance of Sebastian. He was again moved to the one which hit the left portion of the private jeepney. It must still be
Capitol Medical Center by his parents, for medical reasons then to PGH for financial remembered that although police blotters are of little probative value, they are
consideration. nevertheless admitted and considered in the absence of competent evidence to
refute the facts stated therein. Entries in police records made by a police officer
Macalinao’s body was paralyzed and immobilized from the neck down as a result of the in the performance of the duty especially enjoined by law are prima facie
accident and per doctor’s advice, his foot was amputated. He also suffered from bed evidence of the facttherein stated, and their probative value may be either
sores and infection. His immedicable condition, coupled with the doctor’s substantiated ornullified by other competent evidence.
recommendation, led his family to bring him home where he died on Nov. 07, 1992. • While not constituting direct proof of Ong’s negligence, the foregoing pieces of
evidence justify the application of res ipsa loquitur,a Latin phrase which literally
Before he died, Macalinao was able to file an action for damages against both Ong and means “ the thing or transaction speaks for itself.”
Sebastian before the RTC of QC. After his death Macalinao was substituted by his o Res ipsa loquitur recognizes that parties may establish prima facie negligence
parents in the action. without direct proof, thus, it allows the principle to substitute for specific proof of
negligence. It permits the plaintiff to present along with proof of the accident, enough
Trial Court: based on the evidence, Ong drove the Isuzu truck in a reckless and of the attending circumstances toinvoke the doctrine, create an inference or
imprudent manner thereby causing the same to hit the private jeepney. It observed that presumption of negligence and thereby place on the defendant the burden of proving
while respondents claimed that Ong was driving cautiously and prudently at the time of that there was no negligence on his part.
the mishap, no evidence was presented to substantiate the claim. • The doctrine can be invoked only when under the circumstances, direct
evidence is absent and not readily available. This is based in part upon the
CA: reversed the findings of trial court. Evidence presented by petitioners is insufficient theory that the defendant in charge of the instrumentality which causes the
to support verdict of negligence against Ong. injury either knows the cause of the accident or has the best opportunity of
ascertaining it while the plaintiff has no knowledge, and is therefore compelled
ISSUES & ARGUMENTS to allege negligence in general terms and rely upon the proof of the happening
of the accident in order to establish negligence
W/N sufficient evidence was presented to support a finding of negligence against • Requisites of application of resipsaloquitur:
Ong 1. The accident is of a kind which ordinarily does not occur in the absence of
someone’s negligence;
Page 82 of 528
2. It is caused by an instrumentality within the exclusive control of the defendant or
defendants; and
3. The possibility of contributing conduct which would make the plaintiff responsible
is eliminated
• The court held that all the above requisites are present in the case at bar. In this
case, Macalinao could no longer testify as to the cause of the accident since he
is dead. Petitioners, while substituting their son as plaintiff, have no actual
knowledge about the event since they were not present at the crucial moment.
The driver of the jeepney who could have shed light on the circumstances is
likewise dead. The only ones left with knowledge about the cause of the mishap
are the two truck helpers who survived, both employees of Sebastian, and Ong,
who is not only Sebastian’s previous employee but his co-respondent in the
case as well.
DIKKI SIAN
Page 83 of 528
76 Joaquinita P. Capili vs. Sps Cardana| Quisumbing
November 2, 2006 The doctrine of res ipsa loquitur applies where (1) the accident was of such character as
to warrant an inference that it would not have happened except for the defendant’s
FACTS negligence; (2) the accident must have been caused by an agency or instrumentality
within the exclusive management or control of the person charged with the negligence
• Jasmin Cardaña was walking along the perimeter fence of the San Roque complained of; and (3) the accident must not have been due to any voluntary action or
Elementary School when a branch of a caimito tree located within the school contribution on the part of the person injured.
premises fell on her, causing her instantaneous death.
While negligence is not ordinarily inferred or presumed, and while the mere happening
• Her parents filed a case for damages against petitioner Capili, alleging that a of an accident or injury will not generally give rise to an inference or presumption that it
certain Lerios reported on the possible danger the tree posed. The Cardañas was due to negligence on defendant’s part, under the doctrine of res ipsa loquitur, which
averred that petitioner’s gross negligence and lack of foresight caused the death means, literally, the thing or transaction speaks for itself, or in one jurisdiction, that the
of their daughter. thing or instrumentality speaks for itself, the facts or circumstances accompanying an
injury may be such as to raise a presumption, or at least permit an inference of negligence
• RTC dismissed the complaint for failure of respondent parents to establish on the part of the defendant, or some other person who is charged with negligence.
negligence on part of petitioner, BUT the CA reversed, reasoning that
petitioner should have known of the condition of the tree by its mere sighting The procedural effect of the doctrine of res ipsa loquitur is that petitioner’s negligence is
and that no matter how hectic her schedule was, she should have had the tree presumed once respondents established the requisites for the doctrine to apply. Once
removed and not merely delegated the task to Palaña. respondents made out a prima facie case of all requisites, the burden shifts to petitioner
to explain. The presumption or inference may be rebutted or overcome by other
• The appellate court ruled that the dead caimito tree was a nuisance that should evidence and, under appropriate circumstances a disputable presumption, such as that of
have been removed soon after petitioner had chanced upon it. Hence, this due care or innocence, may outweigh the inference.
petition for review.
As the school principal, petitioner was tasked to see to the maintenance of the school
ISSUES & ARGUMENTS grounds and safety of the children within the school and its premises. That she was
• Whether or not petitioner is negligent and liable for the death of Cardaña? unaware of the rotten state of the tree calls for an explanation on her part as to why she
failed to be vigilant. As school principal, petitioner is expected to oversee the safety of
HOLDING & RATIO DECIDENDI the school’s premises. The fact that she failed to see the immediate danger posed by the
dead and rotting tree shows she failed to exercise the responsibility demanded by her
Petitioner is liable. position.
A negligent act is one from which an ordinary prudent person in the actor’s position, in Petition denied.
the same or similar circumstances, would foresee such an appreciable risk of harm to
others as to cause him not to do the act or to do it in a more careful manner. The
probability that the branches of a dead and rotting tree could fall and harm someone is
clearly a danger that is foreseeable.
As the school principal, petitioner was tasked to see to the maintenance of the school
grounds and safety of the children within the school and its premises. That she was
unaware of the rotten state of a tree whose falling branch had caused the death of a child
speaks ill of her discharge of the responsibility of her position.
The fact, however, that respondents’ daughter, Jasmin, died as a result of the dead and
rotting tree within the school’s premises shows that the tree was indeed an obvious
danger to anyone passing by and calls for application of the principle of res ipsa loquitur. JR RUIZ
Page 84 of 528
77 Cantre v. Spouses Go | Quisumbing 2. It is caused by an instrumentality within the exclusive control of the defendant
G.R. No. 160889, April 27, 2007| or defendants; and
3. The possibility of contributing conduct which would make the plaintiff
FACTS responsible is eliminated.18
• Dr. Cantre is the gynecologist and attending physician of Nora Go.
• Go gave birth to her fourth child (boy) but with some complications. She suffered • As to the first requirement, the gaping wound on Nora’s arm is certainly not an
profuse bleeding inside her womb because the some parts of the placenta remained ordinary occurrence in the act of delivering a baby, far removed as the arm is from
in her womb after delivery. Specifically, she suffered hypovolemic shock, causing a the organs involved in the process of giving birth. Such injury could not have
drop in her blood pressure. happened unless negligence had set in somewhere.
• Dr. Cantre massaged Go’s uterus to for it to contract and stop the bleeding. She • Second, whether the injury was caused by the droplight or by the blood pressure
also ordered a droplight to warm Go and her baby. cuff is of no moment. Both instruments are deemed within the exclusive control of
• However, Husband Go noticed a fresh gaping wound 2.5 by 3.5 inches in her arm the physician in charge under the "captain of the ship" doctrine. This doctrine holds
close to the armpit. The nurses told Husband Go that this wound was a burn. the surgeon in charge of an operation liable for the negligence of his assistants
• In defense, Dr. Cantre contended that the blood pressure cuff caused the injury. On during the time when those assistants are under the surgeon’s control. In this
the other hand, NBI Medico-legal officer Dr. Floresto Arizala testified that Go’s particular case, it can be logically inferred that petitioner, the senior consultant in
injury was a burn that was caused by 10 minutes of exposure by the droplight. He charge during the delivery of Nora’s baby, exercised control over the assistants
believes that the wound was not caused by the blood pressure cuff since the scar assigned to both the use of the droplight and the taking of Nora’s blood pressure.
was not around the arm, it was just on one side of the arm. Hence, the use of the droplight and the blood pressure cuff is also within
• Go’s arm would never be the same. It left an unsightly mark and still causes chronic petitioner’s exclusive control.
pain. When sleeping, Go has to cradle her wounded arm. Her movements are • Third, the gaping wound on Nora’s left arm, by its very nature and considering her
restricted; her children cannot play with the left side of her body as they might condition, could only be caused by something external to her and outside her
accidentally bump the arm, which aches at the slightest touch. Hence, spouses Go control as she was unconscious while in hypovolemic shock. Hence, Nora could
filed for damages against Dr. Cantre. not, by any stretch of the imagination, have contributed to her own injury.
ISSUES & ARGUMENTS

• W/N Dr. Cantre is liable for damages.
o Petitioners: Petitioner-appellant, Dr. Cantre, posits that Nora Go’s wound
was caused not by the droplight but by the constant taking of her blood
pressure, even if the latter was necessary given her condition, does not
absolve her from liability.
o Respondent: Spouses Go claim that Dr. Cantre was negligent in the
practice of his profession
DR. CANTRE IS LIABLE FOR DAMAGES FOR HER NEGLIGENCE

CAUSING HER PATIENT’S WOUNDED ARM.
• In cases involving medical negligence, the doctrine of res ipsa loquitur allows the mere
existence of an injury to justify a presumption of negligence on the part of the
person who controls the instrument causing the injury, provided that the following
requisites concur:
1. The accident is of a kind which ordinarily does not occur in the absence of
someone’s negligence;
CHESKA RESPICIO
Page 85 of 528
78 City of Manila vs. IAC | Paras.
G.R. No. 71159, November 15, 1989 ISSUES & ARGUMENTS
FACTS • W/N the City of Manila is liable for the tortious acts of its employees (torts
• Vivencio Sto. Domingo, Sr. deceased husband of Irene Sto. Domingo died on June only)
4,1971 and buried on June 6,1971 in the North Cemetery which lot was leased by
the city to Irene Sto. Domingo for the period from June 6, 1971 to June 6, 2021 per HOLDING & RATIO DECIDENDI
Official Receipt with an expiry date of June 6, 2021. Full payment of the rental
therefor of P50.00 is evidenced by the said receipt which appears to be regular on its YES
face. Apart from the aforementioned receipt, no other document was executed to • Under the doctrine of respondent superior, petitioner City of Manila is liable for the
embody such lease over the burial lot in question. tortious act committed by its agents who failed to verify and check the duration of
• Believing in good faith that, in accordance with Administrative Order No. 5, Series the contract of lease. The contention of the petitioner-city that the lease is covered
of 1975, dated March 6, 1975, of the City Mayor of Manila prescribing uniform by Administrative Order No. 5, series of 1975 dated March 6, 1975 of the City of
procedure and guidelines in the processing of documents pertaining to and for the Manila for five (5) years only beginning from June 6, 1971 is not meritorious for the
use and disposition of burial lots and plots within the North Cemetery, etc., subject said administrative order covers new leases. When subject lot was certified on
the lot 194 in which the mortal remains of the late Vivencio Sto. Domingo were laid January 25, 1978 as ready for exhumation, the lease contract for fifty (50) years was
to rest, was leased to the bereaved family for five (5) years only, subject lot was still in full force and effect.
certified on January 25, 1978 as ready for exhumation.
• On the basis of such certification, the authorities of the North Cemetery then
headed by defendant Joseph Helmuth authorized the exhumation and removal from
subject burial lot the remains of the late Vivencio Sto. Domingo, Sr., placed the
bones and skull in a bag or sack and kept the same in the depository or bodega of
the cemetery.
• Subsequently, the same lot in question was rented out to another lessee so that when
the plaintiffs herein went to said lot on All Souls Day in their shock, consternation
and dismay, that the resting place of their dear departed did not anymore bear the
stone marker which they lovingly placed on the tomb. Indignant and disgusted over
such a sorrowful finding, Irene Sto. Domingo lost no time in inquiring from the
officer-in-charge of the North Cemetery, defendant Sergio Mallari, and was told that
the remains of her late husband had been taken from the burial lot in question
which was given to another lessee.
• Irene Sto. Domingo was also informed that she can look for the bones of her
deceased husband in the warehouse of the cemetery where the exhumed remains
from the different burial lots of the North Cemetery are being kept until they are
retrieved by interested parties. But to the bereaved widow, what she was advised to
do was simply unacceptable. According to her, it was just impossible to locate the
remains of her late husband in a depository containing thousands upon thousands
of sacks of human bones. She did not want to run the risk of claiming for the wrong
set of bones. She was even offered another lot but was never appeased. She was too
aggrieved that she came to court for relief even before she could formally present
her claims and demands to the city government and to the other defendants named
in the present complaint.
JON LINA
Page 86 of 528
79 Viron Transportation Co. v. Santos | Vitug • It is here well to recall that the driver of an overtaking vehicle must see to it that the
G.R. No. 138296, November 22, 2000 | 345 SCRA 509 conditions are such that an attempt to pass is reasonably safe and prudent, and in
passing must exercise reasonable care. In the absence of clear evidence of
FACTS negligence on the part of the operator of the overtaken vehicle, the courts are
• Viron set of facts: inclined to put the blame for an accident occurring while a passage is being
o On August 16, 1993, at around 2:30 in the afternoon, the Viron Transit Bus, attempted on the driver of the overtaking vehicle (People vs. Bolason, (C.A.) 53 Off.
owned by Viron Transportation Co., driven by Wilfredo Villanueva along Gaz. 4158).
MacArthur Highway within the vicinity of Tarlac coming from the North going
to Manila. VIRON TRANSCO IS LIABLE EVEN IF THEY EXERCISED DILIGENCE
o It was following the Forward Cargo Truck proceeding from the same direction OF A GOOD FATHER OF THE FAMILY IN SELECTING AND
then being driven by Alberto delos Santos. The cargo truck swerved to the SUPERVISING THEIR EMPLOYEES.
right shoulder of the road and, while about to be overtaken by the bus, again
swerved to the left to occupy its lane. It was at that instance that the collision • Transportation Co., Inc., as the registered owner of the bus involved in the vehicular
occurred, the left front side of the truck collided with the right front side of the accident originally brought the action for damages against Santos. We find that the
bus causing the two vehicles substantial damages. counterclaim of Santos alleges the ultimate facts constituting their cause of action.
• Santos set of facts: It is not necessary to state that petitioner was negligent in the supervision or
o At about 12:30 in the afternoon of August 16, 1993, Santos was driving said selection of its employees, as its negligence is presumed by operation of law.
truck along the National Highway within the vicinity of Tarlac. The Viron bus, • As employers of the bus driver, the petitioner is, under Article 2180 of the Civil
tried to overtake his truck, and he swerved to the right shoulder of the highway, Code, directly and primary liable for the resulting damages. The presumption that
but as soon as he occupied the right lane of the road, the cargo truck which he they are negligent flows from the negligence of their employee. That presumption,
was driving was hit by the Viron bus on its left front side, as the bus swerved however, is only juris tantum, not juris et de jure. Their only possible defense is that
to his lane to avoid an incoming bus on its opposite direction they exercised all the diligence of a good father of a family to prevent the damage.
• The lower court dismissed Viron’s complaint and sustained Santos’ counterclaim for Article 2180 reads as follows:
damages. It ordered the petitioner to pay the following amounts: (1) P19,500.00, o “The obligation imposed by Article 2176 is demandable not only for one’s
with interest thereon at 6% per annum from the date of complaint, as actual own acts or omissions, but also for those of persons for whom one is
damages, until the same shall have been fully paid and satisfied; (2) P10,000.00 as responsible.
additional compensatory damages for transportation and accommodations during ♦ Employers shall be liable for the damages caused by their
the trial of this case; (3) P10,000.00 for and as attorney’s fees; and (4) Costs of suit. employees and household helpers acting within the scope of their
assigned tasks, even though the former are not engaged in any
ISSUES & ARGUMENTS business or industry.
• W/N Viron through its driver was at fault
• W/N Viron Transportation Co. was liable for damage caused by their driver
o Petitioner Viron TransCo posit that Santos, in his counterclaim, failed to
state a cause of action and that it they did not aver that Viron did not
exercise diligence of a good father of the family.
THE COLLISION WAS CAUSED BY VIRON TRANSCO THROUGH THEIR

DRIVER VILLANUEVA
• No witnesses for the plaintiff ever contradicted the obtrusive fact that it was while
in the process of overtaking the cargo truck that the Viron bus collided with the
former vehicle. Evidence proves that Viron bus overtook the truck and thus was the
cause of the collision. MIK MALANG
Page 87 of 528
80 Vicente Calalas vs. CA| Mendoza and 1755 of the Code. This provision necessarily shifts to the common carrier the
G.R. No. 122039, May 31, 2000| 332 SCRA 356 burden of proof
• There is, thus, no basis for the contention that the ruling in Civil Case No. 3490,
FACTS finding Salva and his driver Verena liable for the damage to the jeepney of Calalas,
• At 10 o'clock in the morning of August 23, 1989, Sunga, then a college freshman should be binding on Sunga. It is immaterial that the proximate cause of the
majoring in Physical Education at the Siliman University, took a passenger jeepney collision between the jeepney and the truck was the negligence of the truck driver.
owned and operated by Calalas The doctrine of proximate cause is applicable only in actions for quasi-delict, not in
• As the jeepney was filled to capacity of about 24 passengers, Sunga was given by the actions involving breach of contract. The doctrine is a device for imputing liability
conductor an "extension seat," a wooden stool at the back of the door at the rear to a person where there is no relation between him and another party. In such a
end of the vehicle case, the obligation is created by law itself. But, where there is a pre-existing
• On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a contractual relation between the parties, it is the parties themselves who create the
passenger off. As she was seated at the rear of the vehicle, Sunga gave way to the obligation, and the function of the law is merely to regulate the relation thus created.
outgoing passenger Insofar as contracts of carriage are concerned, some aspects regulated by the Civil
• Just as she was doing so, an Isuzu truck driven by Verena and owned by Salva Code are those respecting the diligence required of common carriers with regard to
bumped the left rear portion of the jeepney, injuring Sunga necessitating her the safety of passengers as well as the presumption of negligence in cases of death
confinement and to ambulate in crutches for 3 months or injury to passengers
• Sunga filed a complaint for damages against Calalas, alleging violation of the • In the case at bar, upon the happening of the accident, the presumption of
contract of carriage, to which Calalas in turn filed a third-party complaint against negligence at once arose, and it became the duty of Calalas to prove that he had to
Salva, the owner of the Isuzu truck observe extraordinary diligence in the care of his passengers
• The lower court rendered judgment against Salva as third-party defendant and • Now, did the driver of jeepney carry Sunga "safely as far as human care and
absolved Calalas of liability, holding that it was the driver of the Isuzu truck who foresight could provide, using the utmost diligence of very cautious persons, with
was responsible for the accident, taking cognizance of another case (Civil Case No. due regard for all the circumstances" as required by Art. 1755? The Court did not
3490), filed by Calalas against Salva and Verena, for quasi-delict, in which Branch 37 think so. Several factors militate against the contention of Calalas
of the same court held Salva and his driver Verena jointly liable to Calalas for the o First, as found by the CA, the jeepney was not properly parked, its rear
damage to his jeepney portion being exposed about 2 meters from the broad shoulders of the
• On appeal, the CA reversed on the ground that Sunga's cause of action was based highway, and facing the middle of the highway in a diagonal angle. This is a
on a contract of carriage, not quasi-delict, and that the common carrier failed to violation of the R.A. No. 4136, as amended, or the Land Transportation
exercise the diligence required under the Civil Code, and dismissed the third-party and Traffic Code
complaint against Salva and adjudged Calalas liable for damages to Sunga o Second, it is undisputed that his driver took in more passengers than the
allowed seating capacity of the jeepney, a violation of §32(a) of the same
ISSUES & ARGUMENTS law
• W/N Calalas can be held civilly liable for damages • The fact that Sunga was seated in an "extension seat" placed her in a peril greater
than that to which the other passengers were exposed. Therefore, not only was
HOLDING & RATIO DECIDENDI Calalas unable to overcome the presumption of negligence imposed on him for the
injury sustained by Sunga, but also, the evidence shows he was actually negligent in
YES, CALALAS IS LIABLE FOR DAMAGES BASED ON BREACH OF A transporting passengers
CONTRACT OF CARRIAGE
• In quasi-delict, the negligence or fault should be clearly established because it is the Judgment AFFIRMED WITH MODIFICATION.
basis of the action, whereas in breach of contract, the action can be prosecuted
merely by proving the existence of the contract and the fact that the obligor, in this
case the common carrier, failed to transport his passenger safely to his destination.
In case of death or injuries to passengers, Art. 1756 of the Civil Code provides that
common carriers are presumed to have been at fault or to have acted negligently
unless they prove that they observed extraordinary diligence as defined in Arts. 1733
KATH MATIBAG
Page 88 of 528
81 Pestano v. Sumayang| Panganiban, J.
G.R. No. 139875. December 4, 2000
(Respondent Superior)
FACTS
• At 2:00 o’clock on the afternoon of August 9, 1986, Ananias Sumayang was riding a
motorcycle along the national highway in Ilihan, Tabagon, Cebu. Riding with him
was his friend Manuel Romagos.
• As they came upon a junction, they were hit by a passenger bus driven by Petitioner
Gregorio Pestaño and owned by Petitioner Metro Cebu Autobus Corporation,
which had tried to overtake them, sending the motorcycle and its passengers
hurtling upon the pavement. Both Sumayang and Romagos were rushed to the
hospital in Sogod, where Sumayang was pronounced dead on arrival. Romagos was
transferred to the Cebu Doctors’ Hospital, but he died the day after.
• The heirs of Sumayang instituted criminal action against Pestano and filed an action
for damages against the driver, Pestano and Metro Cebu as the owner and operator
of the bus.
• The CA and RTC ruled that Pestano was negligent and is therefore liable criminally
and civilly. The appellate court opined that Metro Cebu had shown laxity in the
conduct of its operations and in the supervision of its employees. By allowing the
bus to ply its route despite the defective speedometer, said petitioner showed its
indifference towards the proper maintenance of its vehicles. Having failed to
observe the extraordinary diligence required of public transportation companies, it
was held vicariously liable to the victims of the vehicular accident.
ISSUES & ARGUMENTS

W/N the CA erred in holding the bus owner and operator vicariously liable
The Court of Appeals is correct in holding the bus owner and operator vicariously liable.
Under Articles 2180 and 2176 of the Civil Code, owners and managers are responsible
for damages caused by their employees. When an injury is caused by the negligence of a
servant or an employee, the master or employer is presumed to be negligent either in the
selection or in the supervision of that employee. This presumption may be overcome
only by satisfactorily showing that the employer exercised the care and the diligence of a
good father of a family in the selection and the supervision of its employee.
The CA said that allowing Pestaño to ply his route with a defective speedometer showed
laxity on the part of Metro Cebu in the operation of its business and in the supervision
of its employees. The negligence alluded to here is in its supervision over its driver, not
in that which directly caused the accident. The fact that Pestaño was able to use a bus
with a faulty speedometer shows that Metro Cebu was remiss in the supervision of its
employees and in the proper care of its vehicles. It had thus failed to conduct its
business with the diligence required by law.
NINA MEJIA
Page 89 of 528
82 Ramos v CA | Kapunan procedural rule. It is regarded as a mode of proof, or a mere procedural of
G.R. No. 124354 December 29, 1999| convenience since it furnishes a substitute for, and relieves a plaintiff of, the burden
of producing specific proof of negligence. Hence, mere invocation and application
FACTS of the doctrine does not dispense with the requirement of proof of negligence. It is
• Erlinda Ramos underwent an operation known as cholecystectomy (removal of simply a step in the process of such proof, permitting the plaintiff to present along
stone in her gallbladder) under the hands of Dr. Orlino Hosaka. He was with the proof of the accident, enough of the attending circumstances to invoke the
accompanied by Dr. Perfecta Gutierrez, an anesthesiologist which Dr. Hosaka doctrine, creating an inference or presumption of negligence, and to thereby place
recommended since Ramos (and her husband Rogelio) did not know any. on the defendant the burden of going forward with the proof. Still, before resort to
• The operation was schedule at 9am of June 17, 1985 but was however delayed for the doctrine may be allowed, the following requisites must be satisfactorily shown:
three hours due to the late arrival of Dr. Hosaka. 1. The accident is of a kind which ordinarily does not occur in the
• Dr. Gutierrez subsequently started trying to intubate her. And at around 3pm, absence of someone's negligence;
Erlinda was seen being wheeled to the Intensive Care Unit (ICU). The doctors 2. It is caused by an instrumentality within the exclusive control of the
explained to petitioner Rogelio that his wife had bronchospasm. Erlinda stayed in defendant or defendants; and
the ICU for a month. She was released from the hospital only four months later or 3. The possibility of contributing conduct which would make the
on November 15, 1985. Since the ill-fated operation, Erlinda remained in comatose plaintiff responsible is eliminated.
condition until she died on August 3, 1999. • Although generally, expert medical testimony is relied upon in malpractice
• RTC ruled in favor of the petitioners, holding the defendants guilty of, at the very suits to prove that a physician has done a negligent act or that he has
least, negligence in the performance of their duty to plaintiff-patient Erlinda Ramos. deviated from the standard medical procedure, when the doctrine of res ipsa
• On appeal to CA, the said decision was reversed – dismissing the complaint against loquitur is availed by the plaintiff, the need for expert medical testimony is
the defendants. Hence this petition. dispensed with because the injury itself provides the proof of negligence. The
reason is that the general rule on the necessity of expert testimony applies
only to such matters clearly within the domain of medical science, and not to
ISSUES & ARGUMENTS matters that are within the common knowledge of mankind which may be
• W/N the private respondents should be held liable for the injury caused to testified to by anyone familiar with the facts. When the doctrine is appropriate,
Erlinda and her family? all that the patient must do is prove a nexus between the particular act or omission
complained of and the injury sustained while under the custody and management of
the defendant without need to produce expert medical testimony to establish the
HOLDING & RATIO DECIDENDI standard of care. Resort to res ipsa loquitur is allowed because there is no other way,
under usual and ordinary conditions, by which the patient can obtain redress for
YES. injury suffered by him.
• We find the doctrine of res ipsa loquitur appropriate in the case at bar. As will
• Res ipsa loquitur is a Latin phrase which literally means "the thing or the transaction hereinafter be explained, the damage sustained by Erlinda in her brain prior
speaks for itself." The phrase "res ipsa loquitur'' is a maxim for the rule that the fact to a scheduled gall bladder operation presents a case for the application of
of the occurrence of an injury, taken with the surrounding circumstances, may res ipsa loquitur.
permit an inference or raise a presumption of negligence, or make out a plaintiff's • In the present case, Erlinda submitted herself for cholecystectomy and expected a
prima facie case, and present a question of fact for defendant to meet with an routine general surgery to be performed on her gall bladder. On that fateful day she
explanation. delivered her person over to the care, custody and control of private respondents
• The doctrine of res ipsa loquitur is simply a recognition of the postulate that, as a who exercised complete and exclusive control over her. At the time of submission,
matter of common knowledge and experience, the very nature of certain types of Erlinda was neurologically sound and, except for a few minor discomforts, was
occurrences may justify an inference of negligence on the part of the person who likewise physically fit in mind and body. However, during the administration of
controls the instrumentality causing the injury in the absence of some explanation by anesthesia and prior to the performance of cholecystectomy she suffered irreparable
the defendant who is charged with negligence. damage to her brain. Thus, without undergoing surgery, she went out of the
• However, much has been said that res ipsa loquitur is not a rule of substantive law operating room already decerebrate and totally incapacitated. Obviously, brain
and, as such, does not create or constitute an independent or separate ground of damage, which Erlinda sustained, is an injury which does not normally occur in the
liability. Instead, it is considered as merely evidentiary or in the nature of a process of a gall bladder operation. In fact, this kind of situation does not in the
Page 90 of 528
absence of negligence of someone in the administration of anesthesia and in the use Erlinda's cholecystectomy, and was in fact over three hours late for the
of endotracheal tube. Normally, a person being put under anesthesia is not rendered latter's operation. Because of this, he had little or no time to confer with his
decerebrate as a consequence of administering such anesthesia if the proper anesthesiologist regarding the anesthesia delivery. This indicates that he was
procedure was followed. Furthermore, the instruments used in the administration of remiss in his professional duties towards his patient. Thus, he shares equal
anesthesia, including the endotracheal tube, were all under the exclusive control of responsibility for the events which resulted in Erlinda's condition.
private respondents, who are the physicians-in-charge. Likewise, petitioner Erlinda • Notwithstanding the general denial made by respondent hospital to the effect that
could not have been guilty of contributory negligence because she was under the the respondent doctors (referred to as “consultants”) in this case are not their
influence of anesthetics which rendered her unconscious. employees, there is a showing that the hospital exercises significant control in the
• We disagree with the findings of the Court of Appeals. We hold that private hiring and firing of consultants and in the conduct of their work within the hospital
respondents were unable to disprove the presumption of negligence on their premises.
part in the care of Erlinda and their negligence was the proximate cause of • The basis for holding an employer solidarily responsible for the negligence of its
her piteous condition. employee is found in Article 2180 of the Civil Code which considers a person
• Dr. Gutierrez (anesthesiologist) is held liable for failure to perform the accountable not only for his own acts but also for those of others based on the
necessary pre-operative evaluation which includes taking the patient's former's responsibility under a relationship of patria potestas. Such responsibility
medical history, review of current drug therapy, physical examination and ceases when the persons or entity concerned prove that they have observed
interpretation of laboratory data. This physical examination performed by the the diligence of a good father of the family to prevent damage. In other words,
anesthesiologist is directed primarily toward the central nervous system, while the burden of proving negligence rests on the plaintiffs, once negligence is
cardiovascular system, lungs and upper airway. A thorough analysis of the shown, the burden shifts to the respondents (parent, guardian, teacher or employer)
patient's airway normally involves investigating the following: cervical spine who should prove that they observed the diligence of a good father of a family to
mobility, temporomandibular mobility, prominent central incisors, diseased prevent damage.
or artificial teeth, ability to visualize uvula and the thyromental distance. • In the instant case, respondent hospital, apart from a general denial of its
• In the case at bar, respondent Dra. Gutierrez admitted that she saw Erlinda for the responsibility over respondent physicians, failed to adduce evidence showing
first time on the day of the operation itself, on 17 June 1985. Before this date, no that it exercised the diligence of a good father of a family in the hiring and
prior consultations with, or pre-operative evaluation of Erlinda was done by her. supervision of the latter. It failed to adduce evidence with regard to the degree of
Until the day of the operation, respondent Dra. Gutierrez was unaware of the supervision which it exercised over its physicians. In neglecting to offer such proof,
physiological make-up and needs of Erlinda. She was likewise not properly informed or proof of a similar nature, respondent hospital thereby failed to discharge its
of the possible difficulties she would face during the administration of anesthesia to burden under the last paragraph of Article 2180. Having failed to do this,
Erlinda. Respondent Dra. Gutierrez' act of seeing her patient for the first time only respondent hospital is consequently solidarily responsible with its physicians
an hour before the scheduled operative procedure was, therefore, an act of for Erlinda's condition.
exceptional negligence and professional irresponsibility. The measures cautioning
prudence and vigilance in dealing with human lives lie at the core of the physician's The CA decision and resolution are hereby modified so as to award in favor of
centuries-old Hippocratic Oath. Her failure to follow this medical procedure is, petitioners, and solidarily against private respondents the following: 1)
therefore, a clear indicia of her negligence. P1,352,000.00 as actual damages computed as of the date of promulgation of this
• Having failed to observe common medical standards in pre-operative management decision plus a monthly payment of P8,000.00 up to the time that petitioner
and intubation, respondent Dra. Gutierrez' negligence resulted in cerebral anoxia Erlinda Ramos expires or miraculously survives; 2) P2,000,000.00 as moral
and eventual coma of Erlinda. damages, 3) P1,500,000.00 as temperate damages; 4) P100,000.00 each as
• Dr. Hosaka, being the head of the surgical team (“captain of the ship”), it exemplary damages and attorney's fees; and, 5) the costs of the suit.
was his responsibility to see to it that those under him perform their task in
the proper manner. Respondent Dr. Hosaka's negligence can be found in his
failure to exercise the proper authority (as the "captain" of the operative
team) in not determining if his anesthesiologist observed proper anesthesia
protocols. In fact, no evidence on record exists to show that respondent Dr.
Hosaka verified if respondent Dra. Gutierrez properly intubated the patient.
Furthermore, it does not escape us that respondent Dr. Hosaka had
scheduled another procedure in a different hospital at the same time as TEL VIRTUDEZ
Page 91 of 528
83 Ramos vs. Court of Appeals | Kapunan • Dr. Gutierrez’ claim of lack of negligence on her part is belied by the records of the
G.R. No. 124354, April 11, 2002| 380 SCRA 467 case. It has been sufficiently established that she failed to exercise the standards of
care in the administration of anesthesia on a patient. The conduct of a
FACTS preanesthetic/preoperative evaluation prior to an operation, whether elective or
• Petitioner Erlinda Ramos, after seeking professional medical help, was advised to emergency, cannot be dispensed with. Such evaluation is necessary for the
undergo an operation for the removal of a stone in her gall bladder. She was formulation of a plan of anesthesia care suited to the needs of the patient
referred to Dr. Hosaka, a surgeon, who agreed to perform the operation on her. The concerned.
operation was scheduled for at 9:00 in the morning at private respondent De Los • Nonetheless, Dr. Gutierrez omitted to perform a thorough preoperative evaluation
Santos Medical Center (DLSMC). Since neither petitioner Erlinda nor her husband, on Erlinda. As she herself admitted, she saw Erlinda for the first time on the day of
petitioner Rogelio, knew of any anesthesiologist, Dr. Hosaka recommended to them the operation itself, one hour before the scheduled operation. She auscultated the
the services of Dr. Gutierrez. patient’s heart and lungs and checked the latter’s blood pressure to determine if
• Petitioner Erlinda was admitted to the DLSMC the day before the scheduled Erlinda was indeed fit for operation. However, she did not proceed to examine the
operation. By 7:30 in the morning of the following day, petitioner Erlinda was patient’s airway. Had she been able to check petitioner Erlinda’s airway prior to the
already being prepared for operation. Upon the request of petitioner Erlinda, her operation, Dr. Gutierrez would most probably not have experienced difficulty in
sister-in-law, Cruz, who was then Dean of the College of Nursing at the Capitol intubating the former, and thus the resultant injury could have been avoided.
Medical Center, was allowed to accompany her inside the operating room. • For his part, Dr. Hosaka mainly contends that the Court erred in finding him
• By 10:00 in the morning, when Dr. Hosaka was still not around, petitioner Rogelio negligent as a surgeon by applying the Captain-of-the-Ship doctrine. Dr. Hosaka
already wanted to pull out his wife from the operating room. He met Dr. Garcia, argues that the trend in United States jurisprudence has been to reject said doctrine
who remarked that he was also tired of waiting for Dr. Hosaka. Dr. Hosaka finally in light of the developments in medical practice. He points out that anesthesiology
arrived at the hospital more than three (3) hours after the scheduled operation. Cruz, and surgery are two distinct and specialized fields in medicine and as a surgeon, he is
who was then still inside the operating room, heard about Dr. Hosaka’s arrival. not deemed to have control over the acts of Dr. Gutierrez. As anesthesiologist, Dr.
While she held the hand of Erlinda, Cruz saw Dr. Gutierrez having a hard time Gutierrez is a specialist in her field and has acquired skills and knowledge in the
intubating the patient. Cruz noticed a bluish discoloration of Erlinda’s nailbeds on course of her training which Dr. Hosaka, as a surgeon, does not possess.
her left hand. She (Cruz) then heard Dr. Hosaka instruct someone to call Dr. • That there is a trend in American jurisprudence to do away with the Captain-of-the-
Calderon, another anesthesiologist. When he arrived, Dr. Calderon attempted to Ship doctrine does not mean that this Court will ipso facto follow said trend. Due
intubate the patient. The nailbeds of the patient remained bluish, thus, she was regard for the peculiar factual circumstances obtaining in this case justify the
placed in a trendelenburg position – a position where the head of the patient is application of the Captain-of-the-Ship doctrine. From the facts on record it can be
placed in a position lower than her feet. logically inferred that Dr. Hosaka exercised a certain degree of, at the very least,
• At almost 3:00 in the afternoon, Cruz saw Erlinda being wheeled to the Intensive supervision over the procedure then being performed on Erlinda.
Care Unit (ICU). The doctors explained to petitioner Rogelio that his wife had • First, it was Dr. Hosaka who recommended to petitioners the services of Dr.
bronchospasm. Erlinda stayed in the ICU for a month. She was released from the Gutierrez. In effect, he represented to petitioners that Dr. Gutierrez possessed the
hospital only four months later. Since then, Erlinda remained in comatose condition necessary competence and skills. Drs. Hosaka and Gutierrez had worked together
until she died in 1999 since 1977. Second, Dr. Hosaka himself admitted that he was the attending
physician of Erlinda. Thus, when Erlinda showed signs of cyanosis, it was Dr.
ISSUES & ARGUMENTS Hosaka who gave instructions to call for another anesthesiologist and cardiologist to
help resuscitate Erlinda. Third, it is conceded that in performing their
• W/N Dr. Gutierrez (anesthesiologist) is negligent and hence liable responsibilities to the patient, Drs. Hosaka and Gutierrez worked as a team. Their
• W/N Dr. Hosaka is liable under the Captain of the Ship Doctrine? work cannot be placed in separate watertight compartments because their duties
intersect with each other.
HOLDING & RATIO DECIDENDI Petition partly granted. DLMSC absolved from liability. Drs. Guitierrez and Hosala solidarily liable.
DR. GUTIERREZ NEGLIGENT. DR HOSAKA LIABLE FOR THE ACTS OF

HIS TEAM.
MAUI MORALES
Page 92 of 528
84 Castilex vs. Vasquez | Kapunan Hence, in the absence of some special benefit to the employer other than
G.R. No. 129329, July 31, 2001 | 362 SCRA 56 the mere performance of the services available at the place where he is
needed, the employee is not acting within the scope of his employment
FACTS even though he uses his employer's motor vehicle.
• On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez, was o An employer who loans his motor vehicle to an employee for the latter's
driving a Honda motorcycle around Fuente Osmeña Rotunda. He was traveling personal use outside of regular working hours is generally not liable for the
counter-clockwise, (the normal flow of traffic in a rotunda) but without any employee's negligent operation of the vehicle during the period of
protective helmet or goggles. He was also only carrying a Student's Permit to Drive permissive use, even where the employer contemplates that a regularly
at the time. Upon the other hand, Benjamin Abad was a production manager of assigned motor vehicle will be used by the employee for personal as well as
Castilex Industrial Corporation, registered owner of the Toyota Hi-Lux Pick-up with business purposes and there is some incidental benefit to the employer.
plate no. GBW-794 which Abad drove car out of a parking lot. Instead of going Even where the employee's personal purpose in using the vehicle has been
around the Osmeña rotunda he went against the flow of the traffic in proceeding to accomplished and he has started the return trip to his house where the
his route to General Maxilom St. or to Belvic St.. The motorcycle of Vasquez and vehicle is normally kept, it has been held that he has not resumed his
the pick-up of Abad collided with each other causing severe injuries to Vasquez. employment, and the employer is not liable for the employee's negligent
Abad stopped his vehicle and brought Vasquez to the Southern Islands Hospital operation of the vehicle during the return trip.
and later to the Cebu Doctor's Hospital. On September 5, 1988, Vasquez died at the • In this case , ABAD did some overtime work at the petitioner's office, which was
Cebu Doctor's Hospital. Abad signed an acknowledgment of Responsible Party located in Cabangcalan, Mandaue City. Thereafter, he went to Goldie's Restaurant in
wherein he agreed to pay whatever hospital bills, professional fees and other Fuente Osmeña, Cebu City, which is about seven kilometers away from petitioner's
incidental charges Vasquez may incur. place of business. At the Goldie's Restaurant, ABAD took some snacks and had a
chat with friends. It was when ABAD was leaving the restaurant that the incident in
question occurred. Thus ABAD was engaged in affairs of his own or was carrying
ISSUES & ARGUMENTS out a personal purpose not in line with his duties at the time he figured in a
• W/N Castilex as employer of Abad can be held liable with Abad. vehicular accident.
No.
• The fifth paragraph of article 2180 states Employers shall be liable for the
damages caused by their employees and household helpers acting within the
scope of their assigned tasks, even though the former are not engaged in any
business or industry.
• In order for this paragraph to apply, it must be shown that the employee was acting
within the scope of his assigned tasks. Here it was not sufficiently proven that such
was the case.
• Jurisprudence provides:
o An employee who uses his employer's vehicle in going from his work to a
place where he intends to eat or in returning to work from a meal is not
ordinarily acting within the scope of his employment in the absence of
evidence of some special business benefit to the employer. Evidence that
by using the employer's vehicle to go to and from meals, an employee is
enabled to reduce his time-off and so devote more time to the
performance of his duties supports the finding that an employee is acting
within the scope of his employment while so driving the vehicle.
o Traveling to and from the place of work is ordinarily a personal problem
or concern of the employee, and not a part of his services to his employer. JAN PORTER
Page 93 of 528
85 Nogales vs. Capitol Medical Center | Carpio, J.: At 6:22 a.m., Dr. Estrada, assisted by Dr. Villaflor, applied low forceps to extract
G.R. No. 142625, Dec. 19, 2006 | 511 SCRA 204 Corazon's baby. In the process, a 1.0 x 2.5 cm. piece of cervical tissue was allegedly torn.
The baby came out in an apnic, cyanotic, weak and injured condition. Consequently, the
FACTS baby had to be intubated and resuscitated by Dr. Enriquez and Dr. Payumo.
Pregnant with her fourth child, Corazon Nogales ("Corazon"), who was then 37 years
old, was under the exclusive prenatal care of Dr. Oscar Estrada ("Dr. Estrada") At 6:27 a.m., Corazon began to manifest moderate vaginal bleeding which rapidly
beginning on her fourth month of pregnancy or as early as December 1975. While became profuse. Corazon's blood pressure dropped from 130/80 to 60/40 within five
Corazon was on her last trimester of pregnancy, Dr. Estrada noted an increase in her minutes. There was continuous profuse vaginal bleeding. The assisting nurse
blood pressure and development of leg edema5 indicating preeclampsia,6 which is a administered hemacel through a gauge 19 needle as a side drip to the ongoing
dangerous complication of pregnancy.7 intravenous injection of dextrose.
Around midnight of 25 May 1976, Corazon started to experience mild labor pains At 7:45 a.m., Dr. Estrada ordered blood typing and cross matching with bottled blood. It
prompting Corazon and Rogelio Nogales ("Spouses Nogales") to see Dr. Estrada at his took approximately 30 minutes for the CMC laboratory, headed by Dr. Perpetua Lacson
home. After examining Corazon, Dr. Estrada advised her immediate admission to the ("Dr. Lacson"), to comply with Dr. Estrada's order and deliver the blood.
Capitol Medical Center ("CMC").
At 8:00 a.m., Dr. Noe Espinola ("Dr. Espinola"), head of the Obstetrics-Gynecology
On 26 May 1976, Corazon was admitted at 2:30 a.m. at the CMC after the staff nurse Department of the CMC, was apprised of Corazon's condition by telephone. Upon being
noted the written admission request8 of Dr. Estrada. Upon Corazon's admission at the informed that Corazon was bleeding profusely, Dr. Espinola ordered immediate
CMC, Rogelio Nogales ("Rogelio") executed and signed the "Consent on Admission and hysterectomy. Rogelio was made to sign a "Consent to Operation."13
Agreement"9 and "Admission Agreement."10 Corazon was then brought to the labor
room of the CMC. Due to the inclement weather then, Dr. Espinola, who was fetched from his residence by
an ambulance, arrived at the CMC about an hour later or at 9:00 a.m. He examined the
Dr. Rosa Uy ("Dr. Uy"), who was then a resident physician of CMC, conducted an patient and ordered some resuscitative measures to be administered. Despite Dr.
internal examination of Corazon. Dr. Uy then called up Dr. Estrada to notify him of her Espinola's efforts, Corazon died at 9:15 a.m. The cause of death was "hemorrhage, post
findings. partum."14
Based on the Doctor's Order Sheet,11 around 3:00 a.m., Dr. Estrada ordered for 10 mg. On 14 May 1980, petitioners filed a complaint for damages15 with the Regional Trial
of valium to be administered immediately by intramuscular injection. Dr. Estrada later Court16 of Manila against CMC, Dr. Estrada, Dr. Villaflor, Dr. Uy, Dr. Enriquez, Dr.
ordered the start of intravenous administration of syntocinon admixed with dextrose, Lacson, Dr. Espinola, and a certain Nurse J. Dumlao for the death of Corazon.
5%, in lactated Ringers' solution, at the rate of eight to ten micro-drops per minute. Petitioners mainly contended that defendant physicians and CMC personnel were
negligent in the treatment and management of Corazon's condition. Petitioners charged
According to the Nurse's Observation Notes,12 Dr. Joel Enriquez ("Dr. Enriquez"), an CMC with negligence in the selection and supervision of defendant physicians and
anesthesiologist at CMC, was notified at 4:15 a.m. of Corazon's admission. Subsequently, hospital staff.
when asked if he needed the services of an anesthesiologist, Dr. Estrada refused. Despite
Dr. Estrada's refusal, Dr. Enriquez stayed to observe Corazon's condition. ISSUES & ARGUMENTS
• W/N CMC should be held liable
At 6:00 a.m., Corazon was transferred to Delivery Room No. 1 of the CMC. At 6:10
a.m., Corazon's bag of water ruptured spontaneously. At 6:12 a.m., Corazon's cervix was HOLDING & RATIO DECIDENDI
fully dilated. At 6:13 a.m., Corazon started to experience convulsions.
YES
At 6:15 a.m., Dr. Estrada ordered the injection of ten grams of magnesium sulfate. • The mere fact that a hospital permitted a physician to practice medicine and use its
However, Dr. Ely Villaflor ("Dr. Villaflor"), who was assisting Dr. Estrada, administered facilities is not sufficient to render the hospital liable for the negligence of a
only 2.5 grams of magnesium sulfate. physician who is an independent contractor
Page 94 of 528
o There is no proof that defendant physician was an employee of  Doctrine of Apparent Authority (DAA) - a hospital can
defendant hospital or that the latter had reason to know that any acts be held vicariously liable for the negligent acts of a physician
of malpractice would take place providing care at the hospital, regardless of whether the
• Borrowed Servant Doctrine – once the surgeon enters the operating room and physician is an independent contractor, unless the patient
takes charge of the proceedings, the acts or omissions of operating room knows, or should have known, that the physician is an
personnel, and any negligence associated with such acts or omissions, are imputable independent contractor.
to the surgeon.  Elements:
o While the assisting physicians and nurses may be employed by the • Hospital, or its agent, acted in a manner that would
hospital, or engaged by the patient, they normally become the lead a reasonable person to conclude that the
temporary servants or agents of the surgeon in charge while the individual who was alleged to be negligent was an
operation is in progress, and liability may be imposed upon the employee or agent of the hospital
surgeon for their negligent acts under the doctrine of respondeat superior • Where the acts of the agent create the appearance
 A hospital is the employer, master, or principal of a physician of authority, the plaintiff must also prove that the
employee, servant, or agent, and may be held liable for the hospital had knowledge of and acquiesced in them;
physician’s negligence and (3) t
• While "consultants" are not, technically employees, a point which respondent • The plaintiff acted in reliance upon the conduct of
hospital asserts in denying all responsibility for the patient's condition, the control the hospital or its agent, consistent with ordinary
exercised, the hiring, and the right to terminate consultants all fulfill the important care and prudence
hallmarks of an employer-employee relationship, with the exception of the payment o 2 Factors to determine liability of an independent contractor-
of wages. physician:
o In assessing whether such a relationship in fact exists, the control test  Hospital’s manifestations
is determining. Accordingly, on the basis of the foregoing, we rule that • Inquiry whether the hospital acted in a manner
for the purpose of allocating responsibility in medical negligence cases, which would lead a reasonable person to conclude
an employer-employee relationship in effect exists between hospitals that the individual who was alleged to be negligent
and their attending and visiting physicians. was an employee or agent of the hospital
• After a thorough examination of the voluminous records of this case, the Court  Patient’s reliance
finds no single evidence pointing to CMC's exercise of control over Dr. • Inquiry on whether the plaintiff acted in reliance
Estrada's treatment and management of Corazon's condition. upon the conduct of the hospital or its agent,
o It is undisputed that throughout Corazon's pregnancy, she was under consistent with ordinary care and prudenc
the exclusive prenatal care of Dr. Estrada. At the time of Corazon's o Circumstances of the cases showing application of DAA:
admission at CMC and during her delivery, it was Dr. Estrada, assisted  CMC granted Dr. Estrada staff privileges
by Dr. Villaflor, who attended to Corazon.  Consent forms were printed on CMC letterhead
o There was no showing that CMC had a part in diagnosing Corazon's  Dr. Estrada’s referral of Corazon’s case with other physicians
condition. of CMC gave the impression that he, as a member of the
o While Dr. Estrada enjoyed staff privileges at CMC, such fact alone did CMC’s medical staff, was collaborating with other CMC-
not make him an employee of CMC.42 CMC merely allowed Dr. employed specialists
Estrada to use its facilities43 when Corazon was about to give birth,  Spouses Nogales’ took Dr. Estrada as their physician in
which CMC considered an emergency. Considering these consideration of his connection with a reputable hospital
circumstances, Dr. Estrada is not an employee of CMC, but an (CMC)
independent contractor. • Played a significant role in the Spouses’ decision
• Question now is whether CMC is automatically exempt from liability
considering that Dr. Estrada is an independent contractor-physician. WHEREFORE, CMC is found liable to pay the corresponding damages
o General Rule: Hospital is NOT liable for the negligence of an
independent contractor-physician
o Exception: CEO OCAMPO
Page 95 of 528
86 Professional Services Inc. vs. Natividad | Sandoval-Guttierez
G.R. No. 126467, January 31, 2007| 513 SCRA 478 Simply put, the elements are duty, breach, injury and proximate causation. Dr, Ampil, as
the lead surgeon, had the duty to remove all foreign objects, such as gauzes, from
FACTS Natividad’s body before closure of the incision. When he failed to do so, it was his duty
to inform Natividad about it. Dr. Ampil breached both duties. Such breach caused injury
• Natividad Agana was rushed to the Medical City General Hospital (Medical City to Natividad, necessitating her further examination by American doctors and another
Hospital) because of difficulty of bowel movement and bloody anal discharge. After a surgery. That Dr. Ampil’s negligence is the proximate cause12 of Natividad’s injury could
series of medical examinations, Dr. Miguel Ampil diagnosed her to be suffering from be traced from his act of closing the incision despite the information given by the
"cancer of the sigmoid." attending nurses that two pieces of gauze were still missing. That they were later on
• Dr. Ampil, assisted by the medical staff of the Medical City Hospital, performed an extracted from Natividad’s vagina established the causal link between Dr. Ampil’s
anterior resection surgery on Natividad. A hysterectomy had to be performed on her, negligence and the injury.
which was completed by Dr. Fuentes. And from that point, Dr. Ampil took over,
completed the operation and closed the incision. YES
• However, the operation appeared to be flawed. In the corresponding Record of • One important legal change is an increase in hospital liability for medical
Operation, the attending nurses entered the remarks to the effect that 2 sponges were malpractice. Many courts now allow claims for hospital vicarious liability under the
lacking and after an unsuccessful search by the surgeon, the closure was continued. theories of respondeat superior, apparent authority, ostensible authority, or agency
• Days after, Natividad started complaining about excruciating pains in the anal region. by estoppel.
She went back to Dr Ampil and the latter assured her that it’s a normal consequence • ART. 2180. The obligation imposed by Article 2176 is demandable not only for
of the operation. The pain continued so Natividad, with her husband, went to the US one’s own acts or omissions, but also for those of persons for whom one is
for another consultation. The hospital there informed her that she’s free of cancer and responsible.
was advised to come back. The couple returned. Then the unthinkable happened. • The responsibility treated of in this article shall cease when the persons herein
Natividad’s daughter saw a gauze protruding from Natividad’s vagina. (hay grabe) mentioned prove that they observed all the diligence of a good father of a family to
• Dr Ampil rushed to her house and removed the gauze measuring 1.5 inches. prevent damage.
Thereafter the doctor assured her that the pain would eventually disappear. But it • The case of Schloendorff v. Society of New York Hospital26 was then considered
didn’t, and in fact intensified. She then went to another hospital where a foul smelling an authority for this view. The "Schloendorff doctrine" regards a physician, even if
gauze of the same length was found again. employed by a hospital, as an independent contractor because of the skill he
• The couple filed with the QC RTC a complaint for damages against the PSI, Medical exercises and the lack of control exerted over his work. Under this doctrine,
City Hospital, Dr. Fuentes and Dr Ampil for their negligence and malpractice for hospitals are exempt from the application of the respondeat superior principle for
concealing their acts of negligence. fault or negligence committed by physicians in the discharge of their profession.
• Enrique Agana also filed with the Professional Regulation Commission (PRC) an • However, the efficacy of the foregoing doctrine has weakened with the significant
administrative complaint for gross negligence and malpractice against Dr. Ampil and developments in medical care. Courts came to realize that modern hospitals are
Dr. Fuentes increasingly taking active role in supplying and regulating medical care to patients.
• The PRC dismissed the case against Dr Ampil and found Dr. Fuentes to be negligent No longer were a hospital’s functions limited to furnishing room, food, facilities for
and found liable to reimburse treatment and operation, and attendants for its patients.
• Both the RTC and CA found Dr. Ampil guilty of negligence and malpractice • In Bing v. Thunig,27 the New York Court of Appeals deviated from the
Schloendorff doctrine, noting that modern hospitals actually do far more than
ISSUES & ARGUMENTS provide facilities for treatment. Rather, they regularly employ, on a salaried basis, a
large staff of physicians, interns, nurses, administrative and manual workers. They
W/N Dr. Ampil is guilty of negligence and medical malpractice charge patients for medical care and treatment, even collecting for such services
W/N PSI, the hospital can be held liable for damages under the Respondeat Superior through legal action, if necessary. The court then concluded that there is no reason
doctrine to exempt hospitals from the universal rule of respondeat superior.
• In other words, private hospitals, hire, fire and exercise real control over their
HOLDING & RATIO DECIDENDI- attending and visiting ‘consultant’ staff. While ‘consultants’ are not, technically
employees, x x x, the control exercised, the hiring, and the right to terminate
YES
Page 96 of 528
consultants all fulfill the important hallmarks of an employer-employee relationship,
with the exception of the payment of wages
• The Ramos pronouncement is not our only basis in sustaining PSI’s liability. Its
liability is also anchored upon the agency principle of apparent authority or agency
by estoppel and the doctrine of corporate negligence which have gained acceptance
in the determination of a hospital’s liability for negligent acts of health professionals.
• In this case, PSI publicly displays in the lobby of the Medical City Hospital the
names and specializations of the physicians associated or accredited by it, including
those of Dr. Ampil and Dr. Fuentes. We concur with the Court of Appeals’
conclusion that it "is now estopped from passing all the blame to the physicians
whose names it proudly paraded in the public directory leading the public to believe
that it vouched for their skill and competence." Indeed, PSI’s act is tantamount to
holding out to the public that Medical City Hospital, through its accredited
physicians, offers quality health care services.
MAGIC MOVIDO
Page 97 of 528
87 Mallari Sr. and Mallari Jr. v. CA and Bulletin Publishing Corp. | Bellosillo Code. The proximate cause of the collision was the sole negligence of the driver of
G.R. No.128607, January 31, 2000 the passenger jeepney, petitioner Mallari Jr., who recklessly operated and drove his
jeepney in a lane where overtaking was not allowed by traffic rules.
FACTS • The rule is settled that a driver abandoning his proper lane for the purpose of
• The passenger jeepney driven by petitioner Alfredo Mallari Jr. and owned by his co- overtaking another vehicle in an ordinary situation has the duty to see to it that the
petitioner Alfredo Mallari Sr. collided with the delivery van of respondent Bulletin road is clear and not to proceed if he cannot do so in safety. When a motor vehicle
Publishing Corp. along the National Highway in Bataan. is approaching or rounding a curve, there is special necessity for keeping to the right
• The van of respondent BULLETIN was coming from the opposite direction. It was side of the road and the driver does not have the right to drive on the left hand side
driven by one Felix Angeles. The collision occurred after Mallari Jr. overtook the relying upon having time to turn to the right if a car approaching from the opposite
Fiera while negotiating a curve in the highway. The points of collision were the left direction comes into view.
rear portion of the passenger jeepney and the left front side of the delivery van of • Under Art. 2185 of the Civil Code, unless there is proof to the contrary, it is
BULLETIN. presumed that a person driving a motor vehicle has been negligent if at the time of
• The impact caused the jeepney to turn around and fall on its left side resulting in the mishap he was violating a traffic regulation. As found by the appellate court,
injuries to its passengers one of whom was Israel Reyes who eventually died. petitioners failed to present satisfactory evidence to overcome this legal
• Claudia G. Reyes, the widow of Israel M. Reyes, filed a complaint for damages presumption.
against Mallari Sr. and Mallari Jr., and also against BULLETIN, its driver Felix • The negligence and recklessness of the driver of the passenger jeepney is binding
Angeles, and the N.V. Netherlands Insurance Company. against petitioner Mallari Sr., who admittedly was the owner of the passenger
• TC found that the proximate cause of the collision was the negligence of Felix jeepney engaged as a common carrier, considering the fact that in an action based
Angeles, driver of the Bulletin delivery van, considering the fact that the left front on contract of carriage, the court need not make an express finding of fault or
portion of the delivery truck driven by Felix Angeles hit and bumped the left rear negligence on the part of the carrier in order to hold it responsible for the payment
portion of the passenger jeepney driven by Mallari Jr. Hence, it ordered BULLETIN of damages sought by the passenger.
and Felix Angeles to pay jointly and severally Claudia G. Reyes. It also dismissed the • Under Art. 1755 of the Civil Code, a common carrier is bound to carry the
complaint against the other defendants Mallari Sr. and Mallari Jr. passengers safely as far as human care and foresight can provide using the utmost
• CA modified the decision and found no negligence on the part of Angeles and of diligence of very cautious persons with due regard for all the circumstances.
his employer, respondent BULLETIN. Instead, it ruled that the collision was caused Moreover, under Art. 1756 of the Civil Code, in case of death or injuries to
by the sole negligence of petitioner Mallari Jr. who admitted that immediately before passengers, a common carrier is presumed to have been at fault or to have acted
the collision and after he rounded a curve on the highway, he overtook a Fiera negligently, unless it proves that it observed extraordinary diligence. Further,
which had stopped on his lane and that he had seen the van driven by Angeles pursuant to Art. 1759 of the same Code, it is liable for the death of or injuries to
before overtaking the Fiera. It also ordered petitioners Mallari Jr. and Mallari Sr. to passengers through the negligence or willful acts of the former’s employees. This
compensate Claudia G. Reyes. liability of the common carrier does not cease upon proof that it exercised all the
diligence of a good father of a family in the selection of its employees.
ISSUES & ARGUMENTS
• W/N CA erred in finding Mallari Jr. negligent and holding him liable. Petition denied. CA decision reversing TC decision is affirmed.
NO. CA is correct.
• Contrary to the allegation that there was no evidence whatsoever that petitioner
Mallari Jr. overtook a vehicle at a curve on the road at the time of or before the
accident, the same petitioner himself testified that such fact indeed did occur .
• CA correctly found, based on the sketch and spot report of the police authorities
which were not disputed by petitioners, that the collision occurred immediately after
petitioner Mallari Jr. overtook a vehicle in front of it while traversing a curve on the
highway. This act of overtaking was in clear violation of Sec. 41, pars. (a) and (b), of
RA 4136 as amended, otherwise known as The Land Transportation and Traffic TIN OCAMPO-TAN
Page 98 of 528
88 BLTB and Pon vs. IAC, Heirs of Paz. Heirs of Neri and Heirs of de Rosales| keeping to the right side of the road and the driver has not the right to drive on
Paras the left hand side relying upon having time to turn to the right if a car is
G.R. Nos. 74387-90 November 14, 1988 approaching from the opposite direction comes into view.
FACTS • As to the liability of the petitioners, Pon is primarily liable for his negligence in
• A bus owned by petitioner BLTB and driven by petitioner Pon collided with a bus driving recklessly the truck owned by BLTB. The liability of the BLTB itself is
owned by Superlines, when the former tried to overtake a car just as the Superlines' also primary, direct and immediate in view of the fact that the deat of or injuries
Bus was coming from the opposite direction. to its passengers was through the negligence of its employee.
• The collision resulted in the death of Rosales, Pamfilo and Neri, as well as injuries to • The common carrier's liability for the death of or injuries to its passengers is
the wife of Rosales, and Sales. These people were passengers of the petitioner's bus. based on its contractual obligation to carry its passengers safely to their
destination. They are presumed to have acted negligently unless they prove that
• Rosales and Sales, as well as the surviving heirs of Pamfilo, Rosales and Neri they have observed extaordinary diligence. In the case at bar, the appellants
instituted separate cases ih the CFI against BLTB and Superlines, together with their acted negligently.
drivers. Criminal cases against the drivers were also filed in a different CFI.
• BLTB is also solidarly liable with its driver even though the liability of the
• CFI ruled that only BLTB and Pon should be liable, and they were ordered jointly driver springs from quasi delict while that of the bus company from contract.
and severally to pay damages. On appeal, the IAC affirmed the CFI's ruling.
IAC decision affirmed. Respondents win.
• Petitioners contended that the CFI erred in ruling that the actions of private
respondents are based on culpa contractual, since if it were private respondents'
intention to file an action based on culap contractual, they could have done so by
merely impleading BLTB and Pon. Instead the respondents filed an action against all
defendants based on culpa aquiliana or tort.
ISSUES & ARGUMENTS

• WON erred in ruling that the actions of private respondents are based on
culpa contractual
•
IAC anchored its decision on both culpa contractual and culpa aquiliana
• The proximate cause of the death and injuries of the passengers was the
negligence of the bus driver Pon, who recklessly overtook a car despite
knowing that that the bend of highway he was negotiating on had a continuous
yellow line signifying a “no-overtaking” zone.
• It is presumed that a a person driving a motor vehicle has been negligent if at

the time of the mishap, he was violating any traffic regulation.
• In the instant case, the driver of the BLTB bus failed to act with diligence
demanded by the circumstances. Pon should have remembered that when a
motor vehicle is approaching or rounding a curve there is special necessity for SATURDAY ALCISO
Page 99 of 528
89 Manuel vs. Court of Appeals| Quiason backwards against the guard railing. If the purpose was to clear the road, all that was
G.R. No. 96781| October 1, 1993| 227 SCRA 29 done was to leave it where it was at the time of the collision, which was well inside its
assigned lane. Besides, even petitioners accept the fact that when the police arrived at the
FACTS scene of the accident, they found no one thereat (Rollo, p. 13). This further weakens the
• Private respondents were passengers of an International Harvester Scout Car possibility that some persons moved the Scout car to rest on the guard railing.
(Scout Car) owned by respondent Ramos, which left Manila for Camarines The evidence with respect to the issue that Fernando Abcede, Jr. who was not duly
Norte in the morning of December 27, 1977 with respondent Fernando licensed, was the one driving the Scout car at the time of the accident, could not simply
Abcede, Sr. as the driver of the vehicle. exempt petitioner's liability because they were parties at fault for encroaching on the
• There was a drizzle at about 4:10 P.M. when the Scout car, which was then Scout car's lane
negotiating the zigzag road of Bo. Paraiso, Sta. Elena, Camarines Norte, was hit
on its left side by a bus. The bus was owned by petitioner Emiliano Manuel.
Due to the impact, the Scout car was thrown backwards against a protective
railing. Were it not for the railing, the Scout car would have fallen into a deep
ravine. All its ten occupants, which included four children were injured, seven
of the victims sustained serious physical injuries (Rollo, p. 28).
• Emiliano Manuel, the driver of the bus, was prosecuted for multiple physical
injuries through reckless imprudence in the Municipal Court of Sta. Elena,
Camarines Norte. As he could not be found after he ceased reporting for work
a few days following the incident, the private respondents filed the instant
action for damages based on quasi-delict.
• After trial, the court a quo rendered judgment against petitioners and Perla
Compania de Seguros, that covered the insurance of the bus. The court ordered
them to pay, jointly and severally, the amount of P49,954.86 in damages to
respondents.
• On appeal, the Court of Appeals, affirmed the decision of the trial court.
• Hence this petition
ISSUE & ARGUMENTS

W/N it was Fernando Abcede, Jr., driver of the Scout car, who was at fault. (Besides,
petitioners claim the Fernando Abcede, Jr., who was only 19-years old at the time of the
incident, did not have a driver's license)
NO.
The fact that the Scout car was found after the impact at rest against the guard railing
shows that it must have been hit and thrown backwards by the bus (Rollo, p. 103). The
physical evidence do not show that the Superlines Bus while traveling at high speed,
usurped a portion of the lane occupied by the Scout car before hitting it on its left side.
On collision, the impact due to the force exerted by a heavier and bigger passenger bus
on the smaller and lighter Scout car, heavily damaged the latter and threw it against the
guard railing.
Petitioner's contention that the Scout car must have been moved backwards is not only a
speculation but is contrary to human experience. There was no reason to move it JAVIN OMPOC
Page 100 of 528

90 Aguilar vs. Commercial Savings Bank| Quisumbing • Respondent’s contention of the ownership should be proved in court would make
G.R. No. 128705 June 29, 2001 way for a defendant easily evading liability by colluding with a 3rd person, or
transferring the car to an indefinite or insolvent person. The injured wouldn’t be
FACTS able to collect damages then.
• Conrado Aguilar Jr. was hit by a car registered in the name of Commercial Bank and • The registered owner may only just bring a suit against the true owner but it does
driven by Ferdinand Borja, its Asst. Vice Pres. not exempt him from liability. It serves as a penalty for not registering the change of
• Aguilar Jr, with companion Nestor Semella, was crossing the street, when the car ownership of the car.
overtook a jeepney and hit them. Aguilar was thrown upwards and hit the
windshield of the car which didn’t stop. Both victims were brought to the hospital
where Aguilar was proclaimed DOA.
• Aguilar Sr. brought a suit for damages against Borja and Commercial Bank in the
RTC of Makati. Borja didn’t file his answer within the reglamentary period and was
declared in default. Respondent bank admitted that the car was registered in its
name and petitioner’s counsel showed Borja’s negligence.
• RTC held both respondents liable. By Art. 2180 of NCC says that the negligence of
the employee is presumed to be that of the employer, whose liability is primary and
direct. Court also said that respondent bank failed to exercise due diligence in the
selection of its employees.
• Upon appeal to the CA, it ruled that it should be first established that Borja was
exercising his functions for the bank to be liable. CA reversed ruling insofar as the
bank is concerned by dismissing its liability.
• Aguilar Sr. appealed, hence this petition.
ISSUES & ARGUMENTS

• W/N the bank could be held liable being the registered owner of the car
Petitioner: Employer-employee relationship is immaterial for the registered owner
of the car may be held liable without regard to who was driving the car
Respondent: Borja already purchased the car from the bank. True ownership of the
car should be proved in the proceedings.
Commercial Bank is liable
• Under Article 2180 of the Civil Code, when the negligent employee commits the act
outside the actual performance of his assigned tasks or duties, the employer has no
vicarious liability. But according to established jurisprudence, registered owner of
any vehicle, even if not for public service, is primarily responsible to third persons
for deaths, injuries and damages it caused. This is true even if the vehicle is leased to
third persons.
• Car registration is for public policy, to allow for identification of the vehicle and its
operator in case of an accident. The means of detection may also act as a deterrent
from lax observance of the law and of the rules of conservative and safe operation.
MARICE PACHECO
Page 101 of 528

91 US vs. Crame | Moreland the country, he should have been on the left-hand side of the street. According to
G.R. No. 10181, March 2, 1915 | 30 SCRA 2 witnesses there was abundant room for him to drive on such side.
• There is no evidence which shows negligence on the part of Coombs. At the time
FACTS he was struck, he had a right to be where the law fully protected him from vehicles
• Mariano Crame, chauffeur of a motor vehicle, while driving along Calle Herran in traveling in the direction in which the accused was driving at the time of injury.
the city of Manila, knocked down, dragged, and ran over the body of George E. • There is no evidence to show that the soldier was drunk at the time of the accident.
Coombs, a private in the US army, who was then crossing the road, causing him And even if he were, mere intoxication is not negligence, nor does it establish a want
injuries, wounds, and bruises. Moreover, such injuries damaged his mental faculties of ordinary care. It is but a circumstance to be considered with the other evidence
and incapacitated him from further performance of his duties as a soldier. tending to prove negligence. If one’s conduct is characterized by a proper degree of
• Crame alleges that he was only going at about 10 miles per hour, and that since care and prudence, it is immaterial whether he is drunk or sober.
Coombs suddenly appeared in front of the car, he tried but failed to change the
course of the automobile so as to avoid hitting him. Judgment affirmed.
• The trial court convicted Crame of serious physical injuries by imprudencia temeraria,
on the ground that 1) he did not reduce his speed sufficiently, nor did he attempt to CARSON, J., dissenting:
stop to avoid an accident; 2) he did not sound his horn or whistle or use his voice to
call the attention of Coombs to notify him that he should stop and avoid being • Foot passengers owe some duty to themselves, and it is utterly unreasonable to
struck by the car; and 3) Crame was driving in the center, or a little to the right of require the driver of a car to run at so slow a speed that he will always be able to
the center of the street instead of on the left side thereof. bring the machine to a dead stop in time to avoid injury to any man under the
influence of liquor, who may suddenly step out into the middle of the street and in
front of the car.
ISSUES & ARGUMENTS • There is no evidence that Crame was driving on the extreme right hand of the street.
• W/N Crame is criminally liable for the damages caused to Coombs. Rather, he was a little right to the center. The accused offered a very reasonable
o <Petitioner’s Arguments>: A carromata was approaching him, and explanation for this. While the rule of the road imposes a general duty upon drivers
obscured his vision just before the accident occurred. Also, the rails of the to keep on the left when passing other vehicles and in densely crowded streets, there
street-car track made it difficult to pass the extreme left-hand side of the is no rule requiring him to keep on the extreme left without regard to the condition
street. of the road or street, and to the presence/absence of other vehicles or pedestrians
on the highway.
HOLDING & RATIO DECIDENDI • Where the street is more or less deserted, no danger of collision, the proper place on
the road for a fast and moderately fast vehicle is well toward the canter, provided
THE CONCLUSIONS OF THE TRIAL COURT ARE MORE THAN that the driver is at all times prepared to move to the left to avoid collisions.
SUSTAINED. • The rights and duties of pedestrians and drivers of vehicles are equal. Each may use
• The fact that Crame did not see Coombs until the car was very close to him is the highway, and each must exercise such care and prudence as the circumstances
strong evidence of inattention to duty, especially since the street was wide and demand.
unobstructed, with no buildings on either side from which a person can dart out so • The rule of the road is a rule of negligence, and the fact that a person was on the
suddenly. Moreover, the street was also well-lighted, so there is no reason why wrong side of the road when the collision took place does not per se make him
Crame did not see Coombs long before he had reached the position in the street liable for damages.
where he was struck down.
• The presence of the carromata was not corroborated by any of the witnesses.
Moreover, it would have obscured his vision only for a moment. Besides, it is the
duty of automobile drivers in meeting a moving vehicle on public streets and
highways to use due care and diligence to see to it that persons who may be crossing
behind the moving vehicle are not run down by them.
• It is clearly established that Crame was driving along the right-hand side of the street
when the accident happened. According to the law of the road and the custom of
CHRISSIE MORAL
Page 102 of 528

92 SPS Marcial & JuanaCaedo & Minor children: Ephraim, Eileen and Rose BUT, owner, Yu Khe Thai is not solidarily liable with his driver.
Caedo v Yu Khe Thai and Rafael Bernardo| Makalintal
No. L-20392 December 18, 1968 |26 SCRA 410 • Art 21841 is indeed the basis of a master’s liability in a vehicular accident.
• Note however that the 2nd sentence of Art 2184 qualifies before the owner can
FACTS be made solidarity liable with the negligent driver. This is because the basis of
• Marcial Caedo with his wife, son and 3 daughters left the house early morning of the master’s liability is not RESPONDEAT SUPERIOR but rather the relation
March 24 1958 to bring drive his son to the airport who was leaving for Mindoro. ship of PATERFAMILIAS. The theory is that, the negligence of the servant, is
About 530, driving a Mercury car, they were traveling along Highway 54 (now known to the master and susceptible of timely correction by him, reflects the
EDSA) within the area of San Lorenzo Village when a Cadillac coming from the master’s negligence if he fails to correct it order to prevent injury or damage.
opposite direction collided to their vehicle. • Test of imputed negligence in Art 2184 is necessarily subjective. Car owners are
• Rafael Bernardo was driving the Cadillac, while owner, Yu Khe Thait was his not held in a uniform and inflexible standard of diligence as are professional
passenger (for recit purposes: they came from Parañaque, going to Wack Wack to drivers. The law does not require that a person must possess a certain measure
play for the owner’s regular round of golf). of skill or proficiency either in mechanics of driving or in the observance of
• WHAT HAPPENED? Bernardo testified that: traffic rules before he can own a motor vehicle.
o they were already about 8m away from the carretela driven by Pedro Bautista • PROOF OF DUE DILIGENCE of Yu Khe Thai:
and his son when they noticed them despite the carretela being lighted on both o Bernardo has been his driver since 1937 and until this incident, he has
sides. That should have been sufficient warning to take the necessary not committed a traffic violation. Bernardo was an experienced driver
precaution (SIGN OF DRIVER’S NEGLIGENCE). for 10 years with Yutivo Sons Hardware prior to his service to Yu.
o Instead of slowing down, he overtook the carretela, by eating the opposite lane Thus, he had reason to believe in the capacity of Bernardo.
by veering to the left. As he did so, the curved end of his car’s right rear o Their car was running at a reasonable speed, thus no reason for the
bumper caught forward the rig’s left wheel, wrenching it off and carrying it owner to be alarmed.
along as the car skidded obliquely to the other lane, then colliding with the o He saw the carretela about 12m away, but he could not have
oncoming vehicle anticipated Bernardo’s sudden decision to overtake the carretela.
• Note that both vehicles were traveling at a fairly moderate speed before collision. o The time element before collision was so short that it would have
Caedo even slackened his speed when he saw the carretela and the Cadillac. Caedo been impossible for him to have reasonable opportunity to prevent it.
figured the Cadillac would wait behind but Bernardo took a gamble and squeezed in He even said that sounding a sudden warning to the driver would only
the Cadillac, but his calculation fell short resulting to the collision. Caedo tried to make the driver nervous and make the situation worse (I agree. Isipin
avoid collision; photographs even confirm that the Mercury was already on the mo, yun Nanay mo, biglang hysterically sisigaw, Annnnnak, sa kanan! Tapos
unpaved right shoulder of the road upon impact. sumobra ka ng kabig sa gulat. hasslehoff!!! But true.)
• Petitioners suffered multiple injuries and had to undergo medical treatment. They o Taken altogether, due diligence required from Yu to avoid misfortune
prayed for damages (including damage to car). exists, thus he should not be held liable for the negligence, and the
• TC: owner and driver solidarily liable to pay actual, moral, exemplary damages and resulting damages caused by Bernardo.
atty’s fees. CA: affrm/modify increased actual damages, to cover the damage
sustained by their car. Judgment modified. Affirm moral damages granted by TC to petitioners. Actual
damages cannot be raised since only the petitioners’ medical expenses were supported
ISSUES & ARGUMENTS by evidence. Yu Khe Thai is free from liability, but decision is otherwise affirmed
o W/N Bernardo is liable? with respect to BERNARDO
o If Yes to ISSUE 1, W/N Yu Khe Thai is solidarily liable with
Bernardo?
DIANE LIPANA
1
YES! Bernardo is liable, because facts reveal that the collision was directly In a motor vehicle mishaps, the owner is solidarily liable with his driver, if the former, who was in the vehicle
could have, by the use of due diligence, prevented the misfortune. It is disputably presumed that a driver was
traceable to his negligence. negligent, of he had been found guilty of reckless driving or violating traffic regulations at least twice within the
next preceding two months.
Page 103 of 528
93 FGU Insurance vs. CA|Bellosillo motor vehicle, the provisions of article 2180 are applicable." Obviously, this
G.R. No. 118889, March 23, 1998 | 287 SCRA 718 provision of Art. 2184 is neither applicable because of the absence of master-driver
relationship between respondent FILCAR and Dahl-Jensen. Clearly, petitioner has
FACTS no cause of action against respondent FILCAR on the basis of quasi-delict; logically,
• On 21 April 1987, two Mitsubishi Colt Lancers collided along EDSA at around its claim against respondent FORTUNE can neither prosper.
3AM. At that time, the car owned by Soriano was being driven by Jacildone. The • Article 2180, par 5 Civil Code: “… Employers shall be liable for the damages
other car was owned by FILCAR Transport, Inc. and was being driven by Dahl- caused by their employees and household helpers acting within the scope of their
Jansen, as lessee. Said Dahl-Jensen, being a Danish tourist, did not have Philippine assigned tasks, even though the former are not engaged in any business or
driver’s license. Dahl-Jensen had swerved to his right lane, thereby hitting the left industry.… ”
side of the car of Soriano. • The liability imposed by Art. 2180 arises by virtue of a presumption juris tantum of
• Petitioner FGU Insurance paid Soriano P25,382.20 pursuant to the insurance negligence on the part of the persons made responsible thereunder, derived from
contract it had with the latter. After which, it sued Dahl-Jensen, FILCAR, and their failure to exercise due care and vigilance over the acts of subordinates to
FORTUNE Insurance for quasi-delict before the RTC of Makati. prevent them from causing damage. 7 Yet, Art. 2180 is hardly applicable because
• Summons was not served on Dahl-Jensen; and upon motion of the petitioner, he FILCAR, being engaged in a rent-a-car business was only the owner of the car
was later dropped from the complaint. The RTC dismissed the complaint on the leased to Dahl-Jensen. As such, there was no vinculum juris between them as
ground that petitioner had failed to substantiate its claim for subrogation. employer and employee.
• The CA affirmed the RTC decision, although on a different ground, i.e. that only Petition denied. CA affirmed.
Hence this appeal.
ISSUES & ARGUMENTS
W/N FILCAR and FORTUNE are liable for damages suffered by a third person
even though the vehicle was leased to another.
FILCAR AND FORTUNE ARE NOT LIABLE. (please focus on the underlined
doctrines for: our concern for this case is PRIMARY LIABILITY)
..."
• Art. 2184 of the NCC provides: "In motor vehicle mishap, the owner is solidarily
liable with his driver, if the former, who was in the vehicle, could have by the
use of due diligence, prevented the misfortune . . . . If the owner was not in the CHRISSIE MORAL
Page 104 of 528

94 DSR-Senator Lines vs. Federal Phoenix Assurance Co., Inc. | Respondent Federal Phoenix Assurance raised the presumption of negligence
G.R. No. 135377. October 7, 2003 | against petitioners. However, they failed to overcome it by sufficient proof of
extraordinary diligence.
FACTS
• Berde Plants delivered 632 units of artificial trees to C.F. Sharp, the General Ship
Agent of DSR-Senator Lines. The Cargo was loaded in M/S Arabian Senator.
• Federal Phoenix Assurance insured the cargo against all risks in the amount of
P941,429.61
• Arabian Senator left Manila for Saudi Arabia with the cargo on board. When the
vessel arrived in Khor Fakkan Port, it was reloaded on board DSR-Senator Lines’
feeder vessel, M/V Kapitan Sakharov. However, while in transit, the vessel and all
its cargo caught on fire. DSR lines informed Berde Plants regarding the incident.
Then, CF Sharp issued a certification to that effect.
• Federal Phoenix Assurance paid Berde Plants P941,429.61 corresponding to the
amount of insurance for the cargo. In turn, Berde Plants executed in its favor a
subrogation receipt.
• Federal Phoenix Assurance sent a letter to CF Sharp demanding the amount of
P941,429,61 on the basis of the subrogation receipt. CF Sharp denied any liability on
the ground that such liability was extinguished when the vessel carrying the cargo
was gutted by the fire. Federal Phoenix Assurance filed with the RTC a complaint
for damages against CF Sharp and DSR lines.
ISSUES & ARGUMENTS

• W/N DSR-Senator lines and C.F. Sharp are liable for the damages.
They are liable for the damages caused by the fire

Article 1734 of the Civil Code provides:
Common carriers are responsible for the loss, destruction, or deterioration of the goods,
unless the same is due to any of the following causes only:
(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.”
Fire is not one of those enumerated under the above provision which exempts a carrier
from liability for loss or destruction of the cargo.
Common carriers are obliged to observe extraordinary diligence in the vigilance
over the goods transported by them. Accordingly, they are presumed to have been at
fault or to have acted negligently if the goods are lost, destroyed or deteriorated. There
are very few instances when the presumption of negligence does not attach and these
instances are enumerated in Article 1734. In those cases where the presumption is
applied, the common carrier must prove that it exercised extraordinary diligence in order
to overcome the presumption VP PADILLA
Page 105 of 528

95 Delsan Transport Lines Inc. v C&A Construction | Ynares-Santiago.
G.R. No. 156034, October 1, 2003 |
FACTS
• NHA contracted with C&A to build a deflector wall for Vitas Reclamation Area in
Vitas, Tondo. Project was finished in 1994. In October 20, 1994 12mn Captain
Jusep of Delsan lines owned ship M/V Delsan express received information that
there was a typhoon coming in from Japan. At 8.35AM M/V Delsan Express
attempted to get into North Harbor but could not. 10.00AM M/V Delsan Express
dropped anchor off of Vitas 4 miles away from Napocor barge. M/V Delsan
Express nearly collided with the Napocor barge but managed to avoid it and instead
hit the deflector wall causing almost 500,000 in damage. Petitioner refused to pay
and thus a civil case was filed against Delsan by C&A. TC Ruled emergency rule
applied, CA found captain negligent.
ISSUES & ARGUMENTS

• W/N Captain Jusep is negligent
• W/N under Art. 2180 Delsan liable for the quasi-delict
Captain Jusep is negligent by waiting for 8.35AM before bringing the ship to
North Harbor
Petitioners are vicariously liable under 2180
• Art. 2176 of the Civil Code states that whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done.
Captain Jusep received the report 12MN and waited for more than 8 hours to move
the ship, he likewise ignored the weather report and in all angles failed to take action
to prevent the damage.
• Under Art. 2180 whenever an employee’s negligence causes damage or injury to
another there arises a presumption juris tantum that the employer failed to exercise
due diligence of a good father of a family in the selection and supervision of its
employees.
• Petitioner failed to present evidence that showed it formulated guidelines/rules for
the proper performance of functions of employees and any monitoring system.
• Not necessary to state petitioner is negligent in selecting or supervising employees as
negligence is presumed by operation of law. Allegations of negligence of the
employee and existence of employer-employee relationship in complaint are enough
to make out a case of quasi-delict under 2180.
CHRIS PALARCA
Page 106 of 528

96 Singapore Airlines vs. Fernandez that he be transported on that flight and on that date. If he does not, then the carrier
opens itself to a suit for a breach of contract of carriage.
FACTS
The contract of air carriage is a peculiar one. Imbued with public interest, the law
Andion Fernandez is an acclaimed soprano here in the Philippines and abroad. At requires common carriers to carry the passengers safely as far as human care and
the time of the incident, she was availing an educational grant from the Federal Republic foresight can provide, using the utmost diligence of very cautious persons with due
of Germany, pursuing a Master’s Degree in Music majoring in Voice. regard for all the circumstances. In an action for breach of contract of carriage, the
aggrieved party does not have to prove that the common carrier was at fault or was
She was invited to sing before the King and Queen of Malaysia on February 3 and negligent. All that is necessary to prove is the existence of the contract and the fact of its
4, 1991. For this singing engagement, an airline passage ticket was purchased from non-performance by the carrier.
petitioner Singapore Airlines which would transport her to Manila from Frankfurt,
Germany on January 28, 1991. From Manila, she would proceed to Malaysia on the The defense that the delay was due to fortuitous events and beyond petitioner’s control
next day. It was necessary for the respondent to pass by Manila in order to gather her is unavailing.
wardrobe; and to rehearse and coordinate with her pianist her repertoire for the aforesaid
performance. Petitioner was not without recourse to enable it to fulfill its obligation to transport the
respondent safely as scheduled as far as human care and foresight can provide to her
Flight No. SQ 27 left Frankfurt but arrived in Singapore two hours late or at about destination. Tagged as a premiere airline as it claims to be and with the complexities of
11:00 in the morning of January 28, 1991. By then, the aircraft bound for Manila had air travel, it was certainly well-equipped to be able to foresee and deal with such
left as scheduled, leaving the respondent and about 25 other passengers stranded in the situation. The petitioner’s indifference and negligence by its absence and insensitivity
Changi Airport in Singapore. was exposed by the trial court.
The respondent never made it to Manila and was forced to take a direct flight from When a passenger contracts for a specific flight, he has a purpose in making that
Singapore to Malaysia on January 29, 1991, through the efforts of her mother and travel choice which must be respected. This choice, once exercised, must not be impaired by a
agency in Manila. Her mother also had to travel to Malaysia bringing with her breach on the part of the airline without the latter incurring any liability. For petitioner’s
respondent’s wardrobe and personal things needed for the performance that caused failure to bring the respondent to her destination, as scheduled, we find the petitioner
them to incur an expense of about P50,000. clearly liable for the breach of its contract of carriage with the respondent.
As a result of this incident, the respondent’s performance before the Royal Family The petitioner acted in bad faith. Bad faith means a breach of known duty through
of Malaysia was below par. Because of the rude and unkind treatment she received from some motive of interest or ill will..
the petitioner’s personnel in Singapore, the respondent was engulfed with fear, anxiety,
humiliation and embarrassment causing her to suffer mental fatigue and skin rashes. She
was thereby compelled to seek immediate medical attention upon her return to Manila
for “acute urticaria.” Fernandez then filed a civil action for damages against Singapore
Airlines.
ISSUE & ARGUMENTS
Whether or not Singapore is liable for damages?
HOLDING & RATION DECIDENDI

YES.
When an airline issues a ticket to a passenger, confirmed for a particular flight on a

certain date, a contract of carriage arises. The passenger then has every right to expect BYRON PEREZ
Page 107 of 528

97 Smith Bell and Company v CA | Feliciano consequences arising from the failure of the "Don Carlos" to keep a "proper
G.R. No. L-56294, May 20, 1991 | look-out" must be borne by the "Don Carlos."
• The third factor constitutive of negligence on the part of the "Don Carlos"
FACTS relates to the fact that Second Mate Benito German was, immediately before
• In the early morning of 3 May 1970—at exactly 0350 hours, on the approaches to and during the collision, in command of the "Don Carlos."
the port of Manila near Caballo Island, a collision took place between the M/V • Second Mate German simply did not have the level of experience, judgment and
"Don Carlos," an inter-island vessel owned and operated by private respondent skill essential for recognizing and coping with the risk of collision as it presented
Carlos A. Go Thong and Company ("Go Thong"), and the M/S "Yotai Maru," a itself that early morning when the "Don Carlos," running at maximum speed and
merchant vessel of Japanese registry. having just overtaken the "Don Francisco" then approximately one mile behind to
• The "Don Carlos" was then sailing south bound leaving the port of Manila for the starboard side of the "Don Carlos," found itself head-on or nearly head on vis-a-vis
Cebu, while the "Yotai Maru" was approaching the port of Manila, coming in from the "Yotai Maru. " It is essential to point out that this situation was created by the
Kobe, Japan. "Don Carlos" itself.
• The bow of the "Don Carlos" rammed the portside (left side) of the "Yotai Maru"
inflicting a three (3) cm. gaping hole on her portside near Hatch No. 3, through
which seawater rushed in and flooded that hatch and her bottom tanks, damaging all
the cargo stowed therein.
• The consignees of the damaged cargo got paid by their insurance companies. The
insurance companies in turn, having been subrogated to the interests of the
consignees of the damaged cargo, commenced actions against private respondent
Go Thong for damages sustained by the various shipments.
• 2 Civil Cases were filed against Go Thong. In Case No.1, the SC ruled through JBL
Reyes that the "Don Carlos" to have been negligent rather than the "Yotai Maru”.
This was contrary to the findings of the CA.
• This is Case No. 2. The parties agreed that the cases be tried under the same issues
and that the evidence presented in one case would be simply adopted in the other.
ISSUES & ARGUMENTS
W/N Don Carlos is the proximate cause of the collision.
"Don Carlos" had been negligent and that its negligence was the sole proximate
cause of the collision and of the resulting damages.
Three factors were considered in determining who the proximate cause is:
The first of these factors was the failure of the "Don Carlos" to comply with the
requirements of Rule 18 (a) of the International Rules of the Road
This has something to do with foresight and safety measure which the captain should
observe another ship is approaching.
• The second circumstance constitutive of negligence on the part of the "Don

Carlos" was its failure to have on board that night a "proper look-out" as
required by Rule I (B) Under Rule 29 of the same set of Rules, all JON LINA
Page 108 of 528

98 Rakes v. Atlantic, Gulf and Pacific Co. | Tracey
Januray 23, 1907
FACTS
• Plaintiff Rakes was one of the laborers of defendant, transporting iron rails
from the barge in the harbor to defendant’s yard. Piled lengthwise on 2 hand
cars were 7 rails such that the ends of the rails protruded beyond the cars. The
rails lay upon 2 crosspieces or sills secured to the cars but without side guards
to prevent them from slipping off. Near the water’s edge, the tracks sagged, the
tie broke, the rails slid off and caught plaintiff, resulting in a broken leg which
was subsequently amputated.
• Plaintiff alleges that defendant was negligent in not provided side guards on the
cars, and that the tracks had no fishplates. Defendant admitted absence of side
guards and failed to effectively overcome the plaintiff’s proof that no fishplates
existed.
• The sagging of the tracks was found to have been caused by the water of the
bay raised by a recent typhoon. It wasn’t proved that the company inspected
the track after the typhoon or that it had any proper system of inspecting.
ISSUE & ARGUMENTS
W/N plaintiff was guilty of contributory negligence to exonerate defendant from

liability.

No.
• The allegation that plaintiff was at fault for continuing his work despite notice
of the sagging of the track constituted contributory negligence that exonerate
defendant is untenable. Nothing in the evidence shows that plaintiff did or
could see the displaced timber underneath. Plaintiff had worked on the job for
less than two days.
• Where plaintiff contributed to the principal occurrence, as one of the
determining factors, he cannot recover. Where, in conjunction with the
occurrence, he contributes only to his own injury, he may recover the amount
that the defendant responsible for the event should pay for such injury, less the
sum deemed a suitable equivalent for his own imprudence.
AYEN QUA
Page 109 of 528

99 Taylor vs. Manila Electric| Paras office, learning mechanical drawing and mechanical engineering. About a
G.R. No. L-4977 March 22,1910| 16 Phil.8 month after his accident he obtained employment as a mechanical draftsman
and continued in that employment for six months at a salary of P2.50 a day; and
FACTS it appears that he was a boy of more than average intelligence, taller and more
• The plaintiff, David Taylor, was at the time when he received the injuries mature both mentally and physically than most boys of fifteen.
complained of, 15 years of age, the son of a mechanical engineer, more mature ISSUE & ARGUMENTS
than the average boy of his age, and having considerable aptitude and training
in mechanics. W/N Manila Electric is liable for damages to the petitioners
• On the 30th of September, 1905, plaintiff, with a boy named Manuel Claparols,
about 12 years of age, crossed the footbridge to the Isla del Provisor, for the HOLDING & RATIO DECIDENDI
purpose of visiting one Murphy, an employee of the defendant, who and • No.The immediate cause of the explosion, the accident which resulted in
promised to make them a cylinder for a miniature engine. Finding on inquiry plaintiff's injury, was in his own act in putting a match to the contents of the
that Mr. Murphy was not in his quarters, the boys, impelled apparently by cap, and that having "contributed to the principal occurrence, as one of its
youthful curiosity and perhaps by the unusual interest which both seem to have determining factors, he can not recover."
taken in machinery, spent some time in wandering about the company's • In the case at bar, plaintiff at the time of the accident was a well-grown youth
premises. The visit was made on a Sunday afternoon, and it does not appear of 15, more mature both mentally and physically than the average boy of his
that they saw or spoke to anyone after leaving the power house where they had age; he had been to sea as a cabin boy; was able to earn P2.50 a day as a
asked for Mr. Murphy. mechanical draftsman thirty days after the injury was incurred; and the record
• They walked across the open space in the neighborhood of the place where the discloses throughout that he was exceptionally well qualified to take care of
company dumped in the cinders and ashes from its furnaces. Here they found himself. The evidence of record leaves no room for doubt that, despite his
some twenty or thirty brass fulminating caps scattered on the ground. These denials on the witness stand, he well knew the explosive character of the cap
caps are approximately of the size and appearance of small pistol cartridges and with which he was amusing himself. The series of experiments made by him in
each has attached to it two long thin wires by means of which it may be his attempt to produce an explosion, as described by the little girl who was
discharged by the use of electricity. They are intended for use in the explosion present, admit of no other explanation. His attempt to discharge the cap by the
of blasting charges of dynamite, and have in themselves a considerable use of electricity, followed by his efforts to explode it with a stone or a
explosive power. After some discussion as to the ownership of the caps, and hammer, and the final success of his endeavors brought about by the
their right to take them, the boys picked up all they could find, hung them on application of a match to the contents of the caps, show clearly that he knew
stick, of which each took end, and carried them home. what he was about. Nor can there be any reasonable doubt that he had reason
• After crossing the footbridge, they met a little girl named Jessie Adrian, less to anticipate that the explosion might be dangerous, in view of the fact that the
than 9 years old, and all three went to the home of the boy Manuel. The boys little girl, 9 years of age, who was within him at the time when he put the match
then made a series of experiments with the caps. They trust the ends of the to the contents of the cap, became frightened and ran away.
wires into an electric light socket and obtained no result. They next tried to • True, he may not have known and probably did not know the precise nature of
break the cap with a stone and failed. Manuel looked for a hammer, but could the explosion which might be expected from the ignition of the contents of the
not find one. Then they opened one of the caps with a knife, and finding that it cap, and of course he did not anticipate the resultant injuries which he incurred;
was filled with a yellowish substance they got matches, and David held the cap but he well knew that a more or less dangerous explosion might be expected
while Manuel applied a lighted match to the contents. An explosion followed, from his act, and yet he willfully, recklessly, and knowingly produced the
causing more or less serious injuries to all three. Jessie, who when the boys explosion. It would be going far to say that "according to his maturity and
proposed putting a match to the contents of the cap, became frightened and capacity" he exercised such and "care and caution" as might reasonably be
started to run away, received a slight cut in the neck. Manuel had his hand required of him, or that defendant or anyone else should be held civilly
burned and wounded, and David was struck in the face by several particles of responsible for injuries incurred by him under such circumstances.
the metal capsule, one of which injured his right eye to such an extent as to the • The law fixes no arbitrary age at which a minor can be said to have the
necessitate its removal by the surgeons who were called in to care for his necessary capacity to understand and appreciate the nature and consequences of
wounds. his own acts, so as to make it negligence on his part to fail to exercise due care
• Two years before the accident, plaintiff spent four months at sea, as a cabin boy and precaution in the commission of such acts; and indeed it would be
on one of the interisland transports. Later he took up work in his father's impracticable and perhaps impossible so to do, for in the very nature of things
Page 110 of 528
the question of negligence necessarily depends on the ability of the minor to
understand the character of his own acts and their consequences; and the age at
which a minor can be said to have such ability will necessarily depends of his
own acts and their consequences; and at the age at which a minor can be said to
have such ability will necessarily vary in accordance with the varying nature of
the infinite variety of acts which may be done by him.
DEANNE REYES
Page 111 of 528

bridge dentures.
damages awarded.
ISSUES & ARGUMENTS
notwithstanding the allegation that the latter had no curfew pass and thus drove
speedily with his headlights off?
Page 112 of 528

101 LBC Air Cargo vs. CA
FACTS
A certain Rogelio Monterola was riding his motorcycle along a dusty road when
it collided with a cargo van owned by LBC Air Cargo driven by Jaime Tano Jr. coming
from an opposite direction. On board the van was manager of LBC and his son. The van
originally gave way to two almost-racing cars which clouded the way of Tano, who then,
not waiting for the dustiness to subside turned sudden at the sharp curve causing the
mishap with the motorcycle, killing Monterola. Heirs of the latter filed for Homicide
through reckless imprudence and damages were sought from LBC, the driver and the
manager.
ISSUE & ARGUMENTS

Whether LBC, Tano and the Manager are liable for damages.

Yes. But the manager is not, there being no employer-employee relationship
between him and the driver. The proximate cause of the incident was Tano’s negligence
of not letting the dustiness subside and suddenly turning in the curve. LBC is liable as
employer to Tano. However Monterola contributed to the negligence because he was
driving speedily and too closely behind the vehicle he was following hence damages are
reduced by 20%.
JOY ADRANEDA
Page 113 of 528

102 Jarco Marketing Corp vs. CA and Aguilars | Villa-Real TRAGEDY, WHICH BEFELL ZHIENETH WAS NO ACCIDENT AND
GR. No.- 129792, December 21, 1999 | 321 SCRA 375 THAT HER HEATH COULD ONLY BE ATTRIBUTED TO NEGLIGENCE.
• Accident and negligence are intrinsically contradictory; one cannot exist with the
FACTS other. Accident occurs when the person concerned is exercising ordinary care,
• Petitioner Jarco Marketing Corp is the owner of Syvel’s Department Store. which is not caused by fault of any person and which could not have been
Petitioners Kong, Tiope and Panelo are the store’s branch manager, operations prevented by any means suggested by common prudence.
manager and supervisor, respectively. Private respondents are spouses and the • The test in determining the existence of negligence is enunciated in Picart vs. Smith,
parents of Zhieneth Aguilar. thus: Did the defendant in doing the alleged negligent act use that reasonable care and caution
• Criselda (mom) and Zhieneth were at the 2nd floor of Syvel’s Department Store. which an ordinarily prudent person would have used in the same situation? If not, then he is guilty
Criselda was signing her credit card slip at the payment and verification counter of negligence.
when she felt a sudden gust of wind and heard a loud thud. She looked behind her
and saw her daughter on the floor, her young body pinned by the bulk of the store’s PETITIONER NEGLIGENT.
gift-wrapping counter/structure. Zhieneth was crying and screaming for help. • According to the testimony of Gerardo Gonzales, a former gift-wrapper, who was at
• With the assistance of people around, Zhieneth was retrieved and rushed to the the scene of the incident: While in the emergency room the doctor asked the child
Makati Med where she was operated on. The next day, she lost her speech and 13 what did you do to which the child replied nothing, I did not come near the counter and the
days thereafter, passed away. counter just fell on me.
• After the burial of Zhieneth, her parents demanded reimbursment of the • Moreover, Ramon Guevarra, another former employee, testified to the effect that
hospitalization, medical bills and wake and funeral expenses, which they had the counter needed some nailing because it was shaky, but that it was not attended
incurred from petitioners. Upon petitioners’ refusal, the parents filed a complaint to.
for damages. • Undoubtedly, petitioner Panelo and another store supervisor knew the danger of the
• Trial court absolved petitioners. It ruled that the proximate cause of the fall of the unstable counter yet did not remedy the situation.
counter on Zhieneth was her act of clinging to it. Furthermore, Criselda’s negligence • Anent the negligence imputed to Zhieneth, the conclusive presumption that favors
contributed to her daughter’s accident. Basically, the court reasoned that the counter children below 9 years old in that they are incapable of contributory negligence,
was situated at the end or corner of the 2nd floor as a precautionary measure and applies (criminal cases- conclusively presumed to have acted without discernment).
hence it could not be considered as an attractive nuisance. The court added that the • Assuming Zhieneth committed contributory negligence when she climbed the
counter has been in existence for 15 years and its structure safe and well-balanced. counter, no injury should have occurred if petitioners theory that the counter was
• Court of Appeals reversed. It found that the petitioners were negligent in stable and sturdy was true. Indeed, the physical analysis of the counter reveal
maintaining a structurally dangerous counter. (The counter was shaped like an otherwise, i.e. it was not durable after all.
inverted L with a top wider than the base. It was top heavy and the weight of the • Criselda should likewise be absolved from contributory negligence. To be able to
upper portion was neither evenly distributed nor supported by its narrow base. Thus sign her credit card, it was reasonable for Criselda to momentarily release her child’s
the counter was defective, unstable and dangerous.) Moreover, Zhieneth who was hand.
below 7 years old at the time of the incident was absolutely incapable of negligence
since a child under 9 could not be held liable even for an intentional wrong. Petition DENIED. Court of Appeals’ decision AFFIRMED.
ISSUES & ARGUMENTS
• W/N death of Zhieneth was accidental or attributable to negligence.

• In case of a finding of negligence, whether attributable to private
respondents for maintaining a defective counter or to Criselda and Zhieneth
for failing to exercise due and reasonable care while inside the store
premises.

DANI BOLONG
Page 114 of 528

103 Illusorio vs. CA| Quisimbing MBC:
G.R. No. 139130 November 27, 2002 |SCRA o Section 23 of the Negotiable Instruments Law is inapplicable, considering that
the fact of forgery was never proven.
FACTS o The bank negates Illusorio’s claim of estoppel.
o Petitioner Ramon Illusorio is a prominent businessman who was the
Managing Director of Multinational Investment Bancorporation and the HOLDING & RATIO DECIDENDI
Chairman and/or President of several other corporations. He was a depositor
in good standing of respondent bank, the Manila Banking Corporation 1.) No. Illusorio does not have a cause of action against MBC.
(MBC).
o As he was then running about 20 corporations, and was going out of the o To be entitled to damages, Illusorio has the burden of proving negligence on
country a number of times, Illusorio entrusted to his secretary, Katherine E. the part of MBC for failure to detect the discrepancy in the signatures on the
Eugenio, his credit cards and his checkbook with blank checks. It was also checks. It is incumbent upon Illusorio to establish the fact of forgery.
Eugenio who verified and reconciled the statements of said checking account. Curiously though, he failed to submit additional specimen signatures as
o Between the dates September 5, 1980 and January 23, 1981, Eugenio was able requested by the NBI from which to draw a conclusive finding regarding
to encash and deposit to her personal account about seventeen (17) checks forgery.
drawn against the account of the Illusorio at the MBC, with an aggregate o Illusorio’s contention that MBC was remiss in the exercise of its duty as
amount of P119,634.34. Illusorio did not bother to check his statement of drawee lacks factual basis. Consistently, the CA and the RTC found that MBC
account until a business partner apprised him that he saw Eugenio use his exercised due diligence in cashing the checks.
credit cards. o Of course it is possible that the verifiers of MBC might have made a mistake in
o Illusorio fired Eugenio immediately, and instituted a criminal action against her failing to detect any forgery -- if indeed there was. However, a mistake is not
for estafa thru falsification before the Office of the Provincial Fiscal of Rizal. equivalent to negligence if they were honest mistakes and all precautions were
MBC, through an affidavit executed by its employee, Mr. Dante Razon, also taken.
lodged a complaint for estafa thru falsification of commercial documents o It was Illusorio, not MBC, who was negligent2. In the present case, it
against Eugenio on the basis of petitioner’s statement that his signatures in the appears that Illusorio accorded his secretary unusual degree of trust and
checks were forged. unrestricted access to his credit cards, passbooks, check books, bank
o Illusorio then requested the MBC to credit back and restore to its account the statements, including custody and possession of cancelled checks and
value of the checks which were wrongfully encashed but MBC refused. reconciliation of accounts. What is worse, whenever the bank verifiers call the
o TC and CA ruled in favor of MBC. office of Illusorio, it is the same secretary who answers and confirms the
checks. Moreover, while the bank was sending him the monthly Statements of
ISSUES & ARGUMENTS Accounts, he was not personally checking the same
W/N Illusorio has a cause of action against MBC. o Illusorio’s failure to examine his bank statements appears as the
W/N MBC, in filing an estafa case against Eugenio, is barred from raising the defense proximate cause of his own damage3. Illusorio had sufficient opportunity to
that the fact of forgery was not established. prevent or detect any misappropriation by his secretary had he only reviewed
the status of his accounts based on the bank statements sent to him regularly.
Illusorio: In view of Article 2179 of the New Civil Code, when the plaintiff’s own
o MBC is liable for damages for its negligence in failing to detect the discrepant negligence was the immediate and proximate cause of his injury, no recovery
checks. He adds that as a general rule a bank which has obtained possession of could be had for damages.
a check upon an unauthorized or forged endorsement of the payee’s signature o Illusorio further contends that under Section 23 of the Negotiable Instruments
and which collects the amount of the check from the drawee is liable for the Law a forged check is inoperative, and that MBC had no authority to pay the
proceeds thereof to the payee. forged checks. However, Illusorio is precluded from setting up the forgery,
o Illusorio invokes the doctrine of estoppel, saying that having itself instituted a
forgery case against Eugenio, MBC is now estopped from asserting that the 2 Negligence is the omission to do something which a reasonable man, guided by those considerations which
fact of forgery was never proven. ordinarily regulate the conduct of human affairs, would do, or the doing of something which a prudent and
reasonable man would do.
3 Proximate cause is that cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, and without which the result would not have occurred.
Page 115 of 528
assuming there is forgery, due to his own negligence in entrusting to his
secretary his credit cards and checkbook including the verification of his
statements of account.
2.) No. The fact that MBC had filed a case for estafa against Eugenio would not estop it
from asserting the fact that forgery has not been clearly established.
o In a criminal action, the State is the plaintiff, for the commission of a felony is
an offense against the State. Thus, under Section 2, Rule 110 of the Rules of
Court the complaint or information filed in court is required to be brought in
the name of the "People of the Philippines."
o The filing of the estafa case by MBC was a last ditch effort to salvage its ties
with Illusorio as a valuable client, by bolstering the estafa case which he filed
against his secretary.
NICO CRISOLOGO
Page 116 of 528

104 Gan vs. CA | Fernan, C.J.: o It presupposes sufficient time to analyze the situation and to ponder on
G.R. No. L-44264, Sept. 19, 1988 | 165 SCRA 378 which of the different courses of action would result to the least possible
harm to herself and to others
FACTS • The CA, in its decision, said that Gan should have stepped on the brakes when she
• July 4, 1972 (8am): Hedy Gan was driving a Toyota Crown Sedan along North Bay saw the car going in the opposite direction. And that she should not only have
Boulevard, Tondo, Manila swerved the car she was driving to the right but should have also tried to stop or
• While driving two vehicles, a truck and a jeepney, are parked at the right side of the lessen her speed so that she would not bump into the pedestrian.
road • The SC held that the appellate court is asking too much from a mere mortal like the
• While driving, there was a vehicle coming from the opposite direction and another petitioner who in the blink of an eye had to exercise her best judgment to extricate
one who overtakes the first vehicle herself from a difficult and dangerous situation caused by the driver of the
• To avoid a head-on collision, the Gan served to the right and as a consequence: overtaking vehicle.
o The front bumper of the Toyota Crown Sedan hit an old man pedestrian o The danger confronting Gan was real and imminent, threatening her very
(Isidoro Casino) ~ DOA to Jose Reyes Memorial Hospital existence
 Casino was pinned against the rear of the parked jeepney and the o She had no opportunity for rational thinking but only enough time to head
jeepney moved forward hitting the truck the very powerful instinct of self-preservation
o Sedan was damaged on its front
o The jeep suffered damages WHEREFORE, Gan is acquitted.
o The truck sustained scratches
• Gan was convicted of Homicide thru Reckless Imprudence
• On appeal, the conviction was modified to Homicide thru Simple Imprudence
• Petitioner now appeals to the said ruling
ISSUES & ARGUMENTS
W/N Gan is criminally liable for the accident
NO
• TEST for determining negligence:
o Would a prudent man in the position of the person to whom negligence is
attributed foresee harm to the person injured as a reasonable consequence
of the course about to be pursued?
o If so, the law imposes the duty on the doer to take precaution against its
mischievous results and the failure to do so constitutes negligence
• However a corollary rule must be understood, that is the ‘Emergency Rule’ which
provides that:
o One who suddenly finds himself in a place of danger, and is required to act
without time to consider the best means that may be adopted to avoid the
impending danger, is not guilty of negligence, if he fails to adopt what
subsequently and upon reflection may appear to have been a better
method, unless the emergency in which he finds himself is brought about
by his own negligence
CEO OCAMPO
Page 117 of 528

105 Estacion vs. Bernardo| Austria-Martinez YES. NOE IS GUILTY OF CONTRIBUTORY NEGLIGENCE BY
G.R. No. 144723, February 27, 2006 | 483 SCRA 222 STANDING AT THE REAR PORTION OF THE JEEP.
• Contributory Negligence is conduct on the part of the injured party, contributing as
FACTS a legal cause to the harm he has suffered, which falls below the standard to which he
• October 16, 1982, afternoon, Respondent Noe was going home to Dumaguete from is required to conform for his own protection.
Cebu. He boarded a Ford Fiera jeepney driven by Geminiano Quinquillera • Noe’s act of standing on the left rear portion showed his lack of ordinary care and
(Quinquillera) and owned by Cecilia Bandoquillo (Bandoquillo). foresight that such act could cause him harm or put his life in danger.
• He was seated on the extension seat at the center of the fiera. • To hold a person as having contributed to his injuries, it must be shown that he
• From San Jose, an old woman wanted to ride so Noe offered his seat and performed an act that brought about his injuries in disregard of warning or signs of
hung/stood on the left rear carrier of the vehicle (sumabit) an impending danger to health and body.
• The fiera slowed down and stopped to pick up more passengers. • Quinquillera (jeepney driver) was also negligent because there was overloading
• Suddenly, an Isuzu cargo truck owned by petitioner Estacion and driven by which is in violation of traffic rules and regulations. He also allowed Noe to stand
Gerosano, which was travelling in the same direction, hit the rear portion of the on the left rear of his jeep.
jeepney. • There is also a presumption of negligence on the part of the owner of the jeep,
• The fiera crushed Noe’s legs and feet, he was brought to Siliman Univ Med Center Bandoquillo, which she did not rebut.
where his lower left leg was amputated. • 20-80 ratio distribution of damages.
• Police report showed that there were 10 more who were injured by the accident.
• Feb 18, 1993, Now and his guardian ad litem Arlie Bernardo filed w the RTC of
Dumaguete a complaint for damages arising from quasi-delict against petitioner as
owner of the truck and his driver.
• RTC ruled that Gerosano was negligent and it was the direct and proximate cause of
the incident. It also held petitioner liable as employer.
• CA affirmed in toto the RTC.
•
ISSUES & ARGUMENTS
• W/N Petitioner is liable?
• W/N Noe was guilty of contributory negligence?
YES.
• From the way the truck reacted to the application of the brakes, it can be shown
that Gerosano was driving at a fast speed because the brakes skidded a lengthy 48
feet as shown in he sketch of the police.
• There was also only one tire mark which meant that the brakes of the truck were not
aligned properly, otherwise, there would have been 2 tire marks.
• It is the negligent act of petitioner’s driver of driving the cargo truck at a fast speed
coupled with faulty brakes which was the proximate cause of respondent Noe’s
injury.
• As employer of Gerosano, petitioner is primarily and solidarily liable for the quasi-
delict committed by the former. He is presumed to be negligent in the selection of
his employee which petitioner failed to overcome.
• He failed to show that he examined driver Gerosano as to his qualifications,
experience and records.
PAT FERNANDEZ
Page 118 of 528

106 Cadiente vs. Macas | Quisumbing
G.R. No. 161946, November 14, 2008 |
FACTS
• At the intersection of Buhangin and San Vicente Streets, respondent Bithuel Macas,
a 15-year old high school student, was standing on the shoulder of the road.
• He was bumped and ran over by a Ford Fiera, driven by Chona Cimafranca.
Cimafranca then rushed Macas to the Davao Medical Center.
• Mathas suffered severe muscular and major vessel injuries in both thighs and other
parts of his legs. In order to save his life, the surgeon had to amputate both legs up
to the groins.
• Cimafranca had since absconded and disappeared. However, records showed that
the Ford Fiera was registered in the name of Atty. Medardo Cadiente.
• Cadiente claimed that when the accident happened, he was no longer the owner of
the said Ford Fiera. He allegedly sold it to Engr. Jalipa.
• Macas’ father filed a complaint for torts and damages against Cimafranca and
Cadiente.
• Trial court ruled in favor of Macas. Affirmed by the CA.
ISSUES & ARGUMENTS
W/N there was contributory negligence on the part of Macas?
NO.
• The underlying precept on contributory negligence is that a plaintiff who is partly
responsible for his own injury should not be entitled to recover damages in full, but
must proportionately bear the consequences of his own negligence. The defendant
is thus held liable only for the damages actually caused by his negligence.
• In this case, when the accident happened, Macas was standing on the shoulder,
which was the uncemented portion of the highway. The shoulder was intended for
pedestrian use. Only stationary vehicles, such as those loading or unloading
passengers may use the shoulder. Running vehicles are not supposed to pass
through the said uncemented portion of the highway.
• However, the Ford Fiera in this case, without so much as slowing down, took off
from the cemented part of the highway, inexplicably swerved to the shoulder, and
recklessly bumped and ran over an innocent victim. Macas was just where he should
be when the unfortunate event transpired.
CADIENTE STILL LIABLE.

• Since the Ford Fiera was still registered in the petitioner’s name at the time the
misfortune took place, Cadiente cannot escape liability for the permanent injury it
caused the respondent.
FRANCIS ESPIRITU
Page 119 of 528

107 NPC v Heirs of Casionan violation of the required distance of 18 to 20 feet. If the transmission
GR 165969, November 27 2008 lines were properly maintained by petitioner, the bamboo pole carried
by Noble would not have touched the wires. He would not have been
FACTS electrocuted.
• A trail leading to Sangilo, Itogon, existed in Dalicno and this trail was regularly • Negligence is the failure to observe, for the protection of the interest
used by members of the community. Sometime in the 1970’s, petitioner NPC of another person, that degree of care, precaution, and vigilance which
installed high-tension electrical transmission lines of 69 kilovolts (KV) the circumstances justly demand, whereby such other person suffers
traversing the trail. injury. On the other hand, contributory negligence is conduct on
o Eventually, some of the transmission lines sagged and dangled the part of the injured party, contributing as a legal cause to the
reducing their distance from the ground to only about eight to ten harm he has suffered, which falls below the standard which he is
feet. This posed a great threat to passersby who were exposed to the required to conform for his own protection.
danger of electrocution especially during the wet season. o The underlying precept on contributory negligence is that a
• As early as 1991, the leaders of Ampucao, Itogon made verbal and written plaintiff who is partly responsible for his own injury should
requests for NPC to institute safety measures to protect users of the trail from not be entitled to recover damages in full but must bear the
their high tension wires. On June 18, 1991 and February 11, 1993, Pablo and consequences of his own negligence.15 If indeed there was
Pedro Ngaosie, elders of the community, wrote Engr. Paterno Banayot, Area contributory negligence on the part of the victim, then it is
Manager of NPC, to make immediate and appropriate repairs of the high proper to reduce the award for damages.
tension wires. • In this case, the trail where Noble was electrocuted was regularly used
• On June 27, 1995, Noble and his co-pocket miner, Melchor Jimenez, were at by members of the community. There were no warning signs to
Dalicno. They cut two bamboo poles for their pocket mining. One was 18 to inform passersby of the impending danger to their lives should they
19 feet long and the other was 14 feet long. Each man carried one pole accidentally touch the high tension wires. Also, the trail was the only
horizontally on his shoulder viable way from Dalicon to Itogon. Hence, Noble should not be
• As Noble was going uphill and turning left on a curve, the tip of the bamboo faulted for simply doing what was ordinary routine to other workers in
pole he was carrying touched one of the dangling high tension wires. the area.
o Melchor, who was walking behind him, narrated that he heard a
buzzing sound when the tip of Noble’s pole touched the wire for
only about one or two seconds. Thereafter, he saw Noble fall to
the ground. Melchor rushed to Noble and shook him but the
latter was already dead. Their co-workers heard Melchor’s shout
for help and together they brought the body of Noble to their
camp.
• Consequently, the heirs of the deceased Noble filed a claim for damages against
the NPC before the Regional Trial Court (RTC) in Benguet.
ISSUES & ARGUMENTS
Was there contributory negligence on the part of the victim?
Yes
• The sagging high tension wires were an accident waiting to happen. As

established during trial, the lines were sagging around 8 to 10 feet in JOFI CUENCA
Page 120 of 528

108 Afialda v. Hisole | Reyes
No. L–2075 November 29, 1949| 85 Phil. 67
FACTS
• Spouses Hisole hired Loreto Afialda as caretaker of the former’s carabaos at a fixed
compensation.
• While Loreto was tending the carabaos, he was gored by one of them and died as a
result. Loreto’s elder sister, Margarita Afialda, now sues spouses Hisole as Loreto’s
dependant and heir.
ISSUES & ARGUMENTS
W/N the spouses Hisole are liable for the death of their caretaker, Loreto
Afialda.
NO, THEY ARE NOT LIABLE.

• The animal was in the custody and under the control of the caretaker, who was paid
for his work as such. Obviously, it was the caretaker’s business to try to prevent the
animal from causing injury or damage to anyone, including himself. And being
injured by the animal under those circumstances was one of the risks of the
occupation which he had voluntarily assumed and for which he must take the
consequences.
JOHN FADRIGO
Page 121 of 528

109 Ong vs. Metropolitan Water District | Bautista Angelo • Metropolitan has taken all necessary precautions to avoid danger to the lives of its
L-7644 August 29, 1958 | patrons. It has been shown that the swimming pools of appellee are provided with a
ring buoy, toy roof, towing line, oxygen resuscitator and a first aid medicine kit. The
FACTS bottom of the pools is painted with black colors so as to insure clear visibility. There
• Metropolitan owns 3 swimming pools at its filters in Balara, Quezon City is on display in a conspicuous place within the area certain rules and regulations
• It charges the public a certain fee if such wanted to use its pools governing the use of the pools. Appellee employs six lifeguards who are all trained
• Dominador Ong, 14 years of age, son of petitioners, went to the pools along with as they had taken a course for that purpose and were issued certificates of
his 2 brothers proficiency. These lifeguards work on schedule prepared by their chief and arranged
• He stayed in the shallow pool, but then he told his brothers that he would get in such a way as to have two guards at a time on duty to look after the safety of the
something to drink. His brothers left him and went to the Deep pool bathers. There is a male nurse and a sanitary inspector with a clinic provided with
• Around 4pm that day, a bather reported that one person was swimming to long oxygen resuscitator. And there are security guards who are available always in case
under water of emergency.
• Upon hearing this, the lifeguard on duty dove into the pool to retrieve Ong’s lifeless
body. Applying first aid, the lifeguard tried to revive the boy. • The record also shows that when the body of minor Ong was retrieved from the
• Soon after, male nurse Armando Rule came to render assistance, followed by bottom of the pool, the employees of appellee did everything possible to bring him
sanitary inspector Iluminado Vicente who, after being called by phone from the back to life. When they found that the pulse of the boy was abnormal, the inspector
clinic by one of the security guards, boarded a jeep carrying with him the immediately injected him with camphorated oil. When the manual artificial
resuscitator and a medicine kit, and upon arriving he injected the boy with respiration proved ineffective they applied the oxygen resuscitator until its contents
camphorated oil. After the injection, Vicente left on a jeep in order to fetch Dr. were exhausted. And while all these efforts were being made, they sent for Dr.
Ayuyao from the University of the Philippines. Meanwhile, Abaño continued the Ayuyao from the University of the Philippines who however came late because
artificial manual respiration, and when this failed to revive him, they applied the upon examining the body found him to be already dead. All of the foregoing shows
resuscitator until the two oxygen tanks were exhausted that appellee has done what is humanly possible under the circumstances to restore
• Investigation was concluded and the cause of death is asphyxia by submersion in life to minor Ong and for that reason it is unfair to hold it liable for his death
water (pagkalunod)
• The parents of Ong bring this action for damages against Metropolitan, alleging
negligence on the selection and supervision of its employees and if not negligent, The Last Clear Chance Doctrine is inapplicable in this case
they had the last clear chance to revive Ong. • The record does not show how minor Ong came into the big swimming pool. The
• It is to be noted that Metropolitan had complete safety measures in place: they had a only thing the record discloses is that minor Ong informed his elder brothers that he
male nurse, six lifeguards, ring buoys, toy roof, towing line, saving kit and a was going to the locker room to drink a bottle of coke but that from that time on
resuscitator. There is also a sanitary inspector who is in charge of a clinic established nobody knew what happened to him until his lifeless body was retrieved. The
for the benefit of the patrons. Defendant has also on display in a conspicuous place doctrine of last clear chance simply means that the negligence of a claimant does not
certain rules and regulations governing the use of the pools, one of which prohibits preclude a recovery for the negligence of defendant where it appears that the latter,
the swimming in the pool alone or without any attendant. Although defendant does by exercising reasonable care and prudence, might have avoided injurious
not maintain a full- time physician in the swimming pool compound, it has however consequences to claimant notwithstanding his negligence
a nurse and a sanitary inspector ready to administer injections or operate the oxygen • Since it is not known how minor Ong came into the big swimming pool and it being
resuscitator if the need should arise apparent that he went there without any companion in violation of one of the
regulations of appellee as regards the use of the pools, and it appearing that lifeguard
ISSUES & ARGUMENTS Abaño responded to the call for help as soon as his attention was called to it and
• W/N Metropolitan is liable to the Ongs for its negligence immediately after retrieving the body all efforts at the disposal of appellee had been
• W/N the last clear chance doctrine may be invoked in this case put into play in order to bring him back to life, it is clear that there is no room for
the application of the doctrine now invoked by appellants to impute liability to
HOLDING & RATIO DECIDENDI appellee.
No. Metropolitan is not negligent

GINO CAPATI
Page 122 of 528

110 Co. v. CA parties’ agreement at the pre-trial that the car was carnapped. Carnapping does not
G.R. 124922 June 22, 1998 foreclose the possibility of fault or negligence on the part of private respondent.
FACTS It must likewise be emphasized that pursuant to Articles 1174 and 1262 of the
New Civil Code, liability attaches even if the loss was due to a fortuitous event if “the
• On July 18, 1990, petitioner entrusted his Nissan pick-up car 1988 model to private nature of the obligation requires the assumption of risk”. Carnapping is a normal
respondent - which is engaged in the sale, distribution and repair of motor vehicles business risk for those engaged in the repair of motor vehicles. For just as the owner is
for job repair services and supply of parts. exposed to that risk so is the repair shop since the car was entrusted to it. That is why,
• Private respondent undertook to return the vehicle on July 21, 1990 fully serviced repair shops are required to first register with the Department of Trade and Industry
and supplied in accordance with the job contract. After petitioner paid in full the (DTI) and to secure an insurance policy for the “shop covering the property entrusted by
repair bill in the amount of P1,397.00 private respondent issued to him a gate pass its customer for repair, service or maintenance” as a pre-requisite for such
for the release of the vehicle on said date. But came July 21, 1990, the latter could registration/accreditation. Violation of this statutory duty constitutes negligence per se.
not release the vehicle as its battery was weak and was not yet replaced. Left with no Having taken custody of the vehicle, private respondent is obliged not only to repair the
option, petitioner himself bought a new battery nearby and delivered it to private vehicle but must also provide the customer with some form of security for his property
respondent for installation on the same day. However, the battery was not installed over which he loses immediate control. An owner who cannot exercise the seven (7) juses
and the delivery of the car was rescheduled to July 24, 1990 or three (3) days later. or attributes of ownership the right to possess, to use and enjoy, to abuse or consume, to
When petitioner sought to reclaim his car in the afternoon of July 24, 1990, he was accessories, to dispose or alienate, to recover or vindicate and to the fruits is a crippled
told that it was carnapped earlier that morning while being road-tested by private owner. Failure of the repair shop to provide security to a motor vehicle owner would
respondent’s employee along Pedro Gil and Perez Streets in Paco, Manila. Private leave the latter at the mercy of the former. Moreover, on the assumption that private
respondent said that the incident was reported to the police. respondent’s repair business is duly registered, it presupposes that its shop is covered by
• Having failed to recover his car and its accessories or the value thereof, petitioner insurance from which it may recover the loss. If private respondent can recover from its
filed a suit for damages against private respondent anchoring his claim on the latter’s insurer, then it would be unjustly enriched if it will not compensate petitioner to whom
alleged negligence. For its part, private respondent contended that it has no liability no fault can be attributed. Otherwise, if the shop is not registered, then the presumption
because the car was lost as a result of a fortuitous event, the car napping. of negligence applies.
ISSUE & ARGUMENTS
Whether a repair shop can be held liable for the loss of a customer’s vehicle while
the same is in its custody for repair or other job services?
It is a not a defense for a repair shop of motor vehicles to escape liability simply
because the damage or loss of a thing lawfully placed in its possession was due to
carnapping. Carnapping per se cannot be considered as a fortuitous event. The fact that a
thing was unlawfully and forcefully taken from another’s rightful possession, as in cases
of carnapping, does not automatically give rise to a fortuitous event. To be considered as
such, carnapping entails more than the mere forceful taking of another’s property. It
must be proved and established that the event was an act of God or was done solely by
third parties and that neither the claimant nor the person alleged to be negligent has any
participation. In accordance with the Rules of evidence, the burden of proving that the
loss was due to a fortuitous event rests on him who invokes it which in this case is the
private respondent. However, other than the police report of the alleged carnapping
incident, no other evidence was presented by private respondent to the effect that the
incident was not due to its fault. A police report of an alleged crime, to which only
private respondent is privy, does not suffice to established the carnapping. Neither does
it prove that there was no fault on the part of private respondent notwithstanding the J.C. LERIT
Page 123 of 528

111 Erquiaga v CA | Quisumbing HOLDING & RATIO DECIDENDI
G.R. No. 124513. October 17, 2001
THE DOCTRINE OF CAVEAT EMPTOR DOES NOT APPLY.
FACTS Petitioners apparently misapply the doctrine. A basic premise of the doctrine of
• Honesta Bal is a businesswoman who owned a bookstore. Sometime in May 1989, “Let the buyer beware” is that there be no false representation by the seller. As
she was contacted by Manuel Dayandante @ Manny Cruz who offered to buy her discussed earlier, petitioners’ scheme involves a well-planned scenario to entice the
land in Pili, Camarines Sur. He told Honesta that the company he represented was buyer to pay for the bogus marine preservative. Even the initial buy-and-sell
interested in purchasing her property. transactions involving one and then five cans were intended for confidence building
• Honesta’s daughter, Josephine Tapang, received a telegram from Dayandante before the big transaction when they clinched the deal involving P322,500.
informing Honesta that the sale had been approved and that he would arrive with Thereafter, they vanished from the scene. These circumstances clearly show that
the inspection team. petitioners’ Orosco and Erquiaga were in on the plot to defraud Honesta. Honesta
• Honesta received a call from Dayandante. Her daughter and she met Dayandante could hardly be blamed for not examining the goods. She was made to depend on
and a certain Lawas @ Rodolfo Sevilla at the Aristocrat Hotel. Dayandante and petitioners’ supposed expertise. She said she did not open the cans as there was a
Lawas said they were field purchasing representative and field purchasing head, label in each with a warning that the seal should not be broken. That Honesta Bal
respectively, of the Taiwanese Marine Products. They persuaded Honesta to thought the buy-and-sell business would result in a profit for her is no indictment of
purchase cans of a marine preservative which, could be bought for P1,500 each her good faith in dealing with petitioners. The ancient defense of caveat emptor
from a certain peddler. In turn, they would buy these cans from her at P2,000 each. belongs to a by-gone age, and has no place in contemporary business ethics.
• The following day, Glenn Orosco, one of herein petitioners, appeared at Honesta’s
store and introduced himself as an agent, a.k.a. “Rey,” who sold said marine It is not true that Honesta did not suffer any damage because she merely borrowed
preservative. Like a fish going after a bait, Honesta purchased a can which she sold the money, and that she showed no proof that she issued a check to pay said
to Dayandante for P1,900. The following day, Orosco brought five more cans debt.The prosecution clearly showed that Bichara had sent a demand letter to
which Honesta bought and eventually sold to Lawas. It was during this transaction Honesta asking for payment. Honesta had borrowed P322,500 from Bichara for
that petitioner Roberto Erquiaga, a.k.a. “Mr. Guerrerro,” was introduced to Honesta which she assuredly must repay. This constitutes business loses to her and, in our
to ascertain whether the cans of marine preservative were genuine or not. view, actual damages as contemplated under Article 315, par. 2 (a).
• Subsequently, Orosco delivered 215 cans to Honesta. Encouraged by the huge
profits from her previous transactions, she purchased all 215 cans for P322,500. Given the facts established in this case, we are convinced that estafa had been
She borrowed the money from a Jose Bichara at 10% interest on the advice of consummated by petitioners who had conspired with each other, and the guilt of
Erquiaga who lent her P5,000.00 as deposit or earnest money and who promised to petitioners had been adequately proved beyond reasonable doubt.
shoulder the 10% interest of her loan. Soon after the payment, Lawas, Dayandante,
Erquiaga, and Orosco vanished. Realizing that she was conned, Honesta reported
the incident to the National Bureau of Investigation (NBI) which, upon examination
of the contents of the cans, discovered that these were nothing more than starch.
The NBI likewise uncovered that the modus operandi and sting operation
perpetrated on Honesta had been going on in other parts of the country, in
particular, Cebu, Batangas, Dagupan, Baguio and Olongapo.
ISSUES & ARGUMENTS
W/N Honesta assumed risk of buying the goods

o Petitioners suggest that damages should not be awarded because Honesta
was forewarned to buy at her own risk and because the doctrine of caveat
emptor placed her on guard.
JON LINA
Page 124 of 528
112 Picart vs. Smith| Street • The control of the situation had then passed entirely to Smith, and it was his duty to
March 15, 1918 | 37 Phil 809 bring his car to an immediate stop or seeing no other persons on the bridge, to take
the other side and pass sufficiently far away from the horse to avoid collision. There
FACTS was an appreciable risk that a horse not acquainted with vehicles would react that
• Amando Picart seeks to recover from the defendant Frank Smith the sum of Php way.
31,100 as damages alleged to have been caused by an automobile driven by Smith. • The Test to Determine the Existence of Negligence in a particular case may be
The incident happened on Dec 12, 1912, at the Carlatan Bridge, San Fernando, La stated as follows: Did the defendant in doing the alleged negligent act use that
Union. reasonable care and caution which an ordinarily prudent person would have used
• Picart was riding on his pony aver the said bridge. Before he had gotten half way the same situation? If not then he is guilty of negligence.
across, Smith approached from the opposite direction driving his vehicle at 10 to 12 • The law in effect adopts the standard supposed to be supplied by the imaginary
miles per hour. conduct of the discreet paterfamilias of the Roman Law. The existence of
• Smith blew his horn to give warning as he observed that the man was not observing negligence in a given case is not determined by reference to the personal judgment
rules of the road. Smith continued his course and made two more blasts. of the actor in the situation before him. The law considers what would be reckless,
• Picart was perturbed by the rapidity of the approach that he pulled his pony to the blameworthy or negligent in the man of ordinary intelligence and prudence and
right side of the railing. determines liability by that.
• As the automobile approached, Smith guided the automobile to its left, that being • A prudent man, placed in the position of Smith in the Court’s opinion would have
the proper side of the road for the machine. recognized that the course which he was pursuing was fraught with risk and would
• Smith noticed that the pony was not frightened so he continued without diminution therefore have foreseen harm to the horse and the rider as a reasonable consequence
of speed. of that course. (DOCTRINE OF LAST CLEAR CHANCE)
• When he learned that there was no possibility for the pony to go on the other side,
Smith drove his car to the right to avoid hitting the pony, but in so doing the vehicle
passed in a close proximity to the horse that it became frightened and turned its
belly across the bridge with its head towards the railing.
• The horse was struck on the hock of the left hind leg by the flange of the car and
the limb was broken.
• The horse fell and its rider was thrown off with some violence.
• It showed that the free space where the pony stood between the automobile and the
railing was probably less than one half meters.
• The horse died and Picart received contusions which caused temporary
unconsciousness and required medical attention for several days.
ISSUES & ARGUMENTS
Whether or not Smith was guilty of negligence that gives rise to a civil obligation to
repair the damage done to Picart and his pony.
Yes, the court ruled that Smith that he is liable to pay Picart the amount of P200. The
sum is computed to include the value of the horse, medical expenses of the plaintiff, the
loss or damage occasioned to articles of his apparel.
• In the nature of things, this change in situation occurred while the automobile was
still some distance away. From this moment it was no longer possible for Picart to
escape being run down by going to a place for greater safety. SATURDAY ALCISO
Page 125 of 528

113 Bustamante, et al v. CA, Del Pilar, Montesiano | Medialdea • TC declared that the negligent acts of both drivers directly caused the accident
G.R. No. 89880, February 6, 1991 which led to the death of the passengers.
• CA, ruling on the contrary, opined that the bus driver had the last clear chance to
FACTS avoid the collision and his reckless negligence in proceeding to overtake the hand
• A collision occurred between a gravel and sand truck and a Mazda passenger bus tractor was the proximate cause of the collision.
along the national road at Cavite. The front left side portion (barandilla) of the body • The doctrine of last clear chance, stated broadly, is that the negligence of the
of the truck sideswiped the left side wall of the passenger bus, ripping off the said plaintiff does not preclude a recovery for the negligence of the defendant where it
wall from the driver's seat to the last rear seat. appears that the defendant, by exercising reasonable care and prudence, might have
• The cargo truck was driven by defendant Montesiano and owned by defendant Del avoided injurious consequences to the plaintiff notwithstanding the plaintiff's
Pilar; while the passenger bus was driven by defendant Susulin. The vehicle was negligence. In other words, the doctrine of last clear chance means that even though
registered in the name of defendant Novelo but was owned and/or operated as a a person's own acts may have placed him in a position of peril, and an injury results,
passenger bus jointly by defendants Magtibay and Serrado. the injured person is entitled to recovery. As the doctrine is usually stated, a person
• The cargo truck and the passenger bus were approaching each other, coming from who has the last clear chance or opportunity of avoiding an accident,
the opposite directions of the highway. While the truck was still about 30 meters notwithstanding the negligent acts of his opponent or that of a third person imputed
away, Susulin, the bus driver, saw the front wheels of the vehicle wiggling. He also to the opponent is considered in law solely responsible for the consequences of the
observed that the truck was heading towards his lane. Not minding this accident.
circumstance due to his belief that the driver of the truck was merely joking, Susulin • The practical import of the doctrine is that a negligent defendant is held liable to a
shifted from fourth to third gear in order to give more power and speed to the bus, negligent plaintiff, or even to a plaintiff who has been grossly negligent in placing
which was ascending the inclined part of the road, in order to overtake or pass a himself in peril, if he, aware of the plaintiffs peril, or according to some authorities,
Kubota hand tractor being pushed by a person along the shoulder of the highway. should have been aware of it in the reasonable exercise of due case, had in fact an
While the bus was in the process of overtaking or passing the hand tractor and the opportunity later than that of the plaintiff to avoid an accident.
truck was approaching the bus, the two vehicles sideswiped each other at each • The principle of last clear chance applies in a suit between the owners and drivers of
other's left side. After the impact, the truck skidded towards the other side of the colliding vehicles. It does not arise where a passenger demands responsibility from
road and landed on a nearby residential lot, hitting a coconut tree and felling it. the carrier to enforce its contractual obligations. For it would be inequitable to
• Due to the impact, several passengers of the bus were thrown out and died as a exempt the negligent driver and its owners on the ground that the other driver was
result of the injuries they sustained. likewise guilty of negligence.
• TC conclude that the negligent acts of both drivers contributed to or combined with • Furthermore, as between defendants, the doctrine cannot be extended into the field
each other in directly causing the accident which led to the death of the of joint tortfeasors as a test of whether only one of them should be held liable to the
aforementioned persons. The liability of the two drivers for their negligence is injured person by reason of his discovery of the latter's peril, and it cannot be
solidary. invoked as between defendants concurrently negligent. As against third persons, a
• Only defendants Federico del Pilar and Edilberto Montesiano, owner and driver, negligent actor cannot defend by pleading that another had negligently failed to take
respectively, of the sand and gravel truck have interposed an appeal. CA dismissed action which could have avoided the injury.
the complaint insofar as defendants-appellants Federico del Pilar and Edilberto • Well settled is the rule that parties, counsel and witnesses are exempted from liability
Montesiano are concerned. in libel or slander cases for words otherwise defamatory, uttered or published in the
course of judicial proceedings, provided the statements are pertinent or relevant to
ISSUES & ARGUMENTS the case.
• W/N the respondent court has properly and legally applied the doctrine of • The Court is convinced that the respondent Court committed an error of law in
"last clear chance" in the present case despite its own finding that appellant applying the doctrine of last clear chance as between the defendants, since the case
cargo truck driver was admittedly negligent in driving his cargo truck. at bar is not a suit between the owners and drivers of the colliding vehicles but a suit
brought by the heirs of the deceased passengers against both owners and drivers of
HOLDING & RATIO DECIDENDI the colliding vehicles. Therefore, the respondent court erred in absolving the owner
and driver of the cargo truck from liability.
Petition is granted. CA decision reversed and set aside. TC decision reinstated.
NO. Doctrine of Last Clear Chance is not applicable in this case.
TIN OCAMPO-TAN
Page 126 of 528

114 George Mckee and Araceli Koh Mckee vs. IAC , Jaime Tayag and Rosalinda • The test of negligence and the facts obtaining in this case, it is manifest that no
manalo | Davide negligence could be imputed to Jose Koh. Any reasonable and ordinary prudent
G.R. No. L-68102, July 16, 1992| 211 SCRA 517 man would have tried to avoid running over the two boys by swerving the car away
from where they were even if this would mean entering the opposite lane. Avoiding
FACTS such immediate peril would be the natural course to take particularly where the
• Between 9 and 10 o'clock in the morning of January 1977, in Pulong Pulo Bridge vehicle in the opposite lane would be several meters away and could very well slow
along MacArthur Highway, between Angeles City and San Fernando, Pampanga, a down, move to the side of the road and give way to the oncoming car. Moreover,
head-on-collision took place between an International cargo truck, Loadstar, owned under what is known as the emergency rule, "one who suddenly finds himself in a
by Tayag and Manalo, driven by Galang, and a Ford Escort car driven by Jose Koh, place of danger, and is required to act without time to consider the best means that
resulting in the deaths of Jose Koh, Kim Koh McKee and Loida Bondoc, and may be adopted to avoid the impending danger, is not guilty of negligence, if he fails
physical injuries to George Koh McKee, Christopher Koh McKee and Araceli Koh to adopt what subsequently and upon reflection may appear to have been a better
McKee, all passengers of the Ford Escort method, unless the emergency in which he finds himself is brought about by his
• Immediately before the collision, the cargo truck, which was loaded with 200 cavans own negligence"
of rice weighing about 10,000 kilos, was traveling southward from Angeles City to • Considering the sudden intrusion of the 2 boys into the lane of the car, the Court
San Fernando Pampanga, and was bound for Manila. The Ford Escort, on the other finds that Jose Koh adopted the best means possible in the given situation to avoid
hand, was on its way to Angeles City from San Fernando hitting them. Applying the above test, therefore, it is clear that he was not guilty of
• When the Ford Escort was about 10 meters away from the southern approach of negligence
the bridge, 2 boys suddenly darted from the right side of the road and into the lane • In any case, assuming, arguendo that Jose Koh is negligent, it cannot be said that his
of the car moving back and forth, unsure of whether to cross all the way to the negligence was the proximate cause of the collision. Galang's negligence is apparent
other side or turn back in the records. He himself said that his truck was running at 30 miles (48 kilometers)
• Jose Koh blew the horn of the car, swerved to the left and entered the lane of the per hour along the bridge while the maximum speed allowed by law on a bridge is
truck; he then switched on the headlights of the car, applied the brakes and only 30 kilometers per hour. Under Article 2185 of the Civil Code, a person driving
thereafter attempted to return to his lane. But before he could do so, his car collided a vehicle is presumed negligent if at the time of the mishap, he was violating any
with the truck. The collision occurred in the lane of the truck, which was the traffic regulation
opposite lane, on the said bridge • Even if Jose Koh was indeed negligent, the doctrine of last clear chance finds
• As a result of the accident, 2 civil cases were filed for damages for the death and application here. Last clear chance is a doctrine in the law of torts which states that the
physical injuries sustained by the victims boarding the Ford Escort; as well as a contributory negligence of the party injured will not defeat the claim for damages if it is shown that
criminal case against Galang the defendant might, by the exercise of reasonable care and prudence, have avoided the consequences
• During the trial, evidence were presented showing that the driver of the Truck was of the negligence of the injured party. In such cases, the person who had the last clear chance to avoid
speeding resulting in the skid marks it caused in the scene of the accident the mishap is considered in law solely responsible for the consequences thereof
• The lower court found Galang guilty in the criminal case, but the civil cases were • Applying the foregoing doctrine, it is not difficult to rule that it was the truck
dismissed driver's negligence in failing to exert ordinary care to avoid the collision which was,
• On appeal, the CA affirmed the conviction of Galang, and reversed the decision in in law, the proximate cause of the collision. As employers of the truck driver, Tayag
the civil cases, ordering the payment of damages for the death and physical injuries and Manalo are, under Article 2180 of the Civil Code, directly and primarily liable
of the McKee family for the resulting damages. The presumption that they are negligent flows from the
• On MR, the CA reversed its previous decision and ruled in favor of the owners of negligence of their employee. That presumption, however, is only juris tantum, not
the truck juris et de jure. Their only possible defense is that they exercised all the diligence of a
good father of a family to prevent the damage, which they failed to do
ISSUES & ARGUMENTS
Petition GRANTED. Resolution SET ASIDE and previous DECISION REINSTATED.
• W/N the owner and driver of the Truck were responsible for the collision

THE PROXIMATE CAUSE OF THE COLLISION WAS THE OVER
SPEEDING OF THE TRUCK SHOWING ITS NEGLIGENCE KATH MATIBAG
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115 PBCom v. CA|
269 SCRA 695
FACTS
• Rommel’s Marketing Corporatiopn (RMC), represented by its President and General
Manager Romeo Lipana filed a case agains PBCom to recover a sum of money
representing various deposits it made with the latter. Such amounts were not
credited to its account and were instead deposited to the account of onr Bienvenido
Cotas, allegedly due to the Gross and inexcusable negligence of the bank.
• Lipana claims to have entrusted RMC funds in the form of cash to his secretary,
Yabut. He said that Yabut was to deposit such amount to PBCom. However, what
the secretary did was to deposit it in the account of his husband and only wrote
RMC’s account number in the duplicate copy of the deposit slips.
• This happened for a year without RMC knowing. When it found out about the
scam, it filed a collection suit against PBCom.
ISSUES & ARGUMENTS

W/N the Proximate Cause of the loss is the negligence of respondent RMC and Romeo
Lipana
The Proximate Cause of the loss is the negligence of PBCom through its teller in
validating the deposit slips notwithstanding that the duplicate copy is not completely
accomplished.
Under the last clear chance doctrine, petitioner bank is the liable party. The doctrine
states that where both parties are negligent, but the negligent act of he one is appreciably
later in time than that of the other, or, when it is impossible to determine whose fault it
should be attributed to, the one who had the last clear opportunity to avoid the harm and
failed to do so is chargeable with the consequences thereof. Petitioner bank thru its
teller, had the last clear opportunity to avert the injury incurred by its client, simply by
faithfully observing their self imposed valdation procedure.
NINA MEJIA
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116 Canlas vs. Court of Appeals | Purisima care in the administration of anesthesia on a patient. The conduct of a
G.R. No. 112160, February 28, 2000| preanesthetic/preoperative evaluation prior to an operation, whether elective or
emergency, cannot be dispensed with. Such evaluation is necessary for the
FACTS formulation of a plan of anesthesia care suited to the needs of the patient
• Petitioner Erlinda Ramos, after seeking professional medical help, was advised to concerned.
undergo an operation for the removal of a stone in her gall bladder. She was • Nonetheless, Dr. Gutierrez omitted to perform a thorough preoperative evaluation
referred to Dr. Hosaka, a surgeon, who agreed to perform the operation on her. The on Erlinda. As she herself admitted, she saw Erlinda for the first time on the day of
operation was scheduled for at 9:00 in the morning at private respondent De Los the operation itself, one hour before the scheduled operation. She auscultated the
Santos Medical Center (DLSMC). Since neither petitioner Erlinda nor her husband, patient’s heart and lungs and checked the latter’s blood pressure to determine if
petitioner Rogelio, knew of any anesthesiologist, Dr. Hosaka recommended to them Erlinda was indeed fit for operation. However, she did not proceed to examine the
the services of Dr. Gutierrez. patient’s airway. Had she been able to check petitioner Erlinda’s airway prior to the
• Petitioner Erlinda was admitted to the DLSMC the day before the scheduled operation, Dr. Gutierrez would most probably not have experienced difficulty in
operation. By 7:30 in the morning of the following day, petitioner Erlinda was intubating the former, and thus the resultant injury could have been avoided.
already being prepared for operation. Upon the request of petitioner Erlinda, her • For his part, Dr. Hosaka mainly contends that the Court erred in finding him
sister-in-law, Cruz, who was then Dean of the College of Nursing at the Capitol negligent as a surgeon by applying the Captain-of-the-Ship doctrine. Dr. Hosaka
Medical Center, was allowed to accompany her inside the operating room. argues that the trend in United States jurisprudence has been to reject said doctrine
• By 10:00 in the morning, when Dr. Hosaka was still not around, petitioner Rogelio in light of the developments in medical practice. He points out that anesthesiology
already wanted to pull out his wife from the operating room. He met Dr. Garcia, and surgery are two distinct and specialized fields in medicine and as a surgeon, he is
who remarked that he was also tired of waiting for Dr. Hosaka. Dr. Hosaka finally not deemed to have control over the acts of Dr. Gutierrez. As anesthesiologist, Dr.
arrived at the hospital more than three (3) hours after the scheduled operation. Cruz, Gutierrez is a specialist in her field and has acquired skills and knowledge in the
who was then still inside the operating room, heard about Dr. Hosaka’s arrival. course of her training which Dr. Hosaka, as a surgeon, does not possess.
While she held the hand of Erlinda, Cruz saw Dr. Gutierrez having a hard time • That there is a trend in American jurisprudence to do away with the Captain-of-the-
intubating the patient. Cruz noticed a bluish discoloration of Erlinda’s nailbeds on Ship doctrine does not mean that this Court will ipso facto follow said trend. Due
her left hand. She (Cruz) then heard Dr. Hosaka instruct someone to call Dr. regard for the peculiar factual circumstances obtaining in this case justify the
Calderon, another anesthesiologist. When he arrived, Dr. Calderon attempted to application of the Captain-of-the-Ship doctrine. From the facts on record it can be
intubate the patient. The nailbeds of the patient remained bluish, thus, she was logically inferred that Dr. Hosaka exercised a certain degree of, at the very least,
placed in a trendelenburg position – a position where the head of the patient is supervision over the procedure then being performed on Erlinda.
placed in a position lower than her feet. • First, it was Dr. Hosaka who recommended to petitioners the services of Dr.
• At almost 3:00 in the afternoon, Cruz saw Erlinda being wheeled to the Intensive Gutierrez. In effect, he represented to petitioners that Dr. Gutierrez possessed the
Care Unit (ICU). The doctors explained to petitioner Rogelio that his wife had necessary competence and skills. Drs. Hosaka and Gutierrez had worked together
bronchospasm. Erlinda stayed in the ICU for a month. She was released from the since 1977. Second, Dr. Hosaka himself admitted that he was the attending
hospital only four months later. Since then, Erlinda remained in comatose condition physician of Erlinda. Thus, when Erlinda showed signs of cyanosis, it was Dr.
until she died in 1999 Hosaka who gave instructions to call for another anesthesiologist and cardiologist to
help resuscitate Erlinda. Third, it is conceded that in performing their
ISSUES & ARGUMENTS responsibilities to the patient, Drs. Hosaka and Gutierrez worked as a team. Their
work cannot be placed in separate watertight compartments because their duties
• W/N Dr. Gutierrez (anesthesiologist) is negligent and hence liable intersect with each other.
• W/N Dr. Hosaka is liable under the Captain of the Ship Doctrine?
Petition partly granted. DLMSC absolved from liability. Drs. Guitierrez and Hosala solidarily liable.
DR. GUTIERREZ NEGLIGENT. DR HOSAKA LIABLE FOR THE ACTS OF

HIS TEAM.
• Dr. Gutierrez’ claim of lack of negligence on her part is belied by the records of the
case. It has been sufficiently established that she failed to exercise the standards of MAUI MORALES
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• Metropolitan owns 3 swimming pools at its filters in Balara, Quezon City is on display in a conspicuous place within the area certain rules and regulations
• It charges the public a certain fee if such wanted to use its pools governing the use of the pools. Appellee employs six lifeguards who are all trained
• Upon hearing this, the lifeguard on duty dove into the pool to retrieve Ong’s lifeless
body. Applying first aid, the lifeguard tried to revive the boy. • The record also shows that when the body of minor Ong was retrieved from the
• Soon after, male nurse Armando Rule came to render assistance, followed by bottom of the pool, the employees of appellee did everything possible to bring him
sanitary inspector Iluminado Vicente who, after being called by phone from the back to life. When they found that the pulse of the boy was abnormal, the inspector
clinic by one of the security guards, boarded a jeep carrying with him the immediately injected him with camphorated oil. When the manual artificial
resuscitator and a medicine kit, and upon arriving he injected the boy with respiration proved ineffective they applied the oxygen resuscitator until its contents
camphorated oil. After the injection, Vicente left on a jeep in order to fetch Dr. were exhausted. And while all these efforts were being made, they sent for Dr.
Ayuyao from the University of the Philippines. Meanwhile, Abaño continued the Ayuyao from the University of the Philippines who however came late because
artificial manual respiration, and when this failed to revive him, they applied the upon examining the body found him to be already dead. All of the foregoing shows
resuscitator until the two oxygen tanks were exhausted that appellee has done what is humanly possible under the circumstances to restore
• Investigation was concluded and the cause of death is asphyxia by submersion in life to minor Ong and for that reason it is unfair to hold it liable for his death
water (pagkalunod)
• The parents of Ong bring this action for damages against Metropolitan, alleging
negligence on the selection and supervision of its employees and if not negligent, The Last Clear Chance Doctrine is inapplicable in this case
they had the last clear chance to revive Ong. • The record does not show how minor Ong came into the big swimming pool. The
• It is to be noted that Metropolitan had complete safety measures in place: they had a only thing the record discloses is that minor Ong informed his elder brothers that he
male nurse, six lifeguards, ring buoys, toy roof, towing line, saving kit and a was going to the locker room to drink a bottle of coke but that from that time on
resuscitator. There is also a sanitary inspector who is in charge of a clinic established nobody knew what happened to him until his lifeless body was retrieved. The
for the benefit of the patrons. Defendant has also on display in a conspicuous place doctrine of last clear chance simply means that the negligence of a claimant does not
certain rules and regulations governing the use of the pools, one of which prohibits preclude a recovery for the negligence of defendant where it appears that the latter,
the swimming in the pool alone or without any attendant. Although defendant does by exercising reasonable care and prudence, might have avoided injurious
not maintain a full- time physician in the swimming pool compound, it has however consequences to claimant notwithstanding his negligence
a nurse and a sanitary inspector ready to administer injections or operate the oxygen • Since it is not known how minor Ong came into the big swimming pool and it being
resuscitator if the need should arise apparent that he went there without any companion in violation of one of the
regulations of appellee as regards the use of the pools, and it appearing that lifeguard
ISSUES & ARGUMENTS Abaño responded to the call for help as soon as his attention was called to it and
• W/N Metropolitan is liable to the Ongs for its negligence immediately after retrieving the body all efforts at the disposal of appellee had been
• W/N the last clear chance doctrine may be invoked in this case put into play in order to bring him back to life, it is clear that there is no room for
the application of the doctrine now invoked by appellants to impute liability to
HOLDING & RATIO DECIDENDI appellee.
No. Metropolitan is not negligent

GINO CAPATI
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118 Anuran, et al. vs. Buno, et. Al.| Bengzon of the jeepney and its owners on the ground that the other driver was likewise guilty
G.R. Nos. L-21353 and L-21354, May 20, 1966 |17 SCRA 224 of negligence.
FACTS
• At noon of January 12, 1958, a passenger jeepney owned by defendant spouses
Pedro Gahol and Luisa Alcantara and driven by defendant Pepito Buno was on its
regular route travelling form Mahabang Ludlud, Taal, Batangas towards the
poblacion of the said municipality. After crossing the bridge, Buno stopped the
jeepney to allow one of the passengers to alight. He parked his jeepney in such a
way that one-half of its width (the left wheels) was on the asphalted pavement of the
road and the other half, on the right shoulder of the said road.
• Thereafter a speeding water truck, owned by defendant spouses Anselmo Maligaya
and Ceferina Aro driven by Guillermo Razon, violently smashed against the parked
jeepney from behind, causing it to turn turtle into a nearby ditch.
• As a result of the collision, three of the jeepney’s passengers died with two others
suffering injuries.
• The suit was instituted by the representatives of the dead and of the injured, to
recover damages from the owners and drivers of both the truck and the jeepney.
• The Batangas CFI rendered judgment absolving the driver of the jeepney and its
owners. On appeal to the CA, the appellate court affirmed the exoneration of the
jeepney driver and of its owners.
ISSUES & ARGUMENTS
W/N the driver and owners of the jeepney should also be made liable?
W/N the “Last Clear Chance” principle is applicable?
YES, THE JEEPNEY OWNERS AND DRIVER ARE ALSO LIABLE
• The obligation of the carrier to transport its passengers safely is such that the Civil
Code requires “utmost diligence” from the carriers who are “presumed to have been at
fault of to have acted negligently, unless they prove that they have observed
extraordinary diligence”. The driver of the jeepney was at fault fo parking the vehicle
improperly.
NO, THE LAST CLEAR CHANCE PRINCIPLE IS NOT APPLICABLE
• The principle about the “last clear chance” would call for application in a suit
between the owners and drivers of the two colliding vehicles. It does not arise
where a passenger demands responsibility from the carrier to enforce its
contractual obligations. For it would be inequitable to exempt the negligent driver
BON ARCILLA
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bridge dentures.
damages awarded.
ISSUES & ARGUMENTS
notwithstanding the allegation that the latter had no curfew pass and thus
drove speedily with his headlights off?
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120 Glan People’s Lumber and Hardware vs NLRC| NARVASA the part of Zacarias, the physical facts would still absolve him of any actionable
G.R. No. 70493 May 18, 1989| responsibility under the rule of the last clear chance.
• From the established facts, the logical conclusion emerges that the driver of the jeep
FACTS has the clear chance to avoid the accident.
• The respondents have admitted that the truck was already at a full stop when the
• Engineer Orlando Calibo, Agripino Roranes and Maximo Patos were on the jeep jeep plowed into it. And they have not seen fit to deny or impugn petitioner’s
owned by the Bacnotan Consolidated Industries Inc. imputation that they also admitted the truck had been brought to a stop while the
• Calibo was driving the car as they were approaching the Lizada Bridge towards the jeep was still 30 meters away. From these facts the logical conclusion emerges that
direction going to Davao City. the driver of the jeep had what judicial doctrine has appropriately called the last clear
• At about that time, Paul Zacarias was driving a truck loaded with cargo. The truck chance to avoid the accident. While still at that distance of thirty meters from the
just crossed the said bridge coming from the opposite direction of Davao City and truck, by stopping in his turn or swerving his jeep away from the truck, either of
bound for Glan, South Cotabato. which the driver of the jeep had sufficient time to do while running at 30 kilometers
• At about 59 yards after crossing the bridge, the jeep and the truck collided and as a per hour.
consequence of which Calibo died while Roranes and Patos sustained physical • In those circumstances, his duty was to seize that opportunity of avoidance, not
injuries. Zacarias was unhurt. merely rely on a supposed right to expect, as the appellate court would have it, the
• A civil suit was filed by the wife of Calibo against Zacarias and the owner of the truck to swerve and leave him in a clear path.
truck • The doctrine of the last clear chance provides as a valid and complete defense to
• At the lower court, the case was dismissed for the plaintiff failed to establish the accident liability today as it did when invoked and applied in the 1918 case of Picart
negligence by preponderance of evidence. The court highlighted that moments vs Smith.
before the collision, the jeep was “zigzagging.”
• Zacarias immediately submitted himself to police investigation while Roranes and
Patos refused to be investigated. Zacarias presented more credible testimony unlike
Roranes and Patos.
• The evidence showed that the path of the truck had skid marks which indicated that
the driver applied brakes. The court accepted the evidence that even if there was
negligence on the part of Zacarias who intruded about 25 centimeters to the lane of
Calibo, the latter still had the last clear chance to avoid the accident.
• The Court of Appeals reversed the decision and ruled in favor of the plaintiff. Ths
was on the grounds that Zacarias saw the jeep already at about 150 meters and
Zacarias did not have a drivers license at the time of the incident. The Appellate
Court opined that Zacarias negligence gave rise to the presumption of negligence on
the part of his employer and their liability is both primary and solidary.
ISSUES & ARGUMENTS
Whether Zacarias should have an actionable responsibility for the accident under the rule
of last clear chance.
No.
• The evidence indicates that it was rather Engineer Calibo’s negligence that was the
proximate cause of the accident. Assuming there was an antecedent negligence on SATURDAY ALCISO
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121 Pantranco North Express, Inc vs Baesa | Cortes • For the last clear chance doctrine to apply, it is necessary to show that the
G.R. Nos. 79050-51| November 14, 1989 person who allegedly has the last opportunity to avert the accident was aware of
the existence of the peril, or should, with exercise of due care, have been aware
FACTS of it. One cannot be expected to avoid an accident or injury if he does not
• The spouses Baesa, their four children, the Ico spouses, the latter’s son and 7 know or could not have known the existence of the peril.
other people boarded a passenger jeep to go to a picnic in Isabela, to celebrate • In this case, there is nothing to show that the jeepney driver David Ico knew of
the 5th wedding anniversary of the Baesa spouses. The jeep was driven by David the impending danger. When he saw at a distance that the approaching bus was
Ico. encroaching on his lane, he did not immediately swerve the jeepney to the dirt
• Upon reaching the highway, the jeep turned right and proceeded to Malalam shoulder on his right since he must have assumed that the bus driver will return
River at a speed of about 20 kph. While they were proceeding towards Malalam the bus to its own lane upon seeing the jeepney approaching form the opposite
River, a speeding PANTRANCO bus from Aparri, on its regular route to direction.
Manila, encroached on the jeepney’s lane while negotiating a curve, and collided • Even assuming that the jeepney driver perceived the danger a few seconds
with it. before the actual collision, he had no opportunity to avoid it. The Court has
• As a result, the entire Baesa family, except for one daughter, as well as David held that the last clear chance doctrine “can never apply where the party
Ico, died, and the rest suffered from injuries. Maricar Baesa, the surviving charged is required to act instantaneously, and if the injury cannot be avoided
daughter, through her guardian filed separate actions for damages arising from by the application of all means at hand after the peril is or should have been
quasi-delict against PANTRANCO. discovered.”
• PANTRANCO, aside from pointing to the late David Ico’s (the driver)alleged
negligence as a proximate cause of the accident, invoked the defense of due
diligence in the selection and supervision of its driver. The RTC ruled in favor
of Baesa, which was upheld by the CA
• The petitioner now contends that the CA erred in not applying the doctrine of
the “last clear chance” against the jeepney driver. Petitioner contends that
under the circumstances, it was the driver of the jeep who had the last clear
chance to avoid the collision and was therefore negligent in failing to utilize
with reasonable care and competence his then existing opportunity to avoid the
harm.
ISSUES & ARGUMENTS

Does the “last clear chance” doctrine apply?
No.
• The doctrine applies only in a situation where the plaintiff was guilty of a prior
or antecedent negligence but the defendant, who had the last fair chance to
avoid the impending harm and failed to do so, is made liable for all the
consequences
• Generally, the last clear change doctrine is invoked for the purpose of making a
defendant liable to a plaintiff who was guilty of prior or antecedent negligence,
although it may also be raised as a defense to defeat claim for damages.
• It is the petitioner’s position that even assuming arguendo, that the bus
encroached into the lane of the jeepney, the driver of the latter could have
swerved the jeepney towards the spacious dirt shoulder on his right without
danger to himself or his passengers. This is untenable
MAGIC MOVIDO
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122 LBC Air Inc, et al v CA, et al| Vitug, J. • From every indication, the proximate cause of the accident was the negligence
G.R. No. 101683 February 23, 1995 of Tano who, despite extremely poor visibility4, hastily executed a left turn
(towards the Bislig airport road entrance) without first waiting for the dust to
FACTS settle. It was this negligent act of Tano, which had placed his vehicle (LBC van)
• At about 11:30 in the morning of 15 November 1987. Rogelio Monterola, a licensed directly on the path of the motorcycle coming from the opposite direction, that
driver, was traveling on board his Suzuki motorcycle towards Mangagoy on the right almost instantaneously caused the collision to occur. Simple prudence required
lane along a dusty national road in Bislig, Surigao del Sur. him not to attempt to cross the other lane until after it would have been safe
from and clear of any oncoming vehicle.
• At about the same time, a cargo van of the LBC Air Cargo Incorporated, driven by
defendant Jaime Tano, Jr., was coming from the opposite direction on its way to the • Petitioners poorly invoke the doctrine of "last clear chance" (also referred to, at
Bislig Airport. On board were passengers Fernando Yu, Manager of LBC Air Cargo, times, as "supervening negligence" or as "discovered peril"). The doctrine, in
and his son who was seated beside Tano. essence, is to the effect that where both parties are negligent, but the negligent
act of one is appreciably later in time than that of the other, or when it is
• When Tano (driver) was approaching the vicinity of the airport road entrance on his impossible to determine whose fault or negligence should be attributed to the
left, he saw two vehicles racing against each other from the opposite direction. Tano incident, the one who had the last clear opportunity to avoid the impending
stopped his vehicle and waited for the two racing vehicles to pass by. The stirred harm and failed to do so is chargeable with the consequences thereof (see Picart
cloud of dust made visibility extremely bad. vs. Smith, 37 Phil. 809). Stated differently, the rule would also mean that an
antecedent negligence of a person does not preclude the recovery of damages
• Instead of waiting for the dust to settle, Tano started to make a sharp left turn for supervening negligence of, or bar a defense against the liability sought by,
towards the airport road. When he was about to reach the center of the right lane, another if the latter, who had the last fair chance, could have avoided the
the motorcycle driven by Monterola suddenly emerged from the dust and smashed impending harm by the exercise of due diligence (Pantranco North Express,
head-on against the right side of the LBC van. Monterola died from the severe Inc. vs. Baesa, 179 SCRA 384; Glan People's Lumber and Hardware vs.
injuries he sustained. Intermediate Appellate Court, 173 SCRA 464).
• A criminal case for "homicide thru reckless imprudence" was filed against Tano. A • In the case at bench, the victim was traveling along the lane where he was
civil suit was likewise instituted by the heirs of deceased Monterola against Tano, rightly supposed to be. The incident occurred in an instant. No appreciable
along with Fernando Yu and LBC Air Cargo Incorporated, for the recovery of time had elapsed, from the moment Tano swerved to his left to the actual
damages. The two cases were tried jointly by the Regional Trial Court impact; that could have afforded the victim a last clear opportunity to avoid the
collision.
• RTC dismissed both cases on the ground that the proximate cause of the "accident"
was the negligence of deceased Rogelio Monterola. • It is true however, that the deceased was not all that free from negligence in
evidently speeding too closely behind the vehicle he was following. We,
• CA Reversed, hence this petition for review therefore, agree with the appellate court that there indeed was contributory
negligence on the victim's part that could warrant a mitigation of petitioners
ISSUES & ARGUMENTS liability for damages.
• W/N Tano’s alleged negligence was the proximate cause of the accident
o <Tano (driver)> Deceased Monterola was contributory negligent, he
even had the “last clear chance” to evade the collision
o <Heirs of Monterola> Proximate cause was negligence of Tano when he

did not wait for the dust to settle
FRANK TAMARGO
HOLDING & RATIO DECIDENDI 4

Q & A portion (TSN) show that he admitted that he could only see big vehicles but not small vehicles like
YES, Tano’s negligence is the proximate cause of the accident. Monterola’s motorcycle through the dust which then has not yet fully settled.
Page 135 of 528
123 Raynera v. Hiceta| Pardo him. He was in control of the situation. His motorcycle was equipped with headlights to
(G.R. No. 120027) (21 April 1999) enable him to see what was in front of him. He was traversing the service road where the
prescribed speed limit was less than that in the highway.
FACTS: Traffic investigator Cpl. Virgilio del Monte testified that two pairs of 50-watts bulbs were
on top of the steel plates, which were visible from a distance of 100 meters Virgilio
• On March 23, 1989, at about 2:00 in the morning, Reynaldo Raynera was on his way Santos admitted that from the tricycle where he was on board, he saw the truck and its
home. He was riding a motorcycle traveling on the southbound lane of East Service cargo of iron plates from a distance of ten (10) meters. In light of these circumstances,
Road, Cupang, Muntinlupa. The Isuzu truck was travelling ahead of him at 20 to 30 an accident could have been easily avoided, unless the victim had been driving too fast
kilometers per hour. The truck was loaded with two (2) metal sheets extended on and did not exercise dues care and prudence demanded of him under the circumstances.
both sides, two (2) feet on the left and three (3) feet on the right. There were two (2) Virgilio Santos' testimony strengthened respondents' defense that it was the victim who
pairs of red lights, about 35 watts each, on both sides of the metal plates. The was reckless and negligent in driving his motorcycle at high speed. The tricycle where
Santos was on board was not much different from the victim's motorcycle that figured in
asphalt road was not well lighted. the accident. Although Santos claimed the tricycle almost bumped into the improperly
• At some point on the road, Reynaldo Raynera crashed his motorcycle into the left parked truck, the tricycle driver was able to avoid hitting the truck.
rear portion of the truck trailer, which was without tail lights. Due to the collision, It has been said that drivers of vehicles "who bump the rear of another vehicle" are
Reynaldo sustained head injuries and he was rushed to the hospital where he was presumed to be "the cause of the accident, unless contradicted by other evidence". The
declared dead on arrival. rationale behind the presumption is that the driver of the rear vehicle has full control of
• Edna Raynera, widow of Reynaldo, filed with the RTC a complaint for damages the situation as he is in a position to observe the vehicle in front of him.
We agree with the Court of Appeals that the responsibility to avoid the collision with the
against respondents Hiceta and Orpilla, owner and driver of the Isuzu truck.
front vehicle lies with the driver of the rear vehicle.
• At the trial, petitioners presented Virgilio Santos. He testified that at about 1:00 and
2:00 in the morning of March 23, 1989, he and his wife went to Alabang, market, on
board a tricycle. They passed by the service road going south, and saw a parked
truck trailer, with its hood open and without tail lights. They would have bumped
the truck but the tricycle driver was quick in avoiding a collision. The place was
dark, and the truck had no early warning device to alert passing motorists.
• Trial court: respondent’s negligence was the immediate and proximate cause of
Raynera’s death.
• CA: The appellate court held that Reynaldo Raynera's bumping into the left rear
portion of the truck was the proximate cause or his death, and consequently,
absolved respondents from liability.
ISSUE:
(a) whether respondents were negligent, and if so,

(b) whether such negligence was the proximate cause of the death of Reynaldo Raynera.
We find that the direct cause of the accident was the negligence of the victim. Traveling
behind the truck, he had the responsibility of avoiding bumping the vehicle in front of DIKKI SIAN
Page 136 of 528

124 Lapanday Agricultural and Development Corporation (LADECO, and crewcab stopped 21 meters from the point of impact. It would not have happened if
Apolonio R. De Ocampo vs. Michael Raymond Angala | Carpio | June 21, 2007 eocampo was not driving very fast.
FACTS Doctrine of Last Clear Chance: Where both parties are negligent but the negligent act
of one is appreciably later than that of the other, or where it is impossible to determine
• Deocampo, while driving a crewcab, bumped into a Chevy owned by respondent whose fault or negligence caused the loss, the one who had the last clear opportunity to
Angala and drivine by Borres. The crewcab was owned by LADECO and was avoid the loss but failed to do so is chargeable with the loss.
assigned to the manager Mendez.
Applied in this case, Deocampo had the last clear chance to avoid the collision.
• Respondent Angala filed an action for quasi-delict, damages, and attorney’s fees Since Deocampo was driving the rear vehicle, he had full control of the situation since he
against LADECO, its administrative officer Berenguel and Deocampo. Angala was in a position to observe the vehicle in front of him. Deocampo had the
alleged that his car was slowing down to about 5-10 kph and was making a left turn responsibility of avoiding bumping the vehicle in front of him. A U-turn is done at a
when it was bumped from behind by the crewcab running at around 60-70 kph. much slower speed to avoid skidding and overturning, compared to running straight
ahead.
• The RTC ruled in favor of Angala, reasoning that the crewcab's speed was the
proximate cause of the accident. It gave merit to the allegation of Angala that the Deocampo could have avoided the vehicle if he was not driving very fast while following
crewcab stopped 21 meters away from the point of impact, and that Deocampo had the pick-up. Deocampo was not only driving fast, he also admitted that he did not step
the last opportunity to avoid the accident. on the brakes even upon seeing the pick-up. He only stepped on the brakes after the
collision.
• On appeal, the CA applied the doctrine of last clear chance and ruled that
Deocampo had the responsibility of avoiding the pick-up. Petitioners are solidarily liable.
ISSUES & ARGUMENTS LADECO alleges that it should not be held jointly and severally liable with Deocampo
• Whether or not the last clear chance doctrine applies? because it exercised due diligence in the supervision and selection of its employees. Aside
• Whether or not petitioner LADECO is solidarily liable with Deocampo. from this statement, LADECO did not proffer any proof to show how it exercised
due diligence in the supervision and selection of its employees. LADECO did not
HOLDING & RATIO DECIDENDI show its policy in hiring its drivers, or the manner in which it supervised its drivers.
LADECO failed to substantiate its allegation that it exercised due diligence in the
Doctrine of Last Clear Chance applies. supervision and selection of its employees.
Both parties were negligent in this case. Borres was at the outer lane when he executed a
U-turn. Following Section 45(b) of RA 41365, Borres should have stayed at the inner lane Petitioners solidarily liable for actual damages and moral damages.
which is the lane nearest to the center of the highway.
However, Deocampo was equally negligent. Borres slowed down the pick-up preparatory
to executing the U-turn. Deocampo should have also slowed down when the pick-up
slowed down. Deocampo could have avoided the crewcab if he was not driving very fast
before the collision, as found by both the trial court and the Court of Appeals. The
5 Sec. 45. Turning at intersections. x x x
(b) The driver of a vehicle intending to turn to the left shall approach such intersection in the lane for traffic to
the right of and nearest to the center line of the highway, and, in turning, shall pass to the left of the center of
the intersection, except that, upon highways laned for traffic and upon one-way highways, a left turn shall be JR RUIZ
made from the left lane of traffic in the direction in which the vehicle is proceeding.
Page 137 of 528
125 Austria v. CA | Quisumbing
G.R. No. 133323, March 9, 2000| 327 SCRA 688
FACTS
• On July 9, 1989 at around 7:00 P.M. along the Olongapo-Gapan Road in the vicinity
of barangay Cabetican, Bacolor, Pampanga, Austria was driving his Ford Fiera with
ten (10) passengers. They came from the Manila International Airport bound to
Dinalupihan, Bataan.
• One of the vehicle's tire suddenly hit a stone lying in the road, which caused Austria
to lose control and collide with the rear of an improperly parked cargo truck trailer
driven by Flores. As a result of the collision, five (5) passengers suffered varying
degrees injuries.
ISSUES & ARGUMENTS

• W/N Austria is guilty of Reckless Imprudence resulting in Serious Physical
Injury.
o Petitioner: Austria argues that the collision was not his fault, rather that of
the driver of the truck, Flores. He asserts the ruling in the case of Phoenix
v. IAC, which had similar facts.
o Respondent: The CA finding of facts reveal that Austria was driving at
speed more than thirty (30) kph. Assuming that he was driving his vehicle
at that speed of thirty (30) kilometers per hour, appellant would have not
lost control of the vehicle after it hit the stone before the collision. Under
these circumstances, the appellant did not exercise the necessary
precaution required of him.
AUSTRIA WAS THE PROXIMATE CAUSE OF THE COLLISION WHICH

LED THE INJURIES OF 4 OF THE PASSENGERS, AND THE DEATH OF
ANOTHER.
• There are indeed similarities in the factual milieu of Phoenix to that of the present
case, we are unable to agree with Austria that the truck driver should be held solely
liable while the petitioner should be exempted from liability. In Phoenix, we ruled
that the driver of the improperly parked vehicle was liable and the driver of the
colliding car contributorily liable. We agree with the respondent court in its
observation on the petitioner's culpability: "That he had no opportunity to avoid the
collision is of his own making and [this] should not relieve him of liability."
• Patently, the negligence of the petitioner as driver of the Ford Fiera is the immediate
and proximate cause of the collision.
JOHAN UY
Page 138 of 528

126 Consolidated Bank and Trust Corp. v. CA and L.C. Diaz and Co., CPA| HOLDING & RATIO DECIDENDI
Carpio NO. The doctrine of last clear chance is not applicable to the present case.
G.R. No. 138569, September 11, 2003 | 410 SCRA 562 • The doctrine of last clear chance states that where both parties are negligent but the
negligent act of one is appreciably later than that of the other, or where it is
FACTS impossible to determine whose fault or negligence caused the loss, the one who had
• Consolidated bank (now known as Solidbank), is a corporation engaged in banking the last clear opportunity to avoid the loss but failed to do so, is chargeable with the
while private respondent LC. Diaz and Co. CPA’s is an accounting partnership. loss. Stated differently, the antecedent negligence of the plaintiff does not preclude
• Diaz opened a savings account with the bank. him from recovering damages caused by the supervening negligence of the
• Diaz, through its cashier, Macaraya, filled up a savings (cash) deposit slip for 900Php defendant, who had the last fair chance to prevent the impending harm by the
and check deposit slip for 50Php. Macarya instructed the messenger Calapre to exercise of due diligence.
deposit it and even gave the latter the passbook. • We do not apply the doctrine of last clear chance to the present case. Solidbank is
• Calapre deposited the money with Solidbank. Since he had to make another deposit liable for breach of contract due to negligence in the performance of its contractual
at another bank, he left the passbook. When he came back, the teller (no. 6) already obligation to L.C. Diaz. This is a case of culpa contractual, where neither the
gave the passbook to someone else. contributory negligence of the plaintiff nor his last clear chance to avoid the loss,
• Macaraya went to Solidbank and deposited another 200,000Php check. The teller would exonerate the defendant from liability.
told Macaraya that she did not remember to whom she gave the passbook. This
teller gave Macaraya a deposit slip dated on that very same day for a deposit of a CA decision affirmed with modification.
90,000Php PBC check of Diaz. This PBC account had been “long closed”.
• The next day, CEO Luis Diaz called up the bank to stop any transaction involving
the stolen passbook. Diaz also learned of the unauthorized withdrawal of 300,000
the same day the passbook was stolen. The withdrawal slip bore the signatures of
Luis and Murillo. They however denied signing the said withdrawal slip. A certain
Noel Tamayo received the money.
• Diaz charged its messenger Ilagan and one Mendoza with Estafa through
falsification of commercial documents but the charges were dismissed.
• Diaz asked Solidbank to give its money back, the latter refused.
• The collection case was ruled in favor of Solidbank. TC used the rules written on
the passbook in absolving the bank saying that “possession of this book (passbook)
shall raise the presumption of ownership and any payments made by the bank upon
the production of the book…shall have the same effect as if made to the depositor
personally.” Tamayo had possession of the passbook at the time of the withdrawal
and also had the withdrawal slip with the needed signatures. The signatures
matched those of the specimen signatures in the bank. TC said that the bank acted
with care and observed the rules on savings account when it allowed the withdrawal
and that Diaz’s negligence was the proximate cause of the loss.
• CA reversed saying that the teller of the bank should have been more careful in
allowing the withdrawal. She should have called up Diaz since the amount was
substantial. Although Diaz was also negligent in allowing a messenger to make its
deposits and said messenger left the passbook, the proximate cause of the loss was
the bank. CA applied the “last clear chance rule”.
ISSUES & ARGUMENTS

• W/N the doctrine of last clear chance is applicable in the case.
CEO OCAMPO
Page 139 of 528
127 Capuno vs. Pepsi-Cola | Makalintal HOLDING & RATIO DECIDENDI
L-19331, April 30, 1965 | 13 SCRA 659
YES, THE ACTION HAS PRESCRIBED.
FACTS
• The case arose from a vehicular collision which occurred on January 3, 1953 in • The civil action for damages could have been commenced by appellants immediately
Apalit, Pampanga. Involved were a Pepsi-Cola delivery truck driven by Jon upon the death of their decedent, Cipriano Capuno, on January 3, 1953 or
Elordi and a private car driven by Capuno. The collision proved fatal to the thereabouts, and the same would not have been stayed by the filing of the criminal
latter as well as to his passengers, the spouses Florencio Buan and Rizalina action for homicide through reckless imprudence. But the complaint here was filed
Paras. only on September 26, 1958, or after the lapse of more than five years.
• Elordi was charged with triple homicide through reckless imprudence in the • In the case of Diocosa Paulan, et al. vs. Zacarias Sarabia, et al., G.R. No. L-10542,
Court of First Instance of Pampanga (criminal case No. 1591). The information promulgated July 31, 1958, this Court held that an action based on a quasi-delict is
was subsequently amended to include claims for damages by the heirs of the governed by Article 1150 of the Civil Code as to the question of when the
three victims. prescriptive period of four years shall begin to run, that is, "from the day (the
• While the criminal case was pending, the Intestate Estate of the Buan spouses action) may be brought," which means from the day the quasi-delict occurred or was
and their heirs filed a civil action, also for damages, in the Court of First committed.
Instance of Tarlac against the Pepsi-Cola Bottling Company of the Philippines • The foregoing considerations dispose of appellants' contention that the four-year
and Jon Elordi (civil case No. 838). Included in the complaint was a claim for period of prescription in this case was interrupted by the filing of the criminal action
indemnity in the sum of P2,623.00 allegedly paid by the Estate to the heirs of against Jon Elordi inasmuch as they had neither waived the civil action nor reserved
Capuno under the Workmen's Compensation Act. the right to institute it separately. Such reservation was not then necessary; without
• On June 11, 1958 the parties in Civil Case No. 838 entered into a "Compromise having made it they could file — as in fact they did — a separate civil action even
and Settlement." For P290,000.00 the Buan Estate gave up its claims for during the pendency of the criminal case (Pacheco v. Tumangday, L-14500, May 25,
damages, including the claim for reimbursement of the sum of P2,623.00 1960; Azucena v. Potenciano, L-14028, June 30, 1962); and consequently, as held in
previously paid to the heirs of Capuno "under the Workmen's Compensation Paulan v. Sarabia, supra, "the institution of a criminal action cannot have the effect of
Act." The Court approved the compromise and accordingly dismissed the case interrupting the institution of a civil action based on a quasi-delict."
on the following June 17.
• At that time the criminal case was still pending; judgment was rendered only on
April 15, 1959, wherein the accused Elordi was acquitted of the charges against
him. Prior thereto, or on September 26, 1958, however, herein appellants
commenced a civil action for damages against the Pepsi-Cola Bottling
Company of the Philippines and Jon Elordi. This is the action which, upon
appellees' motion, was dismissed by the Court a quo in its order of February 29,
1960, from which order the present appeal has been taken.
•
ISSUES & ARGUMENTS
W/N that the action had already prescribed
JAVIN OMPOC
Page 140 of 528
128 Virgilio Callanta vs. Carnation Philippines Inc. |Fernan deprivation of the one's employment committed by the employer in violation of the
G.R. No. 70615, October 28, 1986 | 145 SCRA 268 right of an employee.
FACTS
• Petitioner Virgilio Callanta was terminated by Carnation Phils. on June 1, 1976 for
alleged grounds of serious misconduct and misappropriation of company funds
amounting to P12,000.00, more or less.
• MOLE Regional Director Baterbonia approved the clearance application of
Carnation to terminate Callanta.
• On July 5, 1982, Callanta filed with MOLE a case for illegal dismissal.
• Labor Arbiter Ramos ruled in favor of Callanta and ordered reinstatement.
• Upon appeal to NLRC, it set aside the decision by reason of prescription based on
provisions of the Labor Code which states that:
a) Art. 291. Offenses. — Offenses penalized under this Code and the rules and
regulations issued pursuant thereto shall prescribe in three [3] years.
b) Art. 292. Money claims. — All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three [3]
years from the time the cause of action accrued; otherwise, they shall be forever
barred.
ISSUES & ARGUMENTS

• W/N the case had already prescribed
Petitioner: The law is silent for the prescriptive period for a case of illegal dismissal
hence it should be 4 yrs. under injury of a right
Respondents: Illegal dismissal falls under an offense under the Labor Code and
such prescribes in 3 yrs.
NO. CALLANTA HAS 4 YEARS TO FILE THE CASE UNDER ARTICLE 1146
NCC.
• It has long been established by jurisprudence that one's employment, profession,

trade or calling is a "property right," and the wrongful interference therewith is an
actionable wrong. And the New Civil Code provision provides:
Art. 1146. The following actions must be instituted within four years.
[1] Upon an injury to the lights of the plaintiff.
• Moreover, the Labor Code does not define illegal dismissal as an unlawful practice,
thus it does not fall under Art. 291. The nature of backwages also is not a “money
claim” in the sense that it is not the principal cause of action but the unlawful
MARICE PACHECO
Page 141 of 528

129 Allied Bank vs. CA | (b) whether the third-party defendant would be liable to the plaintiff or to the defendant
G.R. No. 85868. October 13, 1989 | for all or part of the plaintiffs claim against the original defendant, although the third-
party defendant's liability arises out of another transaction; or (c) whether the third-party
FACTS defendant may assert any defense which the third-party plaintiff has, or may have against
• Private respondent Joselito Z. Yujuico obtained a loan from the General Bank and plaintiff s claim. 1
Trust Company (GENBANK) in the amount of Five Hundred Thousand pesos
(P500,000.00), payable on or before April 1, 1977. As evidence thereof, private While the claim of third-party plaintiff, private respondent herein, does not fall under
respondent issued a corresponding promissory note in favor of GENBANK. At the test (c), there is no doubt that such claim can be accommodated under tests (a) and (b)
time private respondent incurred the obligation, he was then a ranking officer of above-mentioned. Whether or not this Court agrees with the petitioner's assertion that
GENBANK and a member of the family owning the controlling interest in the said the claim does not "arise out of the same transaction on which the plaintiff s claim is
bank. based," it cannot be denied that the third-party's claim (although arising out of another
• On March 25,1977, the Monetary Board of the Central Bank issued Resolution No. or different contract or transaction) is connected with plaintiffs claim. Put differently,
675 forbidding GENBANK from doing business in the Philippines. This was there is merit in private respondent's position that if held liable on the promissory note,
followed by Resolution No. 677 issued by the Monetary Board on March 29, 1977 they are seeking, by means of the third-party complaint, to transfer unto the third-party
ordering the liquidation of GENBANK. defendants liability on the note by reason of the illegal liquidation of GENBANK which,
• It appears that in a Memorandum of Agreement dated May 9, 1977 executed by and in the first place, was the basis for the assignment of the promissory note. If there was
between Allied Banking Corporation (ALLIED) and Arnulfo Aurellano as any confusion at all on the ground/s alleged in the third-party complaint, it was the claim
Liquidator of GENBANK, ALLIED acquired all the assets and assumed the of third-party plaintiff for other damages in addition to any amount which he may be
liabilities of GENBANK, which includes the receivable due from private called upon to pay under the original complaint. While these allegations in the proposed
respondent under the promissory note. third-party complaint may cause delay in the disposition of the main suit, it cannot,
• Upon failing to comply with the obligation under the promissory note, petitioner however, be outrightly asserted that it would not serve any purpose.
ALLIED, on February 7, 1979, filed a complaint against private respondent for the As to the issue of prescription, it is the position of petitioner that the cause of action
collection of a sum of money. This case was docketed as Civil Case No. 121474 alleged in the third-party complaint has already prescribed. Being founded on what was
before the then Court of First Instance of Manila (now Regional Trial Court). termed as tortious interference," petitioner asserts that under the applicable provisions of
• Sometime in 1987 and in the course of the proceedings in the court below, private the Civil Code on quasi-delict the action against third-party defendants should have been
respondent, then defendant in the court below, filed a Motion to Admit filed within four (4) years from the date the cause of action accrued
Amended/Supplemental Answer and Third-Party Complaint. Private respondent
sought to implead the Central Bank and Arnulfo Aurellano as third-party
defendants. It was alleged in the third-party complaint that by reason of the tortious
interference by the Central Bank with the affairs of GENBANK, private respondent
was prevented from performing his obligation under the loan such that he should
not now be held liable thereon.
ISSUES & ARGUMENTS

• W/N Arnulfo Arellano and Central Bank are liable for tortious interference
They are liable for tortious interference but the action has already prescribe.
As early as Capayas vs. Court of First Instance of Albay, 11 this Court had already
outlined the tests to determine whether the claim for indemnity in a third-party claim is
"in respect of plaintiff's claim." They are: (a) whether it arises out of the same transaction
on which the plaintiffs claim is based, or whether the third-party's claim, although arising
out of another or different contract or transaction, is connected with the plaintiffs claim; VP PADILLA
Page 142 of 528

130 Arsenio Delos Reyes et al. v. CA | Bellosillo
G.R. No. 121468, January 27, 1998 |
FACTS
• 28 July 1987 RTC dismissed recovery of possession of real property with damages
filed by petitioners against private respondents. 23 January 1995 CA affirmed order
of dismissal.
• 7 July 1942 vendors Delos Reyes sold 10,000sqm to Mercado and Pena out of
13405sqm. 4 June 1943 vendees managed to get a TCT covering whole parcel worth
13405sqm. Pena sold whole property to de Guzman and de Onon, and they in turn
sold the land… until private respondents managed to acquire the current property.
• 3 October 1978 petitioners filed an action for reconveyance over the unsold
3405sqm portion
ISSUES & ARGUMENTS

• W/N An action for reconveyance can prosper if filed more than 30 years
against holder for value?
PETITION DENIED.
• Right is not imprescriptible. There is a time corridor for filing. Art 1141 of Civil
Code provides real actions over 143mmovable’s prescribe after 30 years. Action
initiated only after 36 years. Right has prescribed.
• Even if allowed by law petition still barred by laches as 36 years have passed and
neither the original vendor nor the heirs attempted to restrain the transfer of the
3405sqm
CHRIS PALARCA
Page 143 of 528

131 Ferrer vs. Ericta | Kapunan no such defense was invoked because the defendants had been declared in default,
G.R. No. 129329, July 31, 2001 | 362 SCRA 56 but such rule does not obtain when the evidence shows that the cause of action
upon which plaintiff's complaint is based is already barred by the statute of
FACTS limitations
• Mr. and Mrs. Francis Pfleider were the owners or operators of a Ford pick-up car. • In the present case, there is no issue of fact involved in connection with the
At about 5:00 o'clock in the afternoon of December 31, 1970, their son, defendant question of prescription. Actions for damages arising from physical injuries because
Dennis Pfleider, who was then only sixteen (16) years of age, without proper official of a tort must be filed within four years. 8 The four-year period begins from the day
authority, drove the for pick-up, without due regard to traffic rules and regulations, the quasi-delict is committed or the date of the accident
and without taking the necessary precaution to prevent injury to persons or damage
to property. The pickup car was overturned, causing physical injuries to plaintiff
Annette Ferrer, who was then a passenger therein, which injuries paralyzed her and
required medical treatment and confinement at different hospitals for more than
two (2) years; that as a result of the physical injuries sustained by Annette, she
suffered unimaginable physical pain, mental anguish, and her parents also suffered
mental anguish, moral shock and spent a considerable sum of money for her
treatment.
• The complaint was only filed on January 5, 1975.
• At the pre-trial on May 12, 1975, only Ferrer and counsel were present. As such the
Pfleiders were declared in default and the court rendered judgment against them.
• Upon filing a motion for reconsideration, respondent judge, without setting aside
the order of default, issued an order absolving defendants from any liability on the
grounds that: (a) the complaint states no cause of action because it does not allege
that Dennis Pfleider was living with his parents at the time of the vehicular accident,
considering that under Article 2180 of the Civil Code, the father and, in case of his
death or incapacity the mother, are only responsible for the damages caused by their
minor children who live in their company; and (b) that the defense of prescription is
meritorious, since the complaint was filed more than four (4) years after the date of
the accident, and the action to recover damages based on quasi-delict prescribes in
four (4) years. Hence, the instant petition for mandamus.
ISSUES & ARGUMENTS

W/N the defense of prescription had been deemed waived by private respondents'
failure to allege the same in their answer.
NO. DEFENSE OF PRESCRIPTION NOT DEEMED WAIVED.

• Where the answer does not take issue with the complaint as to dates involved in the
defendant's claim of prescription, his failure to specifically plead prescription in the
answer does not constitute a waiver of the defense of prescription. The defense of
prescription, even if not raised in a motion to dismiss or in the answer, is not
deemed waived unless such defense raises issues of fact not appearing upon the
preceding pleading
• It is true that the defense of prescription can only be considered if the same is
invoked as such in the answer of the defendant and that in this particular instance JAN PORTER
Page 144 of 528

132 Kramer, Jr. vs. CA | Gancayco, J.: • Aggrieved party need not wait for a determination by an administrative body that
G.R. No. 83524, October 13, 1989 | 178 SCRA 518 the collision was caused by fault or negligence of the other party before he can file
action for damages
FACTS
• On April 8, 1976, F/B Marjolea, a fishing boat owned by petitioners Ernest Kramer, Petition is DISMISSED.
Jr. and Marta Kramer was navigating its way from Marinduque to Manila.
• Somewhere near the Maricabon Island and Cape Santiago, the boat figured in a
collision with an inter-island vessel (M/V Asia Philippines) owned by Trans-Asia
Shipping Lines, Inc.
• Due to the collision, F/B Marjolea sank, taking along its fish catch.
• The captains of both vessels filed a protest with the Board of Marine Inquiry of the
Philippine Coast Guard for the purpose of determining the proximate cuase of the maritime
collision
• On October 19, 1981, the Board concluded that the collision was due to the
negligence of the employees of private respondent (Trans-Asia).
• On the basis of such decision, the Philippine Coast Guard, on April 29, 1982,
suspended M/V Asia Philippines from pursuing his profession as a marine officer.
• On May 30,1985, petitioners filed a complaint for damages in the RTC, Pasay City.
• Private respondent filed a MTD on the ground of prescription based on Art. 1146
of the Civil Code which provides, ‘An action based upon quasi-delict must be
instituted within 4 years from the day the quasi-delcit was committed.
• The RTC denied the MTD on the basis of the Board’s resolution that there was a
need to rely on highly technical aspects attendant to such collision, hence, the
prescriptive period under the law should begin to run only from April 29, 1982, the
date when the negligence of the crew of M/V Asia Philippines had been finally
ascertained.
• On appeal to the CA, the said court reversed the RTC’s decision and granted the
MTD, hence the present petition for certiorari and prohibition.
ISSUES & ARGUMENTS

W/N a complaint for damages instituted by the petitioners against the private
respondent arising from a marine collision is barred by the statute of limitations
YES.
• The right of action accrues when there exists a cause of action, which consists of 3
elements, namely:
o A right in favor of the plaintiff by whatever means and under
whatever law it arises or is created
o An obligation on the part of defendant to respect such right
o An act or omission on the part of such defendant violative of the right
of the plaintiff
• The occurrence of the last element is the time when the cause of action arise CEO OCAMPO
Page 145 of 528

133 Bayacen vs. CA | charged has not been proven beyond reasonable doubt. He is, therefore, entitled to
| 103 SCRA 197 acquittal.
FACTS
• On the morning of August 15, 1963, Saturnino Bayasen, the Rural Health Physician
in Sagada, Mountain Province, went to barrio Ambasing to visit a patient.
• Two nurses from the Saint Theodore's Hospital in Sagada, viz., Elena Awichen and
Dolores Balcita, rode with him in the jeep assigned for the use of the Rural Health
Unit as they had requested for a ride to Ambasing.
• Later, at Ambasing, the girls, who wanted to gather flowers, again asked if they
could ride with him up to a certain place on the way to barrio Suyo which he
intended to visit anyway. Dr. Bayasen again allowed them to ride, Elena sitting
herself between him and Dolores.
• On the way, at barrio Langtiw, the jeep went over a precipice About 8 feet below
the road, it was blocked by a pine tree. The three were thrown out of the jeep. Elena
was found lying in a creek further below. Among other injuries, she suffered a skull
fracture which caused her death.
• Bayasen was charged in December 1963 by the Provincial Fiscal of Mountain
Province of the crime of Homicide Thru Reckless Imprudence.
• After trial, the Bayasen was found guilty of the charge and was sentenced to an
indeterminate penalty.
ISSUE
W/N Bayasen was negligent?
• The proximate cause of the tragedy was the skidding of the rear wheels of the jeep
and not the "unreasonable speed" of the Bayasen because there is no evidence on
record to prove or support the finding that the Bayasen was driving at "an
unreasonable speed".
• It is a well known physical tact that cars may skid on greasy or slippery roads, as in
the instant case, without fault on account of the manner of handling the car.
Skidding means partial or complete loss of control of the car under circumstances
not necessarily implying negligence. It may occur without fault.
• No negligence as a matter of law can, therefore, be charged to the Bayasen. In fact,
the moment he felt that the rear wheels of the jeep skidded, he promptly drove it to
the left hand side of the road, parallel to the slope of the mountain, because as he
said, he wanted to play safe and avoid the embankment.
• Under the particular circumstances of the instant case, Bayasen who skidded could
not be regarded as negligent, the skidding being an unforeseen event, so that the
Bayasen had a valid excuse for his departure from his regular course. The negligence
of the Bayasen not having been sufficiently established, his guilt of the crime
BYRON PEREZ
Page 146 of 528

134 NAPOCOR v. CA | Nocon • The act of God doctrine strictly requires that the act must be occasioned solely by
G.R. No. 96410, July 3, 1992 | 211 SCRA 162 the violence of nature. Human intervention is to be excluded from creating or
entering into the cause of the mischief. When the effect is found to be in part the
FACTS result of the participation of man, whether due to his active intervention or neglect
• In the early morning hours of October 27, 1978, at the height of typhoon "Kading", or failure to act, the whole occurrence is then humanized and removed from the
a massive flood covered the towns near Angat Dam, causing several deaths and the rules applicable to the acts of God.
loss and destruction of properties of the people residing near the Angat River. o Rainfall was classified only as moderate and couldn’t’ have caused
Private respondents are residents of such area. They were awakened by the sound of flooding.
rampaging water all around them. The water came swiftly and strongly that before o Despite announcements of the coming of a powerful typhoon, the
they could do anything to save their belongings, their houses had submerged, some water level was maintained at its maximum.
even swept away by the strong current.. • When the negligence of a person concurs with an act of God producing a loss, such
• Private respondents blamed the sudden rush of water to the reckless and imprudent person is not exempt from liability by showing that the immediate cause of the
opening of all the three (3) floodgates of the Angat Dam spillway, without prior damage was the act of God. To be exempt he must be free from any previous
warning to the people living near or within the vicinity of the dam. negligence or misconduct by which the loss or damage may have been occasioned.
• Petitioners denied private respondents' allegations and contended that they have
maintained the water in the Angat Dam at a safe level and that the opening of the
spillways was done gradually and after all precautionary measures had been taken.
Petitioner NPC further contended that it had always exercised the diligence of a
good father in the selection of its officials and employees and in their supervision. It
also claimed that written warnings were earlier sent to the towns concerned. At the
time typhoon "Kading" hit Bulacan with its torrential rain, a great volume of flood
water flowed into the dam's reservoir necessitating the release of the water therein in
order to prevent the dam from collapsing and causing the loss of lives and
tremendous damage to livestock and properties.
• Petitioners further contended that there was no direct causal relationship between
the alleged damages suffered by the respondents and the acts and omissions
attributed to the former. That it was the respondents who assumed the risk of
residing near the Angat River, and even assuming that respondents suffered
damages, the cause was due to a fortuitous event and such damages are of the nature
and character of damnum absque injuria, hence, respondents have no cause of action
against them.
• The Trial Court awarded damages, interest, and attorney’s fees. The CA affirmed
such ruling.
ISSUE
• W/N the injury caused to private respondents was due to fortuitous event.
• No. Act of God or force majeure, by definition, are extraordinary events not
foreseeable or avoidable, events that could not be foreseen, or which, though
foreseen, are inevitable. It is not enough that the event should not have been
foreseen or anticipated, as is commonly believed, but it must be one impossible to
foresee or to avoid. As a general rule, no person shall be responsible for those
AYEN QUA
events which could not be foreseen or which though foreseen, were inevitable.
Page 147 of 528
135 NAPOCOR vs. CA|Nocon • The court does not agree with the petitioners that the decision handed down in Juan
G.R. No. 96410,July 3, 1992| F. Nakpil & Sons, supra, is not applicable to the present case. The doctrine laid down
in the said case is still good law, as far as the concurrent liability of an obligor in case
FACTS of a force majeure, is concerned.
• Petition for review on certiorari instituted by the National Power Corporation • The case of National Power Corp. v. Court of Appeals, as a matter of fact, reiterated the
(NPC)from the decision of the Court of Appeals . The appellate court affirmed in ruling in Juan F. Nakpil & Sons. In the former case, this Court ruled that the obligor
toto the decision of the Regional Trial Court of Malolos, Bulacan, which awarded cannot escape liability, if upon the happening of a fortuitous event or an act of God,
damages, interest, attorney's fees and litigation expenses against petitioners a corresponding fraud, negligence, delay or violation or contravention in any manner
• It appears that in the early morning hours of October 27, 1978, at the height of of the tenor of the obligation as provided in Article 1170 of the Civil Code which
typhoon "Kading", a massive flood covered the towns near Angat Dam, particularly results in loss or damage.
the town of Norzagaray, causing several deaths and the loss and destruction of • However, the principle embodied in the act of God doctrine strictly requires that the
houses, farms, plants, working animals and other properties of the people residing act must be occasioned solely by the violence of nature. Human intervention is to be
near the Angat River. excluded from creating or entering into the cause of the mischief. When the effect is
• Private respondents recalled that on the said day, they were awakened by the sound found to be in part the result of the participation of man, whether due to his active
of rampaging water all around them. The water came swiftly and strongly that intervention or neglect or failure to act, the whole occurrence is then humanized and
before they could do anything to save their belongings, their houses had submerged, removed from the rules applicable to the acts of God. 9
some even swept away by the strong current. A number of people were able to save • In the case at bar, although the typhoon "Kading" was an act of God, petitioners
their lives only by climbing trees. can not escape liability because their negligence was the proximate cause of the loss
• Private respondents blamed the sudden rush of water to the reckless and imprudent and damage.
opening of all the three (3) floodgates of the Angat Dam spillway, without prior • The evidence shows that as early as October 25, 1978 the newspapers had
warning to the people living near or within the vicinity of the dam. announced the expected occurrence of a powerful typhoon code-named "Kading".
On October 26, 1978, Bulletin Today had as its headline the coming of the typhoon.
ISSUES & ARGUMENTS Despite these announcements, the water level in the dam was maintained at its
W/N NAPOCOR is liable. maximum from October 21, until midnight of October 26, 1978.
o Petitioners: Denied private respondents' allegations and, by way of • WHEREFORE, finding no reversible error in the Decision appealed from, the same
defense, contended that they have maintained the water in the Angat is hereby affirmed in toto, with cost against petitioner.
Dam at a safe level and that the opening of the spillways was done
gradually and after all precautionary measures had been taken.
Petitioner NPC further contended that it had always exercised the
diligence of a good father in the selection of its officials and
employees and in their supervision. It also claimed that written
warnings were earlier sent to the towns concerned. Petitioners further
contended that there was no direct causal relationship between the
alleged damages suffered by the respondents and the acts and
omissions attributed to the former. That it was the respondents who
assumed the risk of residing near the Angat River, and even assuming
that respondents suffered damages, the cause was due to a fortuitous
event and such damages are of the nature and character of damnum
absque injuria, hence, respondents have no cause of action against
them.
NAPOCOR LIABLE.
DEANNE REYES
Page 148 of 528

136 Philippine Airlines Inc. vs CA| Regalado damages in this particular case and under the facts obtaining herein is its blatant
GR No. 120262 July 17, 1997| refusal to accord the so-called amenities equally to all its stranded passengers who
were bound for Surigao City. No compelling or justifying reason was advanced for
FACTS such discriminatory and prejudicial conduct.
• More importantly, it has been sufficiently established that it is petitioner's standard
• On October 23, 1988, private respondent Pantejo, then City Fiscal of Surigao City, company policy, whenever a flight has been cancelled, to extend to its hapless
boarded a PAL plane in Manila and disembarked in Cebu City where he was passengers cash assistance or to provide them accommodations in hotels with which
supposed to take his connecting flight to Surigao City However, due to typhoon it has existing tie-ups. In fact, petitioner's Mactan Airport Manager for departure
Osang, the connecting flight to Surigao City was cancelled. services, Oscar Jereza, admitted that PAL has an existing arrangement with hotels to
• To accommodate the needs of its stranded passengers, PAL initially gave out cash accommodate stranded passengers, and that the hotel bills of Ernesto Gonzales
assistance of P100.00 and, the next day, P200.00, for their expected stay of two days were reimbursed obviously pursuant to that policy.
in Cebu.
• Respondent Pantejo requested instead that he be billeted in a hotel at PAL’s expense
because he did not have cash with him at that time, but PAL refused.
• Thus, respondent Pantejo was forced to seek and accept the generosity of a co-
passenger, an engineer named Andoni Dumlao, and he shared a room with the latter
at Sky View Hotel with the promise to pay his share of the expenses upon reaching
Surigao.
• On October 25, 1988 when the flight for Surigao was resumed, respondent Pantejo
came to know that the hotel expenses of his co-passengers, one Superintendent
Ernesto Gonzales and a certain Mrs. Gloria Rocha, an auditor of the Philippine
National Bank, were reimbursed by PAL.
• At this point, respondent Pantejo informed Oscar Jereza, PAL’s Manager for
Departure Services at Mactan Airport and who was in charge of cancelled flights,
that he was going to sue the airline for discriminating against him. It was only then
that Jereza offered to pay respondent Pantejo P300.00 which, due to the ordeal and
anguish he had undergone, the latter decline.
ISSUES & ARGUMENTS

• W/N PAL can establish the defense of force majeure.
Yes.
• PAL can establish the defense of force majeure but it is still liable for damages.
• Petitioner theorizes that the hotel accommodations or cash assistance given in case a
flight is cancelled is in the nature of an amenity and is merely a privilege that may be
extended at its own discretion, but never a right that may be demanded by its
passengers. Thus, when respondent Pantejo was offered cash assistance and he
refused it, petitioner cannot be held liable for whatever befell respondent Pantejo on
that fateful day, because it was merely exercising its discretion when it opted to just
give cash assistance to its passengers.
• Assuming arguendo that the airline passengers have no vested right to these amenities
in case a flight is cancelled due to force majeure, what makes petitioner liable for SATURDAY ALCISO
Page 149 of 528

137 Cipriano vs. CA |
G.R. No. | 263 SCRA 711
FACTS
• Cipriano is engaged in rust-roofing of vehicles (Mobilkote) and a restaurant

(Lambat) situated adjointly. On a relevant date, an employee of Maclin Electronics
brought a Kia Pride to him for such service, which the latter should have claimed on
a certain time after the service but failed to do so.
• Cipriano then kept the same in the inner garage to safeguard against theft. However
fire broke out from Cipriano’s adjoined restaurant, which then burned the premises
of Mobilkote, including the Kia car.
• Private respondent then sued for damages which Cipriano denied since there was
delay in the claim of the car. CA upheld liability by reason of Cipriano’s failure to
observe mandate of PD 1572.
ISSUES & ARGUMENTS

• W/N Cipriano could be held liable for damages despite the fire being a caso
fortuito.
YES. CIPRIANO LIABLE.
• Violation of a statutory duty is negligence. His failure to insure the cars under his
service and the service he renders under the DTI is a condition precedent for his
operations. Although the fire is a fortuitous event, the circumstance given as neglect
of duty cannot exempt petitioner from the loss.
JOY ADRANEDA
Page 150 of 528

138 Yobido vs. CA| Romero ISSUES & ARGUMENTS
G.R. No. 113003 October 17, 1997 |SCRA • W/N the explosion of a newly installed tire of a passenger vehicle is a
fortuitous event that exempts the carrier from liability for the death of a
FACTS passenger.
• Spouses Tito and Leny Tumboy and their minor children named Ardee and o Tumboys: The violation of the contract of carriage between them and the
Jasmin, boarded a Yobido Liner bus. defendants was brought about by the driver’s failure to exercise the diligence
• The left front tire of the bus exploded. The bus fell into a ravine around three (3) required of the carrier in transporting passengers safely to their place of
feet from the road and struck a tree. destination.
• The incident resulted in the death of 28-year-old Tito Tumboy and physical injuries o Leny Tumboy: Since it was “running fast,” she cautioned the driver to slow
to other passengers. down but he merely stared at her through the mirror.
• A complaint for breach of contract of carriage, damages and attorney’s fees was filed by Leny o Salce (bus conductor): he bus was running at a speed of “60 to 50” and that it
and her children against Alberta Yobido, the owner of the bus, and Cresencio was going slow because of the zigzag road. The left front tire that exploded
Yobido, its driver was a “brand new tire” that he mounted on the bus on April 21, 1988 or only
• TC dismissed the petition for lack of merit, because it said the tire blowout was “a five (5) days before the incident. The Yobido Liner secretary, Minerva
caso fortuito which is completely an extraordinary circumstance independent of the Fernando, bought the new Goodyear tire from Davao Toyo Parts on April 20,
will” of the defendants who should be relieved of “whatever liability the plaintiffs 1988. The tire blowout that caused the death of Tito Tumboy was a caso fortuito.
may have suffered by reason of the explosion pursuant to Article 11746 of the Civil
Code.” HOLDING & RATIO DECIDENDI
• CA reversed the decision of the TC. No. The explosion of a newly installed tire of a passenger vehicle is not a fortuitous
o “To Our mind, the explosion of the tire is not in itself a fortuitous event. The event that exempts the carrier from liability for the death of a passenger.
cause of the blow-out, if due to a factory defect, improper mounting, excessive
tire pressure, is not an unavoidable event. On the other hand, there may have On the Presumption of Negligence:
been adverse conditions on the road that were unforeseeable and/or inevitable, • Based on Art. 1756 of the CC7, when a passenger is injured or dies while travelling,
which could make the blow-out a caso fortuito. The fact that the cause of the the law presumes that the common carrier is negligent.
blow-out was not known does not relieve the carrier of liability. • This disputable presumption may only be overcome by evidence that the carrier had
o The fact that the cause of the blow-out was not known does not relieve the observed extraordinary diligence as prescribed by Articles 17338, 1755 and 1756 of
carrier of liability. Owing to the statutory presumption of negligence against the Civil Code or that the death or injury of the passenger was due to a fortuitous
the carrier and its obligation to exercise the utmost diligence of very cautious event.
persons to carry the passenger safely as far as human care and foresight can
provide, it is the burden of the defendants to prove that the cause of the blow- On Caso Fortuito:
out was a fortuitous event.” • Yobido’s contention that they should be exempt from liability because the tire
o As enunciated in Necesito vs. Paras, the passenger has neither choice nor control blowout was no more than a fortuitous event that could not have been foreseen,
over the carrier in the selection and use of its equipment, and the good repute must fail.
of the manufacturer will not necessarily relieve the carrier from liability. • A fortuitous event is possessed of the following characteristics:
7 “Art. 1756. In case of death or injuries to passengers, common carriers are presumed to have been at fault or
to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles
1733 and 1755.”
8 Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported
by them, according to all the circumstances of each case.
6 Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and
when the nature of the obligation requires the assumption of risk, no person shall be responsible for those 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in
events which could not be foreseen, or which, though foreseen, were inevitable. articles 1755 and 1756.
Page 151 of 528
o The cause of the unforeseen and unexpected occurrence, or the failure of
the debtor to comply with his obligations, must be independent of human
will;
o It must be impossible to foresee the event which constitutes the caso
fortuito, or if it can be foreseen, it must be impossible to avoid;
o The occurrence must be such as to render it impossible for the debtor to
fulfill his obligation in a normal manner; and
o The obligor must be free from any participation in the aggravation of the
injury resulting to the creditor.
• Under the circumstances of this case, the explosion of the new tire may not be
considered a fortuitous event. There are human factors involved in the situation.
The fact that the tire was new did not imply that it was entirely free from
manufacturing defects or that it was properly mounted on the vehicle
• It is settled that an accident caused either by defects in the automobile or
through the negligence of its driver is not a caso fortuito that would exempt
the carrier from liability for damages.
Proof of Diligence is Essential:

• Moreover, a common carrier may not be absolved from liability in case of force
majeure or fortuitous event alone. The common carrier must still prove that it
was not negligent in causing the death or injury resulting from an accident.
• They failed to rebut the testimony of Leny Tumboy that the bus was running so fast
that she cautioned the driver to slow down. These contradictory facts must,
therefore, be resolved in favor of liability in view of the presumption of negligence
of the carrier in the law.
• The Yobidos should have shown that it undertook extraordinary diligence in the
care of its carrier, such as conducting daily routinary check-ups of the vehicle’s parts.
NICO CRISOLOGO
Page 152 of 528

139 Japan Airlines vs. Court of Appeals | Romero, J.
G.R. No. 118664, August 7, 1998 | 294 SCRA 19 ISSUES & ARGUMENTS
W/N the JAL, as a common carrier has the obligation to shoulder the hotel and meal
FACTS expenses of its stranded passengers until they have reached their final destination, even if
• On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL 001 the delay were caused by "force majeure."
in San Francisco, California bound for Manila. Likewise, on the same day private
respondents Enrique Agana, Maria Angela Nina Agana and Adelia Francisco left HOLDING & RATIO DECIDENDI
Los Angeles, California for Manila via JAL flight No. JL 061. As an incentive for • We are not unmindful of the fact that in a plethora of cases we have consistently
travelling on the said airline, both flights were to make an overnight stopover at ruled that a contract to transport passengers is quite different in kind, and degree
Narita, Japan, at the airlines' expense, thereafter proceeding to Manila the following from any other contractual relation. It is safe to conclude that it is a relationship
day. imbued with public interest. Failure on the part of the common carrier to live up to
• Upon arrival at Narita, Japan on June 14, 1991, private respondents were billeted at the exacting standards of care and diligence renders it liable for any damages that
Hotel Nikko Narita for the night. The next day, private respondents, on the final leg may be sustained by its passengers. However, this is not to say that common carriers
of their journey, went to the airport to take their flight to Manila. However, due to are absolutely responsible for all injuries or damages even if the same were caused
the Mt. Pinatubo eruption, unrelenting ashfall blanketed Ninoy Aquino by a fortuitous event. To rule otherwise would render the defense of "force
International Airport (NAIA), rendering it inaccessible to airline traffic. Hence, majeure," as an exception from any liability, illusory and ineffective.
private respondents' trip to Manila was cancelled indefinitely. • Accordingly, there is no question that when a party is unable to fulfill his obligation
• To accommodate the needs of its stranded passengers, JAL rebooked all the Manila- because of "force majeure," the general rule is that he cannot be held liable for
bound passengers on flight No. 741 due to depart on June 16, 1991 and also paid damages for non-performance. 6 Corollarily, when JAL was prevented from
for the hotel expenses for their unexpected overnight stay. On June 16, 1991, much resuming its flight to Manila due to the effects of Mt. Pinatubo eruption, whatever
to the dismay of the private respondents, their long anticipated flight to Manila was losses or damages in the form of hotel and meal expenses the stranded passengers
again cancelled due to NAIA's indefinite closure. At this point, JAL informed the incurred, cannot be charged to JAL. Yet it is undeniable that JAL assumed the hotel
private respondents that it would no longer defray their hotel and accommodation expenses of respondents for their unexpected overnight stay on June 15, 1991.
expense during their stay in Narita. • Admittedly, to be stranded for almost a week in a foreign land was an exasperating
• Since NAIA was only reopened to airline traffic on June 22, 1991, private experience for the private respondents. To be sure, they underwent distress and
respondents were forced to pay for their accommodations and meal expenses from anxiety during their unanticipated stay in Narita, but their predicament was not due
their personal funds from June 16 to June 21, 1991. Their unexpected stay in Narita to the fault or negligence of JAL but the closure of NAIA to international flights.
ended on June 22, 1991 when they arrived in Manila on board JL flight No. 741. Indeed, to hold JAL, in the absence of bad faith or negligence, liable for the
• Obviously, still reeling from the experience, private respondents, on July 25, 1991, amenities of its stranded passengers by reason of a fortuitous event is too much of a
commenced an action for damages against JAL before the Regional Trial Court of burden to assume.
Quezon City, Branch 104. 2 To support their claim, private respondents asserted • Furthermore, it has been held that airline passengers must take such risks incident to
that JAL failed to live up to its duty to provide care and comfort to its stranded the mode of travel. 7 In this regard, adverse weather conditions or extreme climatic
passengers when it refused to pay for their hotel and accommodation expenses from changes are some of the perils involved in air travel, the consequences of which the
June 16 to 21, 1991 at Narita, Japan. In other words, they insisted that JAL was passenger must assume or expect. After all, common carriers are not the insurer of
obligated to shoulder their expenses as long as they were still stranded in Narita. On all risks. 8
the other hand, JAL denied this allegation and averred that airline passengers have • The reliance is misplaced. The factual background of the PAL case is different from
no vested right to these amenities in case a flight is cancelled due to "force majeure." the instant petition. In that case there was indeed a fortuitous event resulting in the
• On June 18, 1992, the trial court rendered its judgment in favor of private diversion of the PAL flight. However, the unforeseen diversion was worsened when
respondents holding JAL liable for damages "private respondents (passenger) was left at the airport and could not even hitch a
• Undaunted, JAL appealed the decision before the Court of Appeals, which, ride in a Ford Fiera loaded with PAL personnel," 10 not to mention the apparent
however, with the exception of lowering the damages awarded affirmed the trial apathy of the PAL station manager as to the predicament of the stranded
court's finding, 3 thus: passengers. 11 In light of these circumstances, we held that if the fortuitous event
• JAL filed a motion for reconsideration which proved futile and was accompanied by neglect and malfeasance by the carrier's employees, an action
unavailing. 4 for damages against the carrier is permissible. Unfortunately, for private
• Failing in its bid to reconsider the decision, JAL has now filed this instant petition. respondents, none of these conditions are present in the instant petition.
Page 153 of 528
• We are not prepared, however, to completely absolve petitioner JAL from any
liability. It must be noted that private respondents bought tickets from the United
States with Manila as their final destination. While JAL was no longer required to
defray private respondents' living expenses during their stay in Narita on account of
the fortuitous event, JAL had the duty to make the necessary arrangements to
transport private respondents on the first available connecting flight to Manila.
Petitioner JAL reneged on its obligation to look after the comfort and convenience
of its passengers when it declassified private respondents from "transit passengers"
to "new passengers" as a result of which private respondents were obliged to make
the necessary arrangements themselves for the next flight to Manila. Private
respondents were placed on the waiting list from June 20 to June 24. To assure
themselves of a seat on an available flight, they were compelled to stay in the airport
the whole day of June 22, 1991 and it was only at 8:00 p.m. of the aforesaid date that
they were advised that they could be accommodated in said flight which flew at
about 9:00 a.m. the next day.
• We are not oblivious to the fact that the cancellation of JAL flights to Manila from
June 15 to June 21, 1991 caused considerable disruption in passenger booking and
reservation. In fact, it would be unreasonable to expect, considering NAIA's closure,
that JAL flight operations would be normal on the days affected. Nevertheless, this
does not excuse JAL from its obligation to make the necessary arrangements to
transport private respondents on its first available flight to Manila. After all, it had a
contract to transport private respondents from the United States to Manila as their
final destination.
• Consequently, the award of nominal damages is in order. Nominal damages are
adjudicated in order that a right of a plaintiff, which has been violated or invaded by
the defendant, may be vindicated or recognized and not for the purpose of
indemnifying any loss suffered by him. 12 The court may award nominal damages in
every obligation arising from any source enumerated in article 1157, or in every case
where any property right has been invaded. 13
JAY DUHAYLONGSOD
Page 154 of 528

140 Gotesco Investment Corporation vs. Chatto | Davide
G.R. No. 87584, June 16, 1992 | 210 SCRA 18 • Gotesco could have easily discovered the cause of the collapse if indeed it were due
to force majeure. The real reason why Mr. Ong could not explain the cause is because
FACTS either he did not actually conduct an investigation or because he is incompetent (not
• Gloria E. Chatto and her 15-year old daughter Lina went to see the movie “Mother an engineer, but an architect who had not even passed the government’s
Dear” at Superama I theater, owned by Gotesco Investment Corporation. They examination).
bought balcony tickets but even then were unable to find seats considering the • The building was constructed barely 4 years prior to the accident. It was not shown
number of people patronizing the movie. Hardly 10 minutes after entering the that any of the causes denominated as force majeure obtained immediately before or at
theater, the ceiling of the balcony collapsed and pandemonium ensued. the time of the collapse of the ceiling. Such defects could have been discovered if
• The Chattos managed to crawl under the fallen ceiling and walk to the nearby FEU only Gotesco exercised due diligence and care in keeping and maintaining the
hospital where they were confined and treated for a day. Later, they had to transfer premises. But, as disclosed by Mr. Ong, no adequate inspection of the premises
to UST hospital, and because of continuing pain in the neck, headache, and before the date of the accident.
dizziness, had to even go to Illinois, USA for treatment. • That the structural designs and plans of the building were duly approved by the City
• Gotesco tried to avoid liability by alleging that the collapse was due to force Engineer and the building permits and certificate of occupancy were issued do not
majeure. It maintained that its theater did not suffer from any structural or at all prove that there were no defects in the construction, especially as regards the
construction defect. The trial court awarded actual/compensatory and moral ceiling, considering that no testimony was offered to prove that it was ever
damages and attorney’s fees in favor of the Chattos. The CA also found Gotesco’s inspected at all.
appeal to be without merit. Hence this petition. • And even assuming arguendo that the cause of the collapse was due to force majeure,
Gotesco would still be liable because the trial court declared it to be guilty of gross
ISSUES & ARGUMENTS negligence. As gleaned from Bouvier’s definition, for one to be exempt from any
• W/N the cause of the collapse of the balcony ceiling was force majeure liability because of it, he must have exercised care, i.e., he should not have been
guilty of negligence.
COLLAPSE OF THE BALCONY CEILING NOT DUE TO FORCE MAJEURE.

GOTESCO LIABLE.
• Gotesco’s claim that the collapse of the ceiling of the theater was due to force
majeure is not even founded on facts because its own witness, Mr. Ong, admitted
that he could not give any reason for the collapse. Having interposed it as a defense,
it had the burden to prove that the collapse was indeed caused by force majeure. It
could not have collapsed without a cause. That Mr. Ong could not offer any
explanation does not imply force majeure.
• Spanish and American authorities on the meaning of force majeure:
Inevitable accident or casualty; an accident produced by any physical cause which is

irresistible; such as lightning, tempest, perils of the sea, inundation, or earthquake;
the sudden illness or death of a person. [Blackstone]
The event which we could neither foresee nor resist; as, for example, the lightning
stroke, hail, inundation, hurricane, public enemy, attack by robbers; [Esriche]
Any accident due to natural causes, directly, exclusively, without human

intervention, such as could not have been prevented by any kind of oversight, pains,
and care reasonably to have been expected. [Bouvier] CHRISSIE MORAL
Page 155 of 528

141 Walter Smith Co. v. Cadwallader Gibson Lumber Co.| Villamor presumption is juris tantum and not juris et de jure, and consequently, may be
G.R. No. L-32640, December 29, 1930| 55 Phil. 517 rebutted. it follows necessarily that if the employer shows to the satisfaction
of the court that in selection and supervision he has exercised the care and
FACTS diligence of a good father of a family, the presumption is overcome and he
• Defendant owns a steamer under the command of Capt. Lasal. The steamer was in is relieved from liability.
the course of its maneuvers to moor at plaintiff’s wharf in Olutanga, Zamboanga, This theory bases the responsibility of the master ultimately on his own
when said steamer struck said wharf, partially demolishing it and throwing the negligence and not on that of his servant. This is the notable peculiarity of
timber piled thereon into the water. As a result, plaintiff sued defendant for the the Spanish law of negligence. It is, of course, in striking contrast to the
partial destruction of the wharf and for the timber that was piled thereon. American doctrine that, in relations with strangers, the negligence of the
• Trial court held that the defendant was not liable for the partial collapse of the servant is conclusively the negligence of the master.
plaintiff's wharf, and for the loss of the timber piled thereon, dismissing the • The evidence shows that Captain Lasal at the time the plaintiff's wharf collapse was
complaint with costs against the plaintiff. a duly licensed captain, authorized to navigate and direct a vessel of any tonnage,
and that the defendant contracted his services because of his reputation as a captain.
ISSUES & ARGUMENTS This being so, the presumption of liability against the defendant has been overcome
• W/N defendant is liable. by the exercise of the care and diligence of a good father of a family in selecting
Captain Lasal, in accordance with the doctrines laid down by this court in the cases
HOLDING & RATIO DECIDENDI cited above, and the defendant is therefore absolved from all liability.
NO, CADWALLADER GIBSON LUMBER CO. IS NOT LIABLE.

• The instant case, dealing, as it does, with an obligation arising from culpa aquiliana or
negligence, must be decided in accordance with articles 1902 and 1903 (now 2176
and 2180) of the Civil Code.
• It is not true that proof of due diligence and care in the selection of and instructions
to a servant relieves the master of liability for the former's acts; on the contrary,
such proof shows that the liability never existed. As Manresa (vol. VIII, page 68)
says, the liability arising from an extra-contractual wrong is always based upon a
voluntary act or omission, which, while free from any wrongful intent, and due to
mere negligence or carelessness, causes damaged to another. A master who takes all
possible precaution in selecting his servants or employees, bearing in mind the
qualifications necessary for the performance of the duties to be entrusted to them,
and instructs them with equal care, complies with his duty to all third parties to
whom he is not bound under contract, and incurs no liability if, by reason of the
negligence of such servants though it be during the performance of their duties as
such, third parties should suffer damages. It is true that under article 1903 of the
Civil Code, the law presumes that the master, if regarded as an establishment, has
been negligent in the selection of, or instruction to, its servants, but that is a mere
juris tantum presumption and is destroyed by the evidence of due care and diligence
in this respect.
• In a previous case (Bahia v. Litonjua and Leynes), this distinction was clearly stated.
It said:
From this article two things are apparent: (1) That when an injury is caused
by the negligence of a servant or employee there instantly arises a
presumption of law that there was negligence on the part of the master or
employer either in the selection of the servant or employee, or in
supervision over him after the selection, or both; and (2) that the JOHN FADRIGO
Page 156 of 528

• Metropolitan owns 3 swimming pools at its filters in Balara, Quezon City. It charges is on display in a conspicuous place within the area certain rules and regulations
the public a certain fee if such wanted to use its pools. governing the use of the pools. Appellee employs six lifeguards who are all trained
• Upon hearing this, the lifeguard on duty dove into the pool to retrieve Ong’s lifeless • The record also shows that when the body of minor Ong was retrieved from the
body. Applying first aid, the lifeguard tried to revive the boy. bottom of the pool, the employees of appellee did everything possible to bring him
• Soon after, male nurse Armando Rule came to render assistance, followed by back to life. When they found that the pulse of the boy was abnormal, the inspector
sanitary inspector Iluminado Vicente who, after being called by phone from the immediately injected him with camphorated oil. When the manual artificial
clinic by one of the security guards, boarded a jeep carrying with him the respiration proved ineffective they applied the oxygen resuscitator until its contents
resuscitator and a medicine kit, and upon arriving he injected the boy with were exhausted. And while all these efforts were being made, they sent for Dr.
camphorated oil. After the injection, Vicente left on a jeep in order to fetch Dr. Ayuyao from the University of the Philippines who however came late because
Ayuyao from the University of the Philippines. Meanwhile, Abaño continued the upon examining the body found him to be already dead. All of the foregoing shows
artificial manual respiration, and when this failed to revive him, they applied the that appellee has done what is humanly possible under the circumstances to restore
resuscitator until the two oxygen tanks were exhausted life to minor Ong and for that reason it is unfair to hold it liable for his death
• Investigation was concluded and the cause of death is asphyxia by submersion in
water (pagkalunod) THE LAST CLEAR CHANCE DOCTRINE IS INAPPLICABLE TO THIS CASE.
• The parents of Ong bring this action for damages against Metropolitan, alleging • The record does not show how minor Ong came into the big swimming pool. The
negligence on the selection and supervision of its employees and if not negligent, only thing the record discloses is that minor Ong informed his elder brothers that he
they had the last clear chance to revive Ong. was going to the locker room to drink a bottle of coke but that from that time on
• It is to be noted that Metropolitan had complete safety measures in place: they had a nobody knew what happened to him until his lifeless body was retrieved. The
male nurse, six lifeguards, ring buoys, toy roof, towing line, saving kit and a doctrine of last clear chance simply means that the negligence of a claimant does not
resuscitator. There is also a sanitary inspector who is in charge of a clinic established preclude a recovery for the negligence of defendant where it appears that the latter,
for the benefit of the patrons. Defendant has also on display in a conspicuous place by exercising reasonable care and prudence, might have avoided injurious
certain rules and regulations governing the use of the pools, one of which prohibits consequences to claimant notwithstanding his negligence
the swimming in the pool alone or without any attendant. Although defendant does • Since it is not known how minor Ong came into the big swimming pool and it being
not maintain a full- time physician in the swimming pool compound, it has however apparent that he went there without any companion in violation of one of the
a nurse and a sanitary inspector ready to administer injections or operate the oxygen regulations of appellee as regards the use of the pools, and it appearing that lifeguard
resuscitator if the need should arise Abaño responded to the call for help as soon as his attention was called to it and
immediately after retrieving the body all efforts at the disposal of appellee had been
ISSUES & ARGUMENTS put into play in order to bring him back to life, it is clear that there is no room for
• W/N Metropolitan is liable to the Ongs for its negligence the application of the doctrine now invoked by appellants to impute liability to
W/N the last clear chance doctrine may be invoked in this case appellee.

GINO CAPATI
NO, METROPOLITAN IS NOT NEGLIGENT.
Page 157 of 528

143 Fabre V. CA | • Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the
G.R. No. 111127 July 26, 1996 | presumption that his employers, the Fabres, were themselves negligent in the
selection and supervisions of their employee.
FACTS • Due diligence in selection of employees is not satisfied by finding that the applicant
• Petitioners Fabre and his wife were owners of a minibus being used principally in possessed a professional driver's license. The employer should also examine the
connection with a bus service for school children which they operated in Manila. applicant for his qualifications, experience and record of service. Due diligence in
The couple had a driver Cabil whom they hired in 1981, after trying him out for two supervision, on the other hand, requires the formulation of rules and regulations for
weeks. His job was to take school children to and from the St. Scholastica's College the guidance of employees and issuance of proper instructions as well as actual
in Manila. implementation and monitoring of consistent compliance with the rules.
• Private respondent Word for the World Christian Fellowship Inc. (WWCF) • In the case at bar, the Fabres, in allowing Cabil to drive the bus to La Union,
arranged with petitioners for the transportation of 33 members of its Young Adults apparently did not consider the fact that Cabil had been driving for school children
Ministry from Manila to La Union and back. The group was scheduled to leave at only, from their homes to the St. Scholastica's College in Metro Manila. They had
5:00 o'clock in the afternoon. However, as several members of the party were late, hired him only after a two-week apprenticeship. They had hired him only after a
the bus did not leave until 8:00 o'clock in the evening. Petitioner Cabil drove the two-week apprenticeship. They had tested him for certain matters, such as whether
minibus. he could remember the names of the children he would be taking to school, which
• The bridge on the usual route was under repair so Cabil took a detour. He is were irrelevant to his qualification to drive on a long distance travel, especially
unfamiliar with the route because this is his first time driving to La Union. At 11:30 considering that the trip to La Union was his first. The existence of hiring
that night, petitioner Cabil came upon a sharp curve on the highway. The road was procedures and supervisory policies cannot be casually invoked to overturn the
slippery because it was raining, causing the bus, which was running at the speed of presumption of negligence on the part of an employer.
50 kilometers per hour, to skid to the left road shoulder. The bus hit the left traffic • This case actually involves a contract of carriage. Petitioners, the Fabres, did not
steel brace and sign along the road and rammed the fence of one Escano, then have to be engaged in the business of public transportation for the provisions of the
turned over and landed on its left side, coming to a full stop only after a series of Civil Code on common carriers to apply to them. The finding of the trial court and
impacts. The bus came to rest off the road. A coconut tree which it had hit fell on it of the appellate court that petitioners are liable under Arts. 2176 and 2180 for quasi
and smashed its front portion. delict, fully justify findings them guilty of breach of contract of carriage under the
• Several passengers were injured. Private respondent Antonio was thrown on the Civil Code.
floor of the bus and pinned down by a wooden seat which came down by a wooden
seat which came off after being unscrewed. It took three persons to safely remove
her from this portion. She was in great pain and could not move.
ISSUES & ARGUMENTS

• W/N petitioners are liable for the injuries of private respondent?
• The finding that Cabil drove his bus negligently, while his employer, the Fabres,
who owned the bus, failed to exercise the diligence of a good father of the family in
the selection and supervision of their employee is fully supported by the evidence on
record.
• The fact that it was raining and the road was slippery, that it was dark, that he drove
his bus at 50 kilometers an hour when even on a good day the normal speed was
only 20 kilometers an hour, and that he was unfamiliar with the terrain, Cabil was
grossly negligent and should be held liable for the injuries suffered by private
respondent Antonio.
J.C. LERIT
Page 158 of 528

144 PBCom v. CA|
| 269 SCRA 695
FACTS
• Rommel’s Marketing Corporatiopn (RMC), represented by its President and General
Manager Romeo Lipana filed a case agains PBCom to recover a sum of money
representing various deposits it made with the latter. Such amounts were not
credited to its account and were instead deposited to the account of onr Bienvenido
Cotas, allegedly due to the Gross and inexcusable negligence of the bank.
• Lipana claims to have entrusted RMC funds in the form of cash to his secretary,
Yabut. He said that Yabut was to deposit such amount to PBCom. However, what
the secretary did was to deposit it in the account of his husband and only wrote
RMC’s account number in the duplicate copy of the deposit slips.
• This happened for a year without RMC knowing. When it found out about the
scam, it filed a collection suit against PBCom.
ISSUES & ARGUMENTS

W/N the Proximate Cause of the loss is the negligence of respondent RMC and Romeo
Lipana
The Proximate Cause of the loss is the negligence of PBCom through its teller in
validating the deposit slips notwithstanding that the duplicate copy is not completely
accomplished.
• Under the last clear chance doctrine, petitioner bank is the liable party. The doctrine
states that where both parties are negligent, but the negligent act of he one is
appreciably later in time than that of the other, or, when it is impossible to
determine whose fault it should be attributed to, the one who had the last clear
opportunity to avoid the harm and failed to do so is chargeable with the
consequences thereof. Petitioner bank thru its teller, had the last clear opportunity
to avert the injury incurred by its client, simply by faithfully observing their self
imposed valdation procedure.
NINA MEIJA
Page 159 of 528

145 Reyes vs. CA | De Leon
G.R. No. 118492, June 16, 1992 | HOLDING & RATIO DECIDENDI
FACTS NO
• In view of the 20th Asian Racing Conference then scheduled to be held in Sydney, • The petitioners contend that due to the fiduciary nature of the relationship between
Australia, the Philippine Racing Club, Inc. (PRCI, for brevity) sent four (4) delegates the respondent bank and its clients, the respondent should have exercised a higher
to the said conference. Petitioner Gregorio H. Reyes, as vice-president for finance, degree of diligence than that expected of an ordinary prudent person in the handling
racing manager, treasurer, and director of PRCI, sent Godofredo Reyes, the club's of its affairs as in the case at bar. The appellate court, according to petitioners, erred
chief cashier, to the respondent bank to apply for a foreign exchange demand draft in applying the standard of diligence of an ordinary prudent person only.
in Australian dollars. • The evidence shows that the respondent bank exercised that degree of diligence
• Godofredo went to respondent bank's Buendia Branch in Makati City to apply for a expected of an ordinary prudent person under the circumstances obtaining. Prior to
demand draft in the amount One Thousand Six Hundred Ten Australian Dollars the first dishonor of the subject foreign exchange demand draft, the respondent
(AU$1,610.00) payable to the order of the 20th Asian Racing Conference Secretariat bank advised Westpac-New York to honor the reimbursement claim of Westpac-
of Sydney, Australia. He was attended to by respondent bank's assistant cashier, Mr. Sydney and to debit the dollar account of respondent bank with the former. As soon
Yasis, who at first denied the application for the reason that respondent bank did as the demand draft was dishonored, the respondent bank, thinking that the
not have an Australian dollar account in any bank in Sydney. Godofredo asked if problem was with the reimbursement and without any idea that it was due to
there could be a way for respondent bank to accommodate PRCI's urgent need to miscommunication, re-confirmed the authority of Westpac-New York to debit its
remit Australian dollars to Sydney. Yasis of respondent bank then informed dollar account for the purpose of reimbursing Westpac-Sydney.13 Respondent bank
Godofredo of a roundabout way of effecting the requested remittance to Sydney also sent two (2) more cable messages to Westpac-New York inquiring why the
thus: the respondent bank would draw a demand draft against Westpac Bank in demand draft was not honored
Sydney, Australia (Westpac-Sydney for brevity) and have the latter reimburse itself • Banks are duty bound to treat the deposit accounts of their depositors with the
from the U.S. dollar account of the respondent in Westpac Bank in New York, highest degree of care. But the said ruling applies only to cases where banks act under
U.S.A. (Westpac-New York for brevity). This arrangement has been customarily their fiduciary capacity, that is, as depositary of the deposits of their depositors. But
resorted to since the 1960's and the procedure has proven to be problem-free. PRCI the same higher degree of diligence is not expected to be exerted by banks in
and the petitioner Gregorio H. Reyes, acting through Godofredo, agreed to this commercial transactions that do not involve their fiduciary relationship with their
arrangement or approach in order to effect the urgent transfer of Australian dollars depositors.
payable to the Secretariat of the 20th Asian Racing Conference • The respondent bank was not required to exert more than the diligence of a good
• Petitioners spouses Reyes left for Australia to attend the said racing conference. At father of a family in regard to the sale and issuance of the subject foreign exchange
the registration desk, in the presence of other delegates from various member of the demand draft. The case at bar does not involve the handling of petitioners' deposit,
conference secretariat that he could not register because the foreign exchange if any, with the respondent bank. Instead, the relationship involved was that of a
demand draft for his registration fee had been dishonored for the second time. A buyer and seller, that is, between the respondent bank as the seller of the subject
discussion ensued in the presence and within the hearing of many delegates who foreign exchange demand draft, and PRCI as the buyer of the same.
were also registering. Feeling terribly embarrassed and humiliated, petitioner • The evidence shows that the respondent bank did everything within its power to
Gregorio H. Reyes asked the lady member of the conference secretariat that he be prevent the dishonor of the subject foreign exchange demand draft.
shown the subject foreign exchange demand draft that had been dishonored as well
as the covering letter after which he promised that he would pay the registration fees
in cash. In the meantime he demanded that he be given his name plate and
conference kit. The lady member of the conference secretariat relented and gave
him his name plate and conference kit.
• On November 23, 1988, the petitioners filed in the RTC of Makati, Metro Manila, a
complaint for damages against the respondent bank due to the dishonor of the said
foreign exchange demand draft issued by the respondent bank
.
ISSUES & ARGUMENTS
• W/N the bank could be held liable. GINO CAPATI
Page 160 of 528
146 Crisostomo vs. CA | Ynares-Santiago • A contract of carriage or transportation is one whereby a certain person or
G.R. No. 138334, August 25, 2003 | 409 SCRA 528 association of persons obligate themselves to transport persons, things, or news
from one place to another for a fixed price.
FACTS • Respondent is not engaged in the business of transporting either passengers of
• Petitioner Crisostomo contracted the services of respondent Caravan Travel and goods and is therefore not a common carrier. Respondent’s services as a travel
Tours International, to arrange and facilitate her booking, ticketing, and agency include procuring tickets and facilitating travel permits or visas as well as
accommodation in a tour called “Jewels of Europe.” She was given a 5% discount booking customers for tours.
and a waived booking fee because her niece, Meriam Menor, was the company’s • A common carrier is bound by law to carry as far as human care and foresight can
ticketing manager. provide using the utmost diligence of very cautious persons and with due regard for
• Menor went to her aunt’s residence to deliver Crisostomo’s travel documents and all circumstances. But since Caravan is a travel agency, it is not bound to observe
plane tickets and get her payment. Menor told her to be in NAIA on Saturday. extraordinary diligence in the performance of its obligations.
• When Crisostomo got to the airport on Saturday, she discovered that the filight she • For them, the standard of care required is that of a good father of a family. This
was supposed to take had already departed the previous day. She complained to connotes reasonable care consistent with that which an ordinarily prudent person
Menor, and was urged by the latter to take another tour, instead  “British would have observed when confronted with a similar situation.
Pageant.” • We do not concur with the finding that Menor’s negligene concurred with that of
• Upon returning from Europe, Crisostomo demanded P61,421.70 from Caravan Crisostomo. No evidence to prove Menor’s negligence.
Tours, representing the difference between the sun she paid for Jewels and the • The negligence of the obligor in the performance of the obligations renders him
amount she owed the company for British Pageant. Caravan refused. liable for damages for the resulting loss suffered by the obligee. Fault or negligence
• Thus, Crisostomo filed a complaint against Caravan for breach of contract of of an obligor consists in the his failure to exercise due care and prudence in the
carriage and damages. The trial court held in favor of Crisostomo, and ordered performance of the obligation. The degree of diligence required depends on the
Caravan to pay her, because it was negligent in erroneously advising Crisostomo of circumstances of the specific obligation and whether one has been negligent is a
her departure. However, Crisostmo is also guilty of contributory negligence (for question of fact that is to be determined in the case.
failing to verify the exact date and time of departure). CA declared that Crisostomo
is more negligent. As a lawyer and well-travelled person, she should have known Petition denied. CA affirmed.
better. MR of Crisostomo was also denied. Hence this petition.
ISSUES & ARGUMENTS

• W/N respondent Caravan is guilty of negligence and is liable to Crisostomo
for damages.
o Crisostomo: Respondent did not observe the standard of care required of
a common carrier, i.e. extraordinary diligence in the fulfillment of its
obligation.
o Caravan: Menor was not negligent. The date and time of departure was
legibly written on the plane ticket and the travel papers were given 2 days
before the flight. It performed all obligations to enable Crisostomo to join
the group and exercised due diligence in its dealings with the latter.
CARVAN NOT LIABLE FOR DAMAGES.
CHRISSIE MORAL
Page 161 of 528

147 Spouses Theis v CA | Hermosisima, Jr. mistake committed by the private respondent in selling parcel no. 4 to the
G.R. No. 126013. February 12, 1997 | petitioners falls within the second type. Verily, such mistake invalidated its consent
and as such, annulment of the deed of sale is proper
FACTS • Article 1390 of the Civil Code provides that contracts where the consent is vitiated
• Calson’s Development owned three lots in Tagaytay – Parcels Nos. 1, 2, and 3. by mistake are annullable. In order that mistake may invalidate consent, it should
Adjacent to parcel no. 3 was parcel no. 4, which was not owned by Calsons. refer to the substance of the thing which is the object of the contract, or to those
• Calson’s built a house on Parcel No. 3. In a subsequent survey, parcel no. 3, where conditions which have principally moved one or both parties to enter into the
the house was built, was erroneously indicated to be covered by the title to parcel no. contract. The concept of error includes: (1) ignorance, which is the absence of
1. Parcel nos. 2 and 3 were mistakenly surveyed to be located where parcel no. 4 was knowledge with respect to a thing; and (2) mistake, which is a wrong conception
located. about said thing, or a belief in the existence of some fact, circumstance, or event,
• Unaware of this mistake by which Calson’s appeared to be the owner of parcel no. 4, which in reality does not exist. In both cases, there is a lack of full and correct
Calson’s sold what it thought was parcel nos. 2 and 3 (but what was actually parcel knowledge about the thing.
no. 4) to the Theis spouses. Upon execution of the deed of sale, Calson’s delivered • In this case, Calson’s committed an error of the second type. This mistake
the certificates of title to parcel nos. 2 and 3 to the spouses. The spouses then went to invalidated its consent, and as such, annulment of the deed of sale is proper. The
Germany. error was an honest mistake, and the good faith of Calson’s is evident in the fact
• About three years later, they returned to Tagaytay to plan the construction of their that when the mistake was discovered, it immediately offered two other vacant lots
house. It was then that they discovered that parcel no. 4, which was sold to them, was to the spouses or to reimburse them with twice the amount paid.
owned by someone else, and that what was actually sold to them were parcel • Petitioners’ insistence in claiming parcel no. 3 on which stands a house whose value
nos. 2 and 3. The real parcel no. 3, however, could not have been sold to them since exceeds the price paid by them is unreasonable. This would constitute unjust
a house had already been built thereon by Calson’s even before the execution of the enrichment. Moreover, when the witness for the spouses testified, he stated that
contract, and its construction cost far exceeded the price paid by the spouses for the what was pointed out to the spouses was a vacant lot. Therefore, they could not
two parcels of land. have intended to purchase the lot on which a house was already built.
• The spouses insisted that they wanted parcel no. 4, but this was impossible,
since Calson’s did not own it. Calson’s offered them the real parcel nos. 1 and 2
instead since these were really what it intended to sell to the spouses. The spouses
refused and insisted that they wanted parcel nos. 2 and 3 since the TCTs to these lots
were the ones that had been issued in their name. Calson’s then offered to return
double the amount already paid by the spouses. The spouses still refused. Calson’s
filed an action to annul the contract of sale.
ISSUES & ARGUMENTS

• W/N Calson’s may rescind the contract on the ground of mistake
YES.
• Art. 1331. In order that mistake may invalidate consent, it should refer to the
substance of the thing which is the object of the contract, or to those conditions
which have principally moved one or both parties to enter into the contract."
• Tolentino explains that the concept of error in this article must include both
ignorance, which is the absence of knowledge with respect to a thing, and mistake
properly speaking, which is a wrong conception about said thing, or a belief in the
existence of some circumstance, fact, or event, which in reality does not exist. In
both cases, there is a lack of full and correct knowledge about the thing. The JON LINA
Page 162 of 528

148 Gatchalian vs. Delim | takes passengers around La Union. She has a contract of carriage with them and is
G.R. No. L-56487 October 21, 1991 | 203 SCRA 126 required to exercise extraordinary diligence when fulfilling these contractual duties.
To uphold a supposed waiver of any right to claim damages by an injured passenger,
FACTS under circumstances like those exhibited in this case, would be to dilute and weaken
• Reynalda Gatchalian boarded Thames mini bus owned by Delim. The bus was the standard of extraordinary diligence exacted by the law from common carriers
headed for Bauang, La Union. On the way, while the bus was running along the and hence to render that standard unenforceable. The waiver is offensive to pulic
highway in Barrio Payocpoc, Bauang, Union, "a snapping sound" was suddenly policy.
heard at one part of the bus and, shortly thereafter, the vehicle bumped a cement
flower pot on the side of the road, went off the road, turned turtle and fell into a
ditch.
• Several passengers, including Gatchalian, were injured. They were promptly taken to
Bethany Hospital at San Fernando, La Union, for medical treatment. Upon medical
examination, petitioner was found to have sustained physical injuries on the leg, arm
and forehead.
• Mrs. Delim paid for all the hospital expenses. She also asked the passengers to sign a
document [Joint Affidavit] stating, “That we are no longer interested to file a
complaint, criminal or civil against the said driver and owner of the said Thames,
because it was an accident and the said driver and owner of the said Thames have
gone to the extent of helping us to be treated upon our injuries.
• Even if Gatchalian signed this document, she still filed this case.
ISSUES & ARGUMENTS

W/N the document Delim had Gatchalian sign at the hospital constitutes a valid waiver.
NO. THE DOCUMENT WAS NOT A VALID WAIVER.
• A waiver, to be valid and effective, must in the first place be couched in clear and
unequivocal terms which leave no doubt as to the intention of a person to give up a
right or benefit which legally pertains to him. A waiver may not casually be
attributed to a person when the terms that do not explicitly and clearly evidence an
intent to abandon a right vested in such person.
• The circumstances under which the Joint Affidavit was signed by Gatchalian need to
be considered. Gatchalian was still reeling from the effects of the vehicular accident,
having been in the hospital for only three days, when the purported waiver in the
form of the Joint Affidavit was presented to her for signing, while reading the
document, she experienced dizziness but since the other passengers who had also
suffered injuries signed the document, she too signed without bothering to read the
Joint Affidavit in its entirety. Considering these circumstances there appears
substantial doubt whether Gatchalian understood fully the import of the Joint
Affidavit (prepared by Delim) she signed and whether she actually intended thereby
to waive any right of action.
• Moreover, for a waiver to be vlaid, it must not be contrary to law, pubic policy, MIK MALANG
morals and good customs. In this case, Delim was the owner of the minibus which
Page 163 of 528
149 Philippine Carpet Employees Assoc. and Jonathan Barquin vs. Philippines disowned simply because of a change of mind. Such legitimate waivers resulting
Manufacturing Corp., Raul Rodrigo, and Manuel Trovela | Gonzaga-Reyes from voluntary settlements of laborer’s claims should be treated and upheld as the
G.R. No. 140269-70, September 14, 2000| 340 SCRA 383 law between the parties. However, when as in this case, the voluntariness of the execution of the
quitclaim or release is put into issue, then the claim of employee may still be given due course. The
FACTS law looks with disfavor upon quitclaims and releases by employees pressured into signing the same
• The Philippine Carpet Employees Association (the Union) is the certified sole and by unscrupulous employers minded to evade legal responsibilities
exclusive collective bargaining agent of all rank and file employees in Philippine • It is therefore reversible error to hold, despite such findings, that BARQUIN
Carpet Manufacturing Corporation (the Company), a local company engaged in the voluntarily signed the quitclaim for the only logical conclusion that can be drawn is
business of carpet and rug making that the Company feigned that it was suffering business losses in order to justify
• Barquin is a union member who was hired by the Company as casual worker retrenchment and consequently enable it to terminate the services of BARQUIN in
(janitor) and was later extended into a probationary employment, as a helper in the order to prevent the wage distortion
Company’s weaving department • Verily, had the Company not misled BARQUIN into believing that there was a
• The Regional Tripartite Productivity Board (NCR) promulgated Wage Order No. 4 ground to retrench, it is not difficult to believe that he would have thought twice
and 4-A granting a two-tier increase in the minimum wage, which prompted the before signing the quitclaim inasmuch there was no reason for the termination of his
Union to write the Company asking for the across-the-board implementation of the employment
Wage Orders and invoked its “decades old practice” of implementing wage orders • BARQUIN’s consent to the quitclaim cannot be deemed as being voluntarily and
across-the-board, but the Company refused their demand freely given inasmuch as his consent was vitiated by mistake or fraud, we have no
• The Union reiterated its demand, but the Company also reiterated its position recourse but to annul the same. There being no valid quitclaim, BARQUIN is
• In the meantime, Barquin received a notice advising him that his services were to be entitled to receive the benefits granted an employee whose dismissal on the ground
terminated, was placed in forced leave, and paid in full for the duration of the leave of retrenchment is declared illegal. BARQUIN is therefore entitled to reinstatement
• The Company justified Barquin’s termination as a valid retrenchment to his former position without loss of seniority rights and other privileges, as there is
• Failing to resolve the issues in the mediation level, the parties submitted the case for no evidence to show that reinstatement is no longer possible
voluntary arbitration
• The voluntary arbitrator ruled that Barquin was illegally dismissed to avoid Decision is REVERSED and SET ASIDE
compliance with the wage orders but not entitled to reinstatement because he
received his separation pay and voluntarily signed the Deed of Release and
Quitclaim and acquiesced to his separation. MR denied
• On appeal, the Court of Appeals ruled that the Company failed to prove that
Barquin voluntarily signed the quitclaim
• The Company’s MR was partly granted, so the CA set aside the order of
reinstatement and that Barquin had the burden to prove that his execution of the
Deed of Release and Quitclaim was involuntary
• The Union’s MR denied. Hence, this present appeal
ISSUES & ARGUMENTS

W/N the Deed of Release and Quitclaim was valid.
THE DEED OF RELEASE AND QUITCLAIM WAS ILLEGAL AND VOID.
• If the agreement was voluntarily entered into and represents a reasonable settlement
of the claims of the employee, it is binding on the parties and may not later be KATH MATIBAG
Page 164 of 528

150 Dapor v. Biascan| Callejo Sr., J. petitioner ever attempted to impersonate her. In fact, the trial court found that
G.R. No. 141880. September 27, 2004 | respondent Mario Biascan allowed the petitioner to use his surname.:
• It would appear that the very first time that Zenaida Dapar’s name had the surname
FACTS Biascan was when defendant Mario Biascan had executed the affidavit of
• Spouses Gloria and Mario Biascan were married in civil rights in Quezon City. They undertaking in connection with his employment in Saudi Arabia, wherein he
were, blessed with four children. designated as his beneficiary Zenaida Dapar Biascan. The undertaking was sworn to
• Mario Biascan, an electrician by profession, worked in Saudi Arabia as an overseas by the defendant on April 7, 1982 and which also showed that his effective date of
contract worker from 1977 to 1981. It was in 1979 when he met Zenaida Dapar, employment in Saudi Arabia was April 1982 and to expire on February 1984
who was then working as a domestic helper. That first meeting ripened into an (Exhibit “A”). This is an extrajudicial admission that would not allow proof to the
intimate relationship. Both being lonely in a foreign land, Zenaida and Mario contrary. Zenaida appeared to have no participation in the preparation of said
became lovers, which resulted in the latter’s failure to give support to his wife and document. Moreover, when the contract to sell and the deed of sale of the property
family. in question were executed, Zenaida Dapar used the surname Biascan and defendant
• Zenaida returned to the Philippines in 1981. Upon Mario’s return to the country, he Mario Biascan did not object to the use of such surname. Also, in the joint bank
joined Zenaida to live in a rented house. They opened a joint account wherein account with the PNB Valenzuela, the name Zenaida Dapar Biascan is described as
Zenaida deposited Mario’s remittances. They bought a house in hillcrest using the a joint depositor.
funds in the bank. A TCT was issued in favor of Mario and Zenaida. To this, Gloria
filed an action for reconveyance. She alleged that That the inclusion of the name of
Zenaida in the said transfer certificate of title and tax declaration, is without any
legal basis whatsoever, because sheis not the legal wife of Mario M. Biascan, and
that the money used in acquiring the lot and house belonged to Mario M. Biascan.
Further, she alleged that the defendant’s use of the surname “Biascan” is a
usurpation of surname under Article 377 of the New Civil Code of the Philippines,
and as such, plaintiff, who is the legal wife of Mario M. Biascan, is entitled to
recover damages from defendant.
• Zenaida filed a MTD. She alleged that she had no idea that Mario was a married
man and that she tried to leave him as soon as he found out.
• RTC denied the MTD, and held that the law on co-ownership governed the
property relations of Mario and Zenaida. It further held that Gloria was not entitled
to damages for Zenaida’s use of the surname Biascan, because Mario consented to
it.
ISSUES & ARGUMENTS

W/N the Zenaida is liable for damages.
Zenaida is not liable for Damages.
• The usurpation of name under Article 377 of the Civil Code implies some injury to
the interests of the owner of the name. It consists in the possibility of confusion of
identity between the owner and the usurper, and exists when a person designates
himself by another name. The elements are as follows: (1) there is an actual use of
another’s name by the defendant; (2) the use is unauthorized; and (3) the use of
another’s name is to designate personality or identify a person. None of the
foregoing exist in the case at bar. Respondent Gloria Biascan did not claim that the NINA MEIJA
Page 165 of 528

151 Sison vs. David | Concepcion never extends to matters which are patently unrelated to the subject of the inquiry.
G.R. No. L-11268, January 28, 1961| 1 SCRA 60 The terms "absolute privilege" and "qualified privilege" have established technical
meanings, in connection with civil actions for libel and slander.
FACTS • An absolutely privileged communication is one for which, by reason of the occasion
• Margarita executed a will constituting several legacies in favor of specified persons on which it is made, no remedy is provided for the damages in a civil action for slander or libel.
and naming her grandnieces and her sister hereafter referred to as Mrs. Teodoro and It is well settled that the law recognizes this class of communications which is so
Mrs. Sison, respectively — as heirs of the residue of her estate. Upon the demise of absolutely privileged that even the existence of express malice does not destroy the privilege
Margarita proceedings were instituted to settle her estate. although there are some dicta denying the rule, and some eminent judges, in dealing
• There was an extrajudicial partition of the properties concerned and the executor with particular applications of the rule, have doubted or questioned the rationale or
caused a lien to be annotated on the back of the TCT’s regarding payment of his principle of absolutely privileged communications. As to absolutely privileged
fees. communications, a civil action for libel or slander is absolutely barred. In the case of
• As it turns out the properties were already assigned to a certain company and the communications qualifiedly privileged, there must be both an occasion of privilege
latter asked for the said annotation to be removed and to ask compensation from and the use of that occasion in good faith.
the other properties instead. • An absolutely privileged communication is one in respect of which, by reason of the
• Defendant filed for a petition for bond alleging among others that the movants occasion on which or the matter in reference to which, it is made, no remedy can be
herein object to the urgent petition ex-parte on the ground that the property to be had in a civil action, however hard it may bear upon a person who claims to be
sold herein is one of the few properties inherited from Margarita David which is not injured thereby, and even though it may have been made maliciously.
encumbered, because practically all of the properties of the heiress Sison are • Apart from the occasion in which or the matter in reference to which it is made,
mortgaged, and the Priscila Estate, Inc., is operating on an overdraft, which is the what distinguishes an absolutely privileged communication from one which is only
reason why these properties are to be sold. qualifiedly privileged is, therefore, that the latter is actionable upon proof of "actual
• Soon later plaintiff commenced the present action. In his amended complaint malice", whereas its existence does not affect the exemption attached to the former,
therein, he alleged that the averment in the above-quoted paragraph 2 was made provided that, in the case of judicial proceedings, the derogatory statements in
with malice and evident intent to put him in ridicule, for defendant knew him question are pertinent, relevant or related to or connected with the subject matter of
(plaintiff) to be the president of Priscila Estate, Inc. and, by the statements the communication involved. It is, thus, clear that utterances made in the course of
contained in said paragraph, the defendant, "in effect, implied with clear judicial including all kinds of pleadings, petitions and motions, belong to the class of
malevolence and malignity that plaintiff is incompetent and unfit to manage the communications that are absolutely privileged.
affairs of the Priscila Estate, Inc." • Hence, the "Petition for bond" of defendant herein is absolutely privileged, and no
• Defendant averred that they were proper and necessary to protect his interests and civil action for libel or slander may arise therefrom, unless the contents of the
those of his client Jose Teodoro, Sr. petition are irrelevant to the subject matter thereof.
ISSUES & ARGUMENTS

• W/N plaintiff has a cause of action with regard to the alleged malicious
statements made by defendant during the course of judicial proceeding?
STATEMENTS MADE IN THE COURSE OF JUDICIAL PROCEEDINGS ARE

ABSOLUTELY PRIVILEGED NO MATTER HOW MALICIOUS, HENCE NO
ACITON FOR DAMAGES WILL PROSPER.
• At the outset, it should be noted that the pertinency or relevancy essential to the
privilege enjoyed in judicial proceedings, does not make it a "qualified privilege"
within the legal connotation of the term. Otherwise, all privileged communications
in judicial proceedings would be qualified, and no communications therein would be
absolutely privileged, for the exemption attached to the privilege in said proceedings MAUI MORALES
Page 166 of 528

152 Malit v. People of the Philippines and Judge Ofilada | Relova
G.R. No. L-58681, May 31, 1982 TC’s orders are reversed and set aside. Respondent is ordered to desist and refrain from proceeding with
the trial.
FACTS
• Petitioner Malit was counsel of Ruth Fernandez in an administrative case filed
against her by Dr. Macaspac.
• On cross-examination, petitioner asked Dr. Macaspac if she knew the person who
"made" a certain exhibit. Dr. Macaspac evaded the question by saying she did not
understand the word "made." Petitioner tried to explain by saying that it means
"prepared." Notwithstanding, Dr. Macaspac would not answer and, instead, asked
petitioner for clarification. This prompted Atty. Malit to say: "I doubt how did you
become a Doctor."
• Dr. Macaspac instituted a complaint for slander against herein petitioner.
• An information for unjust vexation was filed.
• Petitioner filed a motion to quash on the ground that the facts charged do not
constitute an offense.
• It is the position of petitioner that the statement "I doubt how did you become a
doctor" does not constitute an offense as it was uttered at the time he was
conducting the cross-examination of Dr. Macaspac; that utterances made in the
course of judicial proceedings belong to the class of communication that are
absolutely privileged.
ISSUES & ARGUMENTS

W/N the utterance made in the course of judicial proceedings is absolutely privileged
communication.

YES. Utterances made in the course of judicial or administrative proceedings
belong to the class of communications that are absolutely privileged.
• Well settled is the rule that parties, counsel and witnesses are exempted from liability
in libel or slander cases for words otherwise defamatory, uttered or published in the
course of judicial proceedings, provided the statements are pertinent or relevant to
the case.
• As to the degree of relevancy or pertinency necessary to make alleged defamatory
matter privileged, the courts are inclined to be liberal. The matter to which the
privilege does not extend must be so palpably wanting in relation to the subject
matter of the controversy that no reasonable man can doubt its irrelevance and
impropriety.
• The privilege is granted in aid and for the advantage of the administration of justice.
The privilege is not intended so much for the protection of those engaged in the
public service and in the enactment and administration of law, as for the promotion
of the public welfare, the purpose being that members of the legislature, judges of
courts, jurors, lawyers, and witnesses may speak their minds freely and exercise their
respective functions without incurring the risk of a criminal prosecution or an action
for the recovery of damages. TIN OCAMPO-TAN
Page 167 of 528

153 Proline vs. CA | Bellosillo
G.R. No. 87584, June 16, 1992 | 210 SCRA 18 • UNIVERSAL failed to show that the filing of Crim. Case No. 45284 was bereft of
probable cause. Probable cause is the existence of such facts and circumstances as
FACTS would excite the belief in a reasonable mind, acting on the facts within the
• SUMMARY: This case stemmed from a criminal case for unfair competition filed by knowledge of the prosecutor, that the person charged was guilty of the crime for
Pro Line Sports Center, Inc. (PRO LINE) and Questor Corporation (QUESTOR) which he was prosecuted.
against Monico Sehwani, president of Universal Athletics and Industrial Products, • The existence of probable cause for unfair competition by UNIVERSAL is
Inc. (UNIVERSAL). In that case Sehwani was exonerated. As a retaliatory move, derivable from the facts and circumstances of the case. The affidavit of Graciano
Sehwani and UNIVERSAL filed a civil case for damages against PRO LINE and Lacanaria, a former employee of UNIVERSAL, attesting to the illegal sale and
QUESTOR for what they perceived as the wrongful and malicious filing of the manufacture of "Spalding " balls and seized "Spalding" products and instruments
criminal action for unfair competition against them. from UNIVERSAL's factory was sufficient prima facie evidence to warrant the
• Edwin Dy Buncio, General Manager of PRO LINE, sent a letter-complaint to the prosecution of private respondents. That a corporation other than the certified
NBI regarding the alleged manufacture of fake "Spalding" balls by UNIVERSAL. owner of the trademark is engaged in the unauthorized manufacture of products
On 23 February 1981 the NBI applied for a search warrant with Judge Vera anf bearing the same trademark engenders a reasonable belief that a criminal offense for
issued Search Warrant No. 2-81 authorizing the search of the premises of unfair competition is being committed.
UNIVERSAL in Pasig. In the course of the search, some 1,200 basketballs and • Petitioners PRO LINE and QUESTOR could not have been moved by legal malice
volleyballs marked "Spalding" were seized and confiscated by the NBI in instituting the criminal complaint for unfair competition which led to the filing of
• Meanwhile, on 26 February 1981, PRO LINE and QUESTOR filed a criminal the Information against Sehwani. Malice is an inexcusable intent to injure, oppress,
complaint for unfair competition against respondent Monico Sehwani together with vex, annoy or humiliate. We cannot conclude that petitioners were impelled solely
Robert, Kisnu, Arjan and Sawtri, all surnamed Sehwani, and Arcadio del los Reyes by a desire to inflict needless and unjustified vexation and injury on UNIVERSAL's
before the Provincial Fiscal of Rizal. The complaint was dropped on 24 June 1981 business interests. A resort to judicial processes is not per se evidence of ill will upon
for the reason that it was doubtful whether QUESTOR had indeed acquired the which a claim for damages may be based. A contrary rule would discourage peaceful
registration rights over the mark "Spalding" from A.G. Spalding Bros., Inc., recourse to the courts of justice and induce resort to methods less than legal, and
• After the prosecution rested its case, Sehwani filed a demurrer to evidence arguing perhaps even violence
that the act of selling the manufactured goods was an essential and constitutive • We are more disposed, under the circumstances, to hold that PRO LINE as the
element of the crime of unfair competition under Art. 189 of the Revised Penal authorized agent of QUESTOR exercised sound judgment in taking the necessary
Code, and the prosecution was not able to prove that he sold the products. In its legal steps to safeguard the interest of its principal with respect to the trademark in
Order of 12 January 1981 the trial court granted the demurrer and dismissed the question. If the process resulted in the closure and padlocking of UNIVERSAL's
charge against Sehwani factory and the cessation of its business operations, these were unavoidable
• Thereafter, UNIVERSAL and Sehwani filed a civil case for damages with the consequences of petitioners' valid and lawful exercise of their right. One who makes
Regional Trial Court of Pasig charging that PRO LINE and QUESTOR maliciously use of his own legal right does no injury. Qui jure suo utitur nullum damnum facit. If
and without legal basis committed the following acts to their damage and prejudice damage results from a person's exercising his legal rights, it is damnum absque injuria.
ISSUES & ARGUMENTS

• Two (2) issues: (a) whether private respondents Sehwani and UNIVERSAL
are entitled to recover damages for the alleged wrongful recourse to court
proceedings by petitioners PRO LINE and QUESTOR; and, (b) whether
petitioners' counterclaim should be sustained.
PRO LINE and QUESTOR cannot be adjudged liable for damages for the
alleged unfounded suit. The complainants were unable to prove two (2) essential
elements of the crime of malicious prosecution, namely, absence of probable
cause and legal malice on the part of petitioners. GINO CAPATI
Page 168 of 528

154 Amonoy vs. Gutierrez | Panganiban • "On 27 September 1985 a temporary restraining order was granted on 2 June 1986
G.R. No. 140420| February 15, 2001 | enjoining the demolition of the petitioners' houses.
• "Then on 5 October 1988 a Decision was rendered in the said G.R. No. L-72306
FACTS disposing that:
• "This case had its roots in Special Proceedings No. 3103 of Branch I of the CFI of "WHEREFORE, Certiorari is granted; the Order of respondent Trial Court, dated
Pasig, Rizal, for the settlement of the estate of the deceased Julio Cantolos, 25 July 1985, granting a Writ of Possession, as well as its Orderd, dated 25 April
involving six(6) parcels of land situated in Tanay Rizal. Amonoy was the counsel of 1986 and 16 May 1986, directing and authorizing respondent Sheriff to demolish the
therein Francisca Catolos, Agnes Catolos, Asuncion Pasamba and Alfonso Formida. houses of petitioners Angela and Leocadia Fornilda are hereby ordered returned to
On 12 January 1965, the Project of Partition submitted was approved and xxx two petitioners unless some of them have been conveyed to innocent third persons."5
(2) of the said lots were adjudicated to Asuncion Pasamba and Alfonso Formilda. • But by the time the Supreme Court promulgated the abovementioned Decision,
The Attorney's fees charged by Amonoy was P27,600.00 and on 20 January 1965 respondents' house had already been destroyed, supposedly in accordance with a
Asuncion Pasamba and Alfonso Formida executed a deed of real estate mortgage on Writ of Demolition ordered by the lower court.
the said two (2) lots adjudicated to them, in favor of Amonoy to secure the payment • Thus, a Complaint for damages in connection with the destruction of their house
of his attorney's fees. But it was only on 6 August 1969 after the taxes had been was filed by respondents against petitioner before the RTC on December 15, 1989.
paid, the claims settled and the properties adjudicated, that the estate was declared • In its January 27, 1993 Decision, the RTC dismissed respondents' suit. On appeal,
closed and terminated. the CA set aside the lower court's ruling and ordered petitioner to pay respondents
• "Asuncion Pasamba died on 24 February 1969 while Alfonso Fornilda passsed away P250,000 as actual damages. Petitioner then filed a Motion for Reconsideration,
on 2 July 1969. Among the heirs of the latter was his daughter, plaintiff-appellant which was also denied.
Angela Gutierrez.
• "Because his Attorney's fess thus secured by the two lots were not paid, on 21 ISSUES & ARGUMENTS
January 1970 Amonoy filed for their foreclosure in Civil Code4 No. 12726 entitled • W/N the Court of Appeals was correct was correct in deciding that the
Sergio Amonoy vs. Heirs of Asuncion Pasamba and Heirs of Alfonso Fornilda before the CFI petition [was] liable to the respondents for damages."8
of Pasig, Rizal, and this was assigned to Branch VIII. The heirs opposed,
contending that the attorney's fees charged [were] unconscionable and that the HOLDING & RATIO DECIDENDI
attorney's fees charged [were] unconscionable and that the agreed sum was only • Clearly then, the demolition of respondents' house by petitioner, despite his receipt
P11,695.92. But on 28 September 1972 judgment was rendered in favor of Amonoy of the TRO, was not only an abuse but also an unlawful exercise of such right. In
requiring the heirs to pay within 90 days the P27,600.00 secured by the mortgage, insisting on his alleged right, he wantonly violated this Court's Order and wittingly
P11,880.00 as value of the harvests, and P9,645.00 as another round of attorney's caused the destruction of respondents; house.
fees. Failing in that, the two (2) lots would be sold at public auction. • Obviously, petitioner cannot invoke damnum absque injuria, a principle premised on
• "They failed to pay. On 6 February 1973, the said lots were foreclosed and on 23 the valid exercise of a right.14 Anything less or beyond such exercise will not give
March 1973 the auction sale was held where Amonoy was the highest bidder at rise to the legal protection that the principle accords. And when damage or prejudice
P23,760.00. On 2 May 1973 his bid was judicially confirmed. A deficiency was to another is occasioned thereby, liability cannot be obscured, much less abated.
claimed and to satisfy it another execution sale was conducted, and again the highest • In the ultimate analysis, petitioner's liability is premised on the obligation to repair
bidder was Amonoy at P12,137.50. or to make whole the damage caused to another by reason of one's act or omission,
• "Included in those sold was the lot on which the Gutierrez spouses had their house. whether done intentionally or negligently and whether or not punishable by law.
• "More than a year after the Decision in Civil Code No. 12726 was rendered, the said
decedent's heirs filed on 19 December 1973 before the CFI of Pasig, Rixal[,] Civil
case No. 18731 entitled Maria Penano, et al vs. Sergio Amonoy, et al, a suit for the
annulment thereof. The case was dismissed by the CFI on 7 November 1977, and
this was affirmed by the Court of Appeals on 22 July 1981.
• "Thereafter, the CFI on 25 July 1985 issued a Writ of Possession and pursuant to
which a notice to vacate was made on 26 August 1985. On Amonoy's motion of 24
April 1986, the Orders of 25 April 1986 and 6 May 1986 were issued for the
demolition of structures in the said lots, including the house of the Gutierrez
spouses. JAVIN OMPOC
Page 169 of 528
155 Rogelio Mariscal vs. Court of Appeals |Belosillo
G.R. No. 123926, July 22, 1999 | 311 SCRA 51
FACTS
• Bella Catalan filed an annulment case against Mariscal with the RTC of Iloilo on the
ground of the marriage having been solemnized without a valid marriage license and
it being bigamous.
• Rogelio Mariscal subsequently filed an annulment case against Catalan with the RTC
of Digos (Davao Del Sur) on the ground that he was forced to marry her at
gunpoint and that they had no valid license.
• Catalan moved for the dismissal of the second case invoking litis pendencia. RTC of
Digos denied such but was reversed by the CA.
• Hence this petition by Mariscal.
ISSUES & ARGUMENTS

• W/N the second civil case should be dismissed on the ground of litis
pendencia
o Respondent: Bigamy committed by Mariscal to be proved in the first case
does not necessarily exclude and is different from the force, duress,
intimidation, threats and strategy made by Catalan to be proved in the
second case.
YES. Litis pendencia is present.
• According to Victronics Computers, Inc. v. RTC-Br. 63, Makati, the requisites of litis
pendentia are as follows:
(a) identity of parties, or at least such as representing the same interest in both
actions; (b) identity of rights asserted and relief prayed for, the relief being
founded on the same facts; and, (c) the identity in the two (2) cases should be
such that the judgment that may be rendered in the pending case would,
regardless of which party is successful, amount to res judicata in the other
• The first two are present, and it is the third one that is the bone of contention.
Mariscal contends that there are different grounds for nullification invoked in the
two cases. However, what is essential is the identity and similarity of the issues
under consideration, which basically in the two cases is the annulment of their
marriage.
• Moreover, Mariscal stated in his answer before the RTC Iloilo, the very same he set
forth before the RTC Digos which is “force, violence, intimidation, threats and strategy.”
He cannot deny now that the issues and arguments are identical.
• Indeed the Court is puzzled no end why Mariscal literally shied away from the RTC
of Iloilo where he could have just as well ventilated his affirmative and special
defenses and litigated his compulsory counterclaim in that court and thus avoided
this duplicity of suits which is the matrix upon which litis pendencia is laid. MARICE PACHECO
Page 170 of 528

157 Spouses Lim v Uni Tan Marketing | Panganiban,
G.R. No. 147328, February 20, 2002 |
FACTS
• Spouses Anton and Eileen Lim had a case filed against them by Uni Tan Marketing
for Unlawful Detainer in the MTC.
• MTC ordered Spouses Lim to vacate or pay rent until they vacate. Spouses lim
appealed to RTC.
• RTC overruled MTC and ordered petitioners not liable. Petitioners sought to
recover several properties levied upon and sold at public execution.
• RTC finds that petitioners failed to post supersedeas bond and therefore they
cannot go against the sheriff.
• Spouses Lim elevates Case to CA, CA dismisses stating the filing was procedurally
flawed for failing to attach a copy of duplicate original or certified true copy of MTC
decision.
ISSUES & ARGUMENTS

• W/N There was substantial compliance, there was error on RTC for failing
to award actual ,moral and exemplary damages
Petition has no merit

• Sec. 2 Rule 42 is mandatory and a duplicate original or certified true copy must be
attached petitioners did neither and failed to comply with procedural requirements.
• There must be a supersedeas bond to stay execution of judgment as there is
immediate execution in this case, it is either supersedeas bond, perfection of appeal
or periodic payment to respondent that stays execution.
• No basis for damages as respondents were exercising their rights. Damnum absque
injuria is present
• It is petitioners own fault for not following the law in filing their appeal and in filing
a supersedeas bond. Their misfortune is their own fault.
CHRIS PALARCA
Page 171 of 528

158 Ramos v CA | Kapunan results to surgery and he will be opened up; a knife is going to open up his body.
G.R. No. 124354 April 11, 2002| 380 SCRA 467 (Dr. Camagay)
FACTS On the part of Dr. Hosaka, while his professional services were secured primarily
• Erlinda Ramos underwent an operation known as cholecystectomy (removal of for their performance of acts within their respective fields of expertise for the
stone in her gallbladder) under the hands of Dr. Orlino Hosaka. He was treatment of petitioner Erlinda, and that one does not exercise control over the
accompanied by Dr. Perfecta Gutierrez, an anesthesiologist which Dr. Hosaka other, they were certainly not completely independent of each other so as to
recommended since Ramos (and her husband Rogelio) did not know any. absolve one from the negligent acts of the other physician.
• The operation was schedule at 9am of June 17, 1985 but was however delayed for
three hours due to the late arrival of Dr. Hosaka. • First, it was Dr. Hosaka who recommended to petitioners the services of Dr.
• Dr. Gutierrez subsequently started trying to intubate her. And at around 3pm, Gutierrez. In effect, he represented to petitioners that Dr. Gutierrez possessed the
Erlinda was seen being wheeled to the Intensive Care Unit (ICU). The doctors necessary competence and skills. Drs. Hosaka and Gutierrez had worked together
explained to petitioner Rogelio that his wife had bronchospasm. Erlinda stayed in since 1977. Whenever Dr. Hosaka performed a surgery, he would always engage the
the ICU for a month. She was released from the hospital only four months later or services of Dr. Gutierrez to administer the anesthesia on his patient. Second, Dr.
on November 15, 1985. Since the ill-fated operation, Erlinda remained in comatose Hosaka himself admitted that he was the attending physician of Erlinda. Thus, when
condition until she died on August 3, 1999. Erlinda showed signs of cyanosis, it was Dr. Hosaka who gave instructions to call
• Petitioners filed with the RTC a civil case for damages; the present petition is the 2nd for another anesthesiologist and cardiologist to help resuscitate Erlinda. Third, it is
MR of the private respondents in the SC, the main decision was rendered in conceded that in performing their responsibilities to the patient, Drs. Hosaka and
December 29, ‘00. Gutierrez worked as a team. Their work cannot be placed in separate watertight
compartments because their duties intersect with each other.
• It is equally important to point out that Dr. Hosaka was remiss in his duty of
ISSUES & ARGUMENTS attending to petitioner Erlinda promptly, for he arrived more than three (3) hours
• W/N the private respondents should be held liable for the injury caused to late for the scheduled operation. The cholecystectomy was set for June 17, 1985 at
Erlinda and her family? 9:00 a.m., but he arrived at DLSMC only at around 12:10 p.m. In reckless disregard
for his patient’s well being, Dr. Hosaka scheduled two procedures on the same day,
HOLDING & RATIO DECIDENDI just thirty minutes apart from each other, at different hospitals. Thus, when the first
procedure (protoscopy) at the Sta. Teresita Hospital did not proceed on time,
YES. On the part of Dr. Gutierrez, her failure to exercise the standards of care in Erlinda was kept in a state of uncertainty at the DLSMC.
the administration of anesthesia on a patient through the non-performance of the • The Captain-of –the-Ship doctrine was still applied notwithstanding arguments that
preanesthetic/preoperative evaluation prior to an operation. The injury incurred such doctrine was being abandoned in the US. That there is a trend in American
by petitioner Erlinda does not normally happen absent any negligence in the jurisprudence to do away with the Captain-of-the-Ship doctrine does not mean that
administration of anesthesia and in the use of an endotracheal tube. As was noted this Court will ipso facto follow said trend. From the facts on the record it can be
in our Decision, the instruments used in the administration of anesthesia, logically inferred that Dr. Hosaka exercised a certain degree of, at the very least,
including the endotracheal tube, were all under the exclusive control of private supervision over the procedure then being performed on Erlinda.
respondents Dr. Gutierrez and Dr. Hosaka. Thus the doctrine of res ipsa loquitor
can be applied in this case. On the part of the hospital (DLSMC), since there was NO employer-employee
relationship between the hospital and Dr. Gutierrez and Dr. Hosaka established
• Such procedure was needed for 3 reasons: (1) to alleviate anxiety; (2) to dry up the in this case, the hospital cannot be held liable under Art. 2180 of the Civil Code.
secretions and; (3) to relieve pain. Now, it is very important to alleviate anxiety The contract of the hospital with its consultants is separate and distinct from the
because anxiety is associated with the outpouring of certain substances formed in contract with its patients.
the body called adrenalin. When a patient is anxious there is an outpouring of
adrenalin which would have adverse effect on the patient. One of it is high blood
pressure, the other is that he opens himself to disturbances in the heart rhythm,
which would have adverse implications. So, we would like to alleviate patient’s
anxiety mainly because he will not be in control of his body there could be adverse BYRON PEREZ
Page 172 of 528

159 Cuadra v. Monfort|Makalintal reflect unfavorably on her upbringing and for which the blame could be attributed
G.R. L-24101 | Sept. 30, 1970 | to her parents.
• The victim, no doubt, deserves no little commiseration and sympathy for the tragedy
FACTS that befell her. But if the defendant is at all obligated to compensate her suffering,
• Maria Teresa Cuadra, 12, and Maria Teresa Monfort, 13, were classmates in Grade the obligation has no legal sanction enforceable in court, but only the moral
Six. Their teacher assigned them, together with three other classmates, to weed the compulsion of good conscience.
grass in the school premises. Maria Teresa Monfort found a plastic headband.
Jokingly she said aloud that she had found an earthworm and, to frighten the Cuadra
girl, tossed the object at her. At that precise moment the latter turned around to face
her friend, and the object hit her right eye.
• Smarting from the pain, she rubbed the injured part and treated it with some
powder. The next day, the eye became swollen and it was then that the girl related
the incident to her parents, who thereupon took her to a doctor for treatment. She
underwent surgical operation twice, first on July 20 and again on August 4, 1962,
and stayed in the hospital for a total of twenty-three days, for all of which the
parents spent the sum of P1,703.75.
• Despite the medical efforts, however, Maria Teresa Cuadra completely lost the sight
of her right eye.
• In the civil suit subsequently instituted by the parents in behalf of their minor
daughter against Alfonso Monfort, Maria Teresa Monfort's father, the defendant
was ordered to pay P1,703.00 as actual damages; P20,000.00 as moral damages; and
P2,000.00 as attorney's fees, plus the costs of the suit.
ISSUES & ARGUMENTS

• W/N the parents are liable for the acts of their minor child when the act or
omission of the child is committed in the absence of the parents.
NO.
• There is no meticulously calibrated measure applicable; and when the law simply
refers to "all the diligence of a good father of the family to prevent damage," it
implies a consideration of the attendant circumstances in every individual case, to
determine whether or not by the exercise of such diligence the damage could have
been prevented.
• There is nothing from which it may be inferred that the defendant could have prevented
the damage by the observance of due care, or that he was in any way remiss in the exercise of his
parental authority in failing to foresee such damage, or the act which caused it. On the contrary,
his child was at school, where it was his duty to send her and where she was, as he
had the right to expect her to be, under the care and supervision of the teacher.
• The act which caused the injury was concerned, it was an innocent prank not
unusual among children at play and which no parent, however careful, would have
any special reason to anticipate much less guard against. Nor did it reveal any
AYEN QUA
mischievous propensity, or indeed any trait in the child's character which would
Page 173 of 528
160 Elcano vs. Hill | Barredo not as a crime is not extinguished even by a declaration in the criminal case that the
G.R. No. L-24803, May 26, 1977| 77 SCRA 98 criminal act charged has not happened or has not been committed by the accused.
FACTS Marvin Hill vicariously liable. However, since Reginald has come of age, as a
• Reginald Hill was a married minor living and getting subsistence from his father, co- matter of equity, the former’s liability is now merely subsidiary.
defendant Marvin. He killed Agapito Elcano, son of petitioners, for which he was • Under Art. 2180, the father and in case of his death or incapacity, the mother, are
criminally prosecuted. However, he was acquitted on the ground that his act was not responsible for the damages caused by the minor children who live in their
criminal because of "lack of intent to kill, coupled with mistake." company. In the case at bar, Reginald, although married, was living with his father
• Subsequently, petitioners filed a civil action for recovery of damages against and getting subsistence from him at the time of the killing.
defendants, which the latter countered by a motion to dismiss. Trial court • The joint and solidary liability of parents with their offending children is in view of
the parental obligation to supervise minor children in order to prevent damage to
ISSUES & ARGUMENTS third persons. On the other hand, the clear implication of Art. 399, in providing that
• W/N the action for recovery of damages against Reginald and Marvin Hill is a minor emancipated by marriage may not sue or be sued without the assistance of
barred by res judicata. the parents is that such emancipation does not carry with it freedom to enter into
• W/N there is a cause of action against Reginald’s father, Marvin. transactions or do not any act that can give rise to judicial litigation.
o Respondents: Marvin Hill is relieved as guardian of Reginald through
emancipation by marriage. Hence the Elcanos could not claim against Order appealed from REVERSED. Trial court ordered to proceed in accordance with the foregoing
Marvin Hill. opinion.
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.
• There is need for a reiteration and further clarification of the dual character, criminal
and civil, of fault or negligence as a source of obligation, which was firmly
established in this jurisdiction in Barredo vs. Garcia (73 Phil. 607).
• In this jurisdiction, the separate individuality of a cuasi-delito or culpa aquiliana, under
the Civil Code has been fully and clearly recognized, even with regard to a negligent
act for which the wrongdoer could have been prosecuted and convicted in a
criminal case and for which, after such a conviction, he could have been sued for
civil liability arising from his crime. (p. 617, 73 Phil.)
• Notably, Article 2177 of the New Civil Code provides that: “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.”
• Consequently, a separate civil action lies against the offender in a criminal act,
whether or not he is criminally prosecuted and found guilty or acquitted, provided
that the offended party is not allowed, if he is actually charged also criminally, to
recover damages on both scores, and would be entitled in such eventuality only to
the bigger award of the two, assuming the awards made in the two cases vary. In
other words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule
111, refers exclusively to civil liability founded on Article 100 of the Revised Penal
Code, whereas the civil liability for the same act considered as a quasi-delict only and DANI BOLONG
Page 174 of 528

161 Libi vs. IAC |
FACTS
• Son of Libi spouses, Wendell was a sweetheart of the private respondents (Spouses
Gotiong) named Julie Ann who eventually fell out of love from the former (due to
being sadistic and irresponsible) which led to a fateful day of their death by a
gunshot from a gun owned by Wendell’s father.
• The Gotiong’s believe that Wendell caused the death of their daughter and himself
due to frustration while the Libi’s believe that some unknown third party did it in
relation to Wendell’s work as informer for Anti-Narcotics Unit.
• Spouses Gotiong sued Libi spouses for damages invoking Art. 2180 of the Civil
Code for Vicarious liability of Parents with respect to their minor children.
• RTC ruled in favor of Libi’s by reason of lack of evidence. CA held the reverse
holding them subsidiarliy liable.
ISSUES & ARGUMENTS

• W/N Libi spouses are subsidiarily liable in the instant case.
• CA wrongly interpreted the vicarious liability of parents. It must be primary using

Article 101 of the RPC. If subsidiary only: the diligence of bonus pater familias will not
lie since they will answer for the minor at any rate but if primary: it will be direct,
hence the defense.
• In this case however, the parents as still failed to discharge themselves of any
defense because evidence shows Wendell knew of the location of the keys for the
Gunsafe, Libi’s do not know of his being a CANU agent and photography of Julie
Ann was with the accused upon his death with the gun.
JOY ADRANEDA
Page 175 of 528

162 Exconde vs. Capuno | Bautista Angelo
G.R. No. L-10134, June 29, 2957 | 101 Phil 843 Petition GRANTED. Decision MODIFIED. Defendants Dante and Delfin shall pay Exconde
P2,959.00.
FACTS
• Dante Capuno was a member of the Boy Scouts organization and a student of the Reyes, Dissenting:
Balintawak Elementary School. He attended a parade in honor of Jose Rizal upon
instruction of the city school’s supervisor. He boarded a jeep, took hold of the • We should affirm the decision relieving the father of liability.
wheel and drove it while the driver sat on his left side. The jeep turned turtle and • The words “arts and trades” does not qualify “teachers” but only “heads of
and two passengers (Isidiro Caperina and Amado Ticzon) died. establishments.”
• At the time this happened, Dante’s father, Delfin was not with him, nor did he • Where the parent places the child under the effective authority of the teacher, the
know that his son was going to attend a parade. latter should be answerable for the torts committed while under his custody, for the
• Dante was then charged with double homicide through reckless imprudence. After very reason that the parent is not supposed to interfere with the discipline of the
conviction by the RTC and CA, petitioner Sabina Exconde (mother of one of the school nor with the authority and supervision of the teacher while the child is under
deceased) filed a separate civil action against Dante and Delfin for damages in the instruction.
amount of P2,959.00. • Delfin could not have properly refused to allow the child to attend the parade, in
• Defendants averred as a defense that Dante should be the only one civilly liable defiance of school authorities.
because at the time of the accident he was not under the control, supervision, and • If a teacher was present, he/she should be the one responsible for allowing the
custody of Delfin. minor to drive. If there was no teacher present, the school authorities are the ones
• The lower court sustained the defense, and so Exconde appealed, the case certified answerable.
to the SC. • The father should not be held liable for a tort that he was in no way able to prevent,
and which he had every right to assume the school authorities would avoid.
ISSUES & ARGUMENTS
• W/N Delfin can be held jointly and severally liable with his son Dante for
damages resulting from the death of Isidro caused by the negligent act of his
minor son Dante.
DELFIN JOINTLY AND SEVERALLY LIABLE WITH DANTE.
• Article 1903, 1st and 5th paragraphs: “The father, and, in case of his death or
incapacity, the mother, are liable for any damages caused by minor children who live
with them.” “Teachers and directors of arts and trades are liable for any damages
caused by their pupils or apprentices while they are under their custody.”
• The 5th paragraph only applies to an institution of arts and trades and not to any
academic educational institution. Hence, neither the head of the school, nor the city
school’s supervisor, could be held liable for the negligent act of Dante because he
was not then a student of an institution of arts and trades as provided by law.
• The civil liability imposed upon the father and mother for any damages that may be
caused by the minor children is a necessary consequence of the parental authority
they exercise over them, which imposes upon parents the “duty of supporting them,
keeping them in their company, educating them and instructing them in proportion
to their means,” while, on the other hand, gives them the “right to correct and
punish them in moderation.” The only way to relieve them is if they prove that they
exercised all the diligence of a good father of a family. This defendants failed to do. CHRISSIE MORAL
Page 176 of 528

163 SEVERINO SALEN and ELENA SALBANERA vs. JOSE BALCE | Bautista • The particular law that governs this case is Article 2180, the pertinent portion of
Angelo which provides: "The father and, in case of his death or incapacity, the mother, are
G.R. No. L-14414 | April 27, 1960 responsible for damages caused by the minor children who lived in their company."
• To hold that this provision does not apply to the instant case because it only covers
FACTS obligations which arise from quasi-delicts and not obligations which arise from
• Plaintiffs brought this action against defendant before the Court of First Instance of criminal offenses, would result in the absurdity that while for an act where mere
Camarines Norte to recover the sum of P2,000.00 negligence intervenes the father or mother may stand subsidiarily liable for the
• Plaintiffs are the legitimate parents of Carlos Salen who died single from wounds damage caused by his or her son, no liability would attach if the damage is caused
caused by Gumersindo Balce, a legitimate son of defendant. with criminal intent.
• Gumersindo Balce was also Single, a minor below 18 years of age, and was living • Verily, the void that apparently exists in the Revised Penal Code is subserved by this
with defendant. As a result of Carlos Salen's death, Gumersindo Balce accused and particular provision of our Civil Code, as may be gleaned from some recent
convicted of homicide and was sentenced to imprisonment and to pay the heirs of decisions of this Court which cover equal or identical cases.
the deceased an indemnity in the amount of P2,000.00.
• Upon petition of plaintiff, the only heirs of the deceased, a writ of execution was
issued for the payment of the indemnity but it was returned unsatisfied because
Gumersindo Balce was insolvent and had no property in his name.
• Thereupon, plaintiffs demanded upon defendant, father of Gumersindo, the
payment of the indemnity the latter has failed to pay, but defendant refused, thus
causing plaintiffs to institute the present action.
• The trial court held that that the civil liability of the son of appellee arises from his
criminal liability and, therefore, the subsidiary liability of appellee must be
determined under the provisions of the Revised Penal Code, and not under Article
2180 of the new Civil Code which only applies to obligations which arise from
quasi-delicts
ISSUES & ARGUMENTS

• W/N the father can be held subsidiary liable to pay the indemnity of
P2,000.00 which his son was sentenced to pay in the criminal case filed
against him.
Yes.
• While the court agrees with the theory that, as a rule, the civil liability arising from a
crime shall be governed by the provisions of the Revised Penal Code, it disagrees
with the contention that the subsidiary liability of persons for acts of those who are
under their custody should likewise be governed by the same Code even in the
absence of any provision governing the case, for that would leave the transgression
of certain right without any punishment or sanction in the law. Such would be the
case if we would uphold the theory of appellee as sustained by the trial court.
• A minor over 15 who acts with discernment is not exempt from criminal liability,
for which reason the Code is silent as to the subsidiary liability of his parents should
he stand convicted. In that case, resort should be had to the general law which is our
Civil Code
MAGIC MOVIDO
Page 177 of 528

164 Estanislawa Canlas v Chan Lin Po, Remedios Diala, and LimKoo | Barrera TC decision affirmed: Petition is dismissed.
G.R. No. L-16929, July 31, 1969 | 2 SCRA 973
FACTS
• June 11 1951: Juanito Chan, son of Chan Lin Po and Remedios Diala, drove and
operated a motor vehicle (a truck) along Rizal Ave Ext, Manila in a reckless and
imprudent manner thereby causing to hit Nicolas Paras, 65 yo, and ran over his
head, crushing it, resulting to his instantaneous death; facs revealed that the truck
was registered in the name of Lim Koo.
• At the initial stage of the criminal trial, Petitioner, Estanislawa Canlas (widow of
Nicolas, representing also 5 minor children), made a reservation to file a separate
civil action.
• TC: Juanito is guilty, serve sentence of 1yr-8mos, plus 5K indeminity.
• CA: modified, 1yr not less than 4 yrs of imprisonment, indemnity also affirmed.
• In the civil action, same facts were alleged. Defendants disclaimed liability by
establishing that Juanito is married and is no longer a minor living in the company
of his parents, and that he is also not an employee of Lim Koo. Thus, Neither
Juanito’s parents can be made liable under vicarious liability (2180 of the NCC) nor
the owner of vehicle be the subsidiary liable under 103 of the RPC.
• Civil action: dismissed, since petitioner already tried to execute the indemnity
adjudged in the crim action and Juanito already served subsidiary imprisonment by
virtue of his inability to pay indemnity. Petitioner insists on the liability of parents
and truck owner. MR denied, hence this petition.
ISSUES & ARGUMENTS

• W/N Respondents can be made liable over the civil liability of Juanito?
NO.
• 2180 par 5 of the NCC (primary liab-vicarious liab) only applies if the offender is a
MINOR LIVING in the COMPANY of his PARENTS. In this case, Juanito was
already married and lives independently from his parents
• 103 of the RPC (subsidiary liab) only attaches if EER between the owner and
offender is established and that the act happened while he was discharging his duties
(as employee). In this case, no evidence was presented to establish such relationship.
NB: The civil complaint was confused with the nature of liability to charge (103 or 2180).
Court however clarified that the lower court erred when they adjudged that the civil
action is barred by res judicata. The civil action from crim act and indep civil action are
of different nature and purpose. The 2 cases affect different parties. In the indep civil
action, subsidiary and vicarious liab were being established. Nevertheless, since 2180 of
NCC and 103 of RPC was inapplicable, the action was still dismissed.
DIANE LIPANA
Page 178 of 528

165 Tamargo vs. CA| Feliciano death or incapacity, the mother, for any damages that may be caused by a minor child
G.R. No. 85044, June 3, 1992| who lives with them.
Article 2180 of the Civil Code reads:
FACTS The obligation imposed by article 2176 is demandable not only for one's own
• On 20 October 1982, Adelberto Bundoc, 10 yrs old, shot Jennifer Tamargo with an acts or omissions, but also for those of persons for whom one is responsible.
air rifle causing injuries which resulted in her death. The father and, in case of his death or incapacity, the mother, are responsible
• A civil complaint for damages was filed by petitioner Macario Tamargo, Jennifer's for the damages caused by the minor children who live in their company.
adopting parent, and petitioner spouses Celso and Aurelia Tamargo, Jennifer's xxx xxx xxx
natural parents against respondent spouses Victor and Clara Bundoc, Adelberto's The responsibility treated of in this Article shall cease when the person herein
natural parents with whom he was living at the time of the tragic incident. mentioned prove that they observed all the diligence of a good father of a
• In addition to this case for damages, a criminal information for Homicide through family to prevent damage. (Emphasis supplied)
Reckless Imprudence was filed against Adelberto Bundoc. Adelberto, however, was • This principle of parental liability is a species of what is frequently designated as
acquitted and exempted from criminal liability on the ground that he bad acted vicarious liability, or the doctrine of "imputed negligence" under Anglo-American
without discernment. tort law, where a person is not only liable for torts committed by himself, but also
• Prior to the incident, or on 10 December 1981, the spouses Sabas and Felisa for torts committed by others with whom he has a certain relationship and for
Rapisura had filed a petition to adopt the minor Adelberto Bundoc in Special whom he is responsible. Thus, parental liability is made a natural or logical
Proceedings No. 0373-T before the then Court of First Instance of Ilocos Sur. This consequence of the duties and responsibilities of parents — their parental authority
petition for adoption was granted on, 18 November 1982, after Adelberto had shot — which includes the instructing, controlling and disciplining of the child.
and killed Jennifer. • The civil liability imposed upon parents for the torts of their minor children living
• In their Answer, respondent spouses Bundoc, Adelberto's natural parents, reciting with them, may be seen to be based upon the parental authority vested by the Civil
the result of the foregoing petition for adoption, claimed that not they, but rather Code upon such parents. The civil law assumes that when an unemancipated child
the adopting parents, namely the spouses Sabas and Felisa Rapisura, were living with its parents commits tortious acts, the parents were negligent in the
indispensable parties to the action since parental authority had shifted to the performance of their legal and natural duty closely to supervise the child who is in
adopting parents from the moment the successful petition for adoption was filed. their custody and control. Parental liability is, in other words, anchored upon
• Petitioners contended that since Adelberto Bundoc was then actually living with his parental authority coupled with presumed parental dereliction in the discharge of the
natural parents, parental authority had not ceased nor been relinquished by the mere duties accompanying such authority. The parental dereliction is, of course, only
filing and granting of a petition for adoption. presumed and the presumption can be overtuned under Article 2180 of the Civil
• The trial court on 3 December 1987 dismissed petitioners' complaint, ruling that Code by proof that the parents had exercised all the diligence of a good father of a
respondent natural parents of Adelberto indeed were not indispensable parties to family to prevent the damage.
the action. • 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
ISSUES & ARGUMENTS parents of the minor Adelberto. It would thus follow that the natural parents who
• W/N the effects of adoption, insofar as parental authority is concerned may had then actual custody of the minor Adelberto, are the indispensable parties to the
be given retroactive effect so as to make the adopting parents the suit for damages.
indispensable parties in a damage case filed against their adopted child, for • Spouses Bundoc invokes Article 36 of the Child and Youth Welfare Code which
acts committed by the latter, when actual custody was yet lodged with the states that the decree of adoption shall be effective on the date the original petition
biological parents. was filed.
• Court is not persuaded. As earlier noted, under the Civil Code, the basis of parental
HOLDING & RATIO DECIDENDI liability for the torts of a minor child is the relationship existing between the parents
and the minor child living with them and over whom, the law presumes, the parents
NO. The biological parents are the indispensable parties. exercise supervision and control. Article 58 of the Child and Youth Welfare Code,
• It is not disputed that Adelberto Bundoc's voluntary act of shooting Jennifer re-enacted this rule:
Tamargo with an air rifle gave rise to a cause of action on quasi-delict against him. Article 58 Torts — Parents and guardians are responsible for the damage caused
And consequently, the law imposes civil liability upon the father and, in case of his by the child under their parental authority in accordance with the civil Code.
PAT FERNANDEZ
Page 179 of 528

166 Heirs of Delos Santos vs. CA
FACTS
• M/V Mindoro owned by Maritima bound for Aklan sailed in the wee hours of the
morning and met a strong typhoon (Welming) causing the ship to sank drowning
certain passengers including the decedent of petitioners.
• The Board of Marine Inquiry found that the captain and some members of the crew
were negligent in operating the vessel, it then imposed penalty of suspension and
license revocation as well as payment for damages, which cannot be enforced
against the captain as he also perished along with the vessel.
• The petitioners then sought after the vessel owner but the RTC and CA absolved
Maritima using Article 587 of the Code of Commerce limiting the liability of the
shipowner.
ISSUES & ARGUMENTS

• W/N Maritima could be held liable.

• Yes. The article cannot apply because such only applies when the sole negligence
and liability is caused by the ship captain, in this case the company is also negligent.
• The typhoon was already in the knowledge of the captain and Maritima is presumed
to know the same prior the trip, yet it still allowed the voyage. It also allowed the
ship to be overloaded and that it also failed to show that its ship is seaworthy-
having failed to adduce evidence that it properly installed radar in the ship.
JOY ADRANEDA
Page 180 of 528

167 St. Francis High School vs. CA| Paras of the owner and/or manager of the establishment (in the present case, St.
G.R. No. 82465 February 25, 1991 |SCRA Francis High School and its principal); and while this presumption is not
conclusive, it may be overthrown only by clear and convincing proof that
FACTS the owner and/or manager exercised the care and diligence of a good
• Ferdinand Castillo, then a freshman student of Section 1-C at the St. Francis High father of a family in the selection and/or supervision of the employee or
School, wanted to join a school picnic undertaken by Class I-B and Class I-C at employees causing the injury or damage (in this case, the defendants-
Talaan Beach, Sariaya, Quezon. Ferdinand's parents, respondents spouses Dr. teachers). The record does not disclose such evidence as would serve to
Romulo Castillo and Lilia Cadiz Castillo, because of short notice, did not allow overcome the aforesaid presumption and absolve the St. Francis High
their son to join but merely allowed him to bring food to the teachers for the picnic, School and its principal from liability.
with the directive that he should go back home after doing so. However, because of o Whether or not the victim's parents had given such permission to their son
persuasion of the teachers, Ferdinand went on with them to the beach. was immaterial to the determination of the existence of liability on the part
• During the picnic and while the students, including Ferdinand, were in the water, of the school and school officials for the damage incurred by the Castillo
one of the female teachers was apparently drowning. Some of the students, spouses as a result of the death of their son. What is material to such a
including Ferdinand, came to her rescue, but in the process, it was Ferdinand determination is whether or not there was negligence on the part of school
himself who drowned. His body was recovered but efforts to resuscitate him ashore officials vis-a-vis the supervision of the victim's group during the picnic;
failed. and, as correctly found by the trial court, an affirmative reply to this
• Thereupon, the Castillo spouses filed a complaint against the St. Francis High question has been satisfactorily established by the evidence, as already
School, represented by the spouses Fernando Nantes and Rosario Lacandula, pointed out.
Benjamin Illumin (its principal), and the teachers: Tirso de Chaves, Luisito
Vinas, Connie Arquio, Nida Aragones, Yoly Jaro, and Patria Cadiz, for ISSUES & ARGUMENTS
Damages which respondents allegedly incurred from the death of their 13-year old • W/N there was negligence attributable to the school officials which will
son, Ferdinand Castillo. warrant the award of damages to the Castillo spouses;
• The TC found in favor of the Castillo spouses and against petitioners-teachers • W/N Art. 2180, in relation to Art. 2176 of the New Civil Code is applicable to
Arquio, de Chaves, Vinas, Aragones, Jaro and Cadiz. On the other hand, the TC the case at bar;
dismissed. the case against the St. Francis High School, Benjamin Illumin and • W/N the award of exemplary and moral damages is proper under the
Aurora Cadorna. circumstances surrounding the case at bar.
o While it is alleged that when defendants Yoly Jaro and Nida Aragones
arrived at the picnic site, the drowning incident had already occurred, such Castillos:
fact does not and cannot excuse them from their liability. In fact, it could • The death of their son was due to the failure of the petitioners to exercise the
be said that by coming late, they were remiss in their duty to safeguard the proper diligence of a good father of the family in preventing their son's drowning
students.
o Benjamin Illumin had himself not consented to the picnic and in fact he HOLDING & RATIO DECIDENDI
did not join it. Defendant Aurora Cadorna had then her own class to
supervise and in fact she was not amongst those allegedly invited by No. There was no negligence attributable to the school officials which will
defendant Connie Arquio to supervise class I-C to which Ferdinand warrant the award of damages to the Castillo spouses.
Castillo belongs. • The school officials are neither guilty of their own negligence or guilty of the
• CA negligence of those under them. Consequently, they are not liable for damages.
o St. Francis High School and the school principal, Benjamin Illumin, are
liable under Article 2176 taken together with the 1st, 4th and 5th No. Art. 2180, in relation to Art. 2176 of the New Civil Code is not applicable to
paragraphs of Article 2180 of the Civil Code the case at bar.
o Under Article 2180, supra, the defendant school and defendant school • Before an employer may be held liable for the negligence of his employee, the act or
principal must be found jointly and severally liable with the defendants- omission which caused damage or prejudice must have occurred while an employee
teachers for the damages incurred by the plaintiffs as a result of the death was in the performance of his assigned tasks.
of Ferdinand. It is the rule that the negligence of the employees in causing • In the case at bar, the teachers/petitioners were not in the actual
the injury or damage gives rise to a presumption of negligence on the part performance of their assigned tasks. The incident happened not within the
Page 181 of 528
school premises, not on a school day and most importantly while the teachers paragraphs (1) and (5) are applicable to the situation. In the application of
and students were holding a purely private affair, a picnic. It is clear from the these provisions, the negligence of the employee in causing injury or damage gives
beginning that the incident happened while some members of the I-C class rise to a presumption of negligence on the part of the owner and/or manager of the
of St. Francis High School were having a picnic at Talaan Beach. This picnic establishment. While this presumption is not conclusive, it may be overcome only
had no permit from the school head or its principal, Benjamin Illumin by clear and convincing evidence that the owner and/or manager exercised the care
because this picnic is not a school sanctioned activity neither is it considered and diligence of a good father of a family in the selection and/or supervision of the
as an extra-curricular activity. employees causing the injury or damage. I agree with the respondent court that
• Mere knowledge by petitioner/principal Illumin of the planning of the picnic by the no proof was presented to absolve the owner and/or manager, herein
students and their teachers does not in any way or in any manner show acquiescence petitioners-spouses Nantes and Lacandula, and Illumin. Thus, as correctly
or consent to the holding of the same. held by the respondent court, they too must be accountable for the death of
Ferdinand Castillo.
No. The award of exemplary and moral damages is improper under the
circumstances surrounding the case at bar.
• No negligence could be attributable to the petitioners-teachers to warrant the award
of damages to the respondents-spouses.
• Petitioners Connie Arquio the class adviser of I-C, the section where
Ferdinand belonged, did her best and exercised diligence of a good father of
a family to prevent any untoward incident or damages to all the students who
joined the picnic.
• With these facts in mind, no moral nor exemplary damages may be awarded in favor
of respondents-spouses. The case at bar does not fall under any of the grounds to
grant moral damages.9
Separate Opinion:
Padilla, dissenting:
• Although the excursion may not have been attended by the appropriate school
authorities, the presence or stamp of authority of the school nevertheless pervaded
by reason of the participation not of one but of several teachers, the petitioners. As
found by the court a quo, the excursion was an activity "organized by the teachers
themselves, for the students and to which the student, NATURALLY, acceded."
• Having known of the forthcoming activity, petitioner Illumin, as school principal,
should have taken appropriate measures to ensure the safety of his students. His
silence and negligence in performing his role as principal head of the school that
must be construed as an implied consent to such activity.
• As administrative head (principal) of St. Francis High School, petitioner
Illumin acted as the agent of his principal (the school) or its representatives,
the petitioners-spouses Nantes and Lacandula. Consequently, and as found
by the respondent court. Article 2176 in conjunction with Article 2180,
9 Art. 2217. Moral Damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's
wrongful act or omission.
NICO CRISOLOGO
Page 182 of 528

168 Go vs. Intermediate Appellate Court | Fernan, C. J. Lingayen, Pangasinan and later, at Camp Holmes, La Trinidad, Benguet. He was
G.R. No. 68138, May 13, 1991 | 197 SCRA 22 shown xerox copies of U.S. Government checks Nos. 5-449-076 and 5-448-890
payable to the order of Floverto Jasmin in the respective amounts of $1,810.00 and
FACTS $913.40. The latter amount was actually for only $13.40; while the records do not
• Floverto Jazmin is an American citizen and retired employee of the United States show the unaltered amount of the other treasury check.
Federal Government. He had been a visitor in the Philippines since 1972 residing at • Jazmin denied that he was the person whose name appeared on the checks; that he
34 Maravilla Street, Mangatarem, Pangasinan. As pensionado of the U.S. government, received the same and that the signature on the indorsement was his. He likewise
he received annuity checks in the amounts of $ 67.00 for disability and $ 620.00 for denied that he opened an account with Solidbank or that he deposited and encashed
retirement through the Mangatarem post office. He used to encash the checks at the therein the said checks. Eventually, the investigators found that the person named
Prudential Bank branch at Clark Air Base, Pampanga. "Floverto Jazmin" who made the deposit and withdrawal with Solidbank was an
• In January, 1975, Jazmin failed to receive one of the checks on time thus prompting impostor.
him to inquire from the post offices at Mangatarem and Dagupan City. As the result • On September 24, 1976, Jazmin filed with the then Court of First Instance of
of his inquiries proved unsatisfactory, on March 4, 1975, Jazmin wrote the U.S. Civil Pangasinan, Branch II at Lingayen a complaint against Agustin Y. Go and the
Service Commission, Bureau of Retirement at Washington, D.C. complaining about Consolidated Bank and Trust Corporation for moral and exemplary damages in the
the delay in receiving his check. Thereafter, he received a substitute check which he total amount of P90,000 plus attorney's fees of P5,000. He alleged therein that Go
encashed at the Prudential Bank at Clark Air Base. allowed the deposit of the dollar checks and the withdrawal of their peso equivalent
• Meanwhile, on April 22, 1975, Agustin Go, in his capacity as branch manager of the "without ascertaining the identity of the depositor considering the highly suspicious
then Solidbank (which later became the Consolidated Bank and Trust Corporation) circumstances under which said deposit was made; that instead of taking steps to
in Baguio City, allowed a person named "Floverto Jazmin" to open Savings Account establish the correct identity of the depositor, Go "immediately and recklessly filed
No. BG 5206 by depositing two (2) U. S. treasury checks Nos. 5-449-076 and 5-448- (the) complaint for estafa through alteration of dollar check" against him; that Go's
890 in the respective amounts of $1810.00 and $913.40 1 equivalent to the total complaint was "an act of vicious and wanton recklessness and clearly intended for
amount of P 20,565.69, both payable to the order of Floverto Jasmin of Maranilla no other purpose than to harass and coerce the plaintiff into paying the peso
St., Mangatarem, Pangasinan and drawn on the First National City Bank, Manila. equivalent of said dollar checks to the CBTC branch office in Baguio City" so that
• The savings account was opened in the ordinary course of business. Thus, the bank, Go would not be "disciplined by his employer;" that by reason of said complaint, he
through its manager Go, required the depositor to fill up the information sheet for was "compelled to present and submit himself" to investigations by the constabulary
new accounts to reflect his personal circumstances. The depositor indicated therein authorities; and that he suffered humiliation and embarrassment as a result of the
that he was Floverto Jazmin with mailing address at Mangatarem, Pangasinan and filing of the complaint against him as well as "great inconvenience" on account of
home address at Maravilla St., Mangatarem, Pangasinan; that he was a Filipino his age (he was a septuagenarian) and the distance between his residence and the
citizen and a security officer of the US Army with the rank of a sergeant bearing constabulary headquarters. He averred that his peace of mind and mental and
AFUS Car No. H-2711659; that he was married to Milagros Bautista; and that his emotional tranquility as a respected citizen of the community would not have
initial deposit was P3,565.35. He wrote CSA No. 138134 under remarks or suffered had Go exercised "a little prudence" in ascertaining the identity of the
instructions and left blank the spaces under telephone number, residence depositor and, for the "grossly negligent and reckless act" of its employee, the
certificate/alien certificate of registration/passport, bank and trade performance and defendant CBTC should also be held responsible. 4
as to who introduced him to the bank. 2 The depositor's signature specimens were • In its decision of March 27, 1978 6 the lower court found that Go was negligent in
also taken. failing to exercise "more care, caution and vigilance" in accepting the checks for
• Thereafter, the deposited checks were sent to the drawee bank for clearance. deposit and encashment. It noted that the checks were payable to the order of
Inasmuch as Solidbank did not receive any word from the drawee bank, after three Floverto Jasmin, Maranilla St., Mangatarem, Pangasinan and not to Floverto Jazmin,
(3) weeks, it allowed the depositor to withdraw the amount indicated in the checks. Maravilla St., Mangatarem, Pangasinan and that the differences in name and address
• On June 29, 1976 or more than a year later, the two dollar cheeks were returned to should have put Go on guard. It held that more care should have been exercised by
Solidbank with the notation that the amounts were altered. 3 Consequently, Go Go in the encashment of the U.S. treasury checks as there was no time limit for
reported the matter to the Philippine Constabulary in Baguio City. returning them for clearing unlike in ordinary checks wherein a two to three-week
• On August 3, 1976, Jazmin received radio messages requiring him to appear before limit is allowed.
the Philippine Constabulary headquarters in Benguet on September 7, 1976 for • Finding that the plaintiff had sufficiently shown that prejudice had been caused to
investigation regarding the complaint filed by Go against him for estafa by passing him in the form of mental anguish, moral shock and social humiliation on account
altered dollar checks. Initially, Jazmin was investigated by constabulary officers in of the defendants' gross negligence, the court, invoking Articles 2176, 2217 and
Page 183 of 528

2219 (10) in conjunction with Article 21 of the Civil Code, ruled in favor of the address on the treasury checks involved and the name and address of the depositor
plaintiff. appearing in the bank's records. The situation would have been different if the
• The defendants appealed to the Court of Appeals. On January 24, 1984, said court treasury checks were tampered with only as to their amounts because the alteration
(then named Intermediate Appellate Court) rendered a decision 7 finding as evident would have been unnoticeable and hard to detect as the herein altered check bearing
negligence Go's failure to notice the substantial difference in the identity of the the amount of $ 913.40 shows. But the error in the name and address of the payee
depositor and the payee in the check, concluded that Go's negligence in the was very patent and could not have escaped the trained eyes of bank officers and
performance of his duties was "the proximate cause why appellant bank was employees. There is therefore, no other conclusion than that the bank through its
swindled" and that denouncing the crime to the constabulary authorities "merely employees (including the tellers who allegedly conducted an identification check on
aggravated the situation." It ruled that there was a cause of action against the the depositor) was grossly negligent in handling the business transaction herein
defendants although Jazmin had nothing to do with the alteration of the checks, involved.
because he suffered damages due to the negligence of Go. Hence, under Article • While at that stage of events private respondent was still out of the picture, it
2180 of the Civil Code, the bank shall be held liable for its manager's negligence. definitely was the start of his consequent involvement as his name was illegally used
• The appellate court, however, disallowed the award of moral and exemplary in the illicit transaction. Again, knowing that its viability depended on the
damages and granted nominal damages instead. confidence reposed upon it by the public, the bank through its employees should
• Accordingly, the appellate court ordered Go and Consolidated Bank and Trust have exercised the caution expected of it.
Corporation to pay jointly and severally Floverto Jazmin only NOMINAL • In crimes and quasi-delicts, the defendant shall be liable for all damages which are the
DAMAGES in the sum of Three Thousand Pesos (P 3,000.00) with interest at six natural and probable consequences of the act or omission complained of. It is not
(6%) percent per annum until fully paid and One Thousand Pesos (P 1,000.00) as necessary that such damages have been foreseen or could have reasonably been
attorney's fees and costs of litigation. foreseen by the defendant. 10 As Go's negligence was the root cause of the
• Go and the bank filed a motion for the reconsideration of said decision contending complained inconvenience, humiliation and embarrassment, Go is liable to private
that in view of the finding of the appellate court that "denouncing a crime is not respondents for damages.
negligence under which a claim for moral damages is available," the award of • Anent petitioner bank's claim that it is not "co-equally liable" with Go for damages,
nominal damages is unjustified as they did not violate or invade Jazmin's rights. under the fifth paragraph of Article 2180 of the Civil Code, "(E)mployers shall be
Corollarily, there being no negligence on the part of Go, his employer may not be liable for the damages caused by their employees . . . acting within the scope of their
held liable for nominal damages. assigned tasks." Pursuant to this provision, the bank is responsible for the acts of its
• The motion for reconsideration having been denied, Go and the bank interposed employee unless there is proof that it exercised the diligence of a good father of a
the instant petition for review on certiorari arguing primarily that the employer bank family to prevent the damage. 11 Hence, the burden of proof lies upon the bank and
may not be held "co-equally liable" to pay nominal damages in the absence of proof it cannot now disclaim liability in view of its own failure to prove not only that it
that it was negligent in the selection of and supervision over its employee. 8 exercised due diligence to prevent damage but that it was not negligent in the
selection and supervision of its employees.
ISSUES & ARGUMENTS
• W/N the respondent appellate court erred in awarding nominal damages ans
attorney’s fees to private respondent.

Although this Court has consistently held that there should be no penalty on the right to
litigate and that error alone in the filing of a case be it before the courts or the proper
police authorities, is not a ground for moral damages, 9 we hold that under the peculiar
circumstances of this case, private respondent is entitled to an award of damages.
• Indeed, it would be unjust to overlook the fact that petitioners' negligence was the
root of all the inconvenience and embarrassment experienced by the private
respondent albeit they happened after the filing of the complaint with the
constabulary authorities. Petitioner Go's negligence in fact led to the swindling of
his employer. Had Go exercised the diligence expected of him as a bank officer and
employee, he would have noticed the glaring disparity between the payee's name and JAY DUHAYLONGSOD
Page 184 of 528

169 PSBA v. Court of Appeals | Padilla earlier indicated, the assailants of Carlitos were not students of the PSBA, for whose acts
G.R. No. 84698 February 4, 1992| 205 SCRA 729 the school could be made liable.
FACTS
• Carlitos Bautista was a third year commerce student in PSBA. In Aug 30, 1985, he
was stabbed while on the 2nd floor of the school, causing his death. It was
established that the assailants were not students of PSBA.
• The parents of Carlitos filed a damage suit against PSBA and its school authorities
for the death of their child.
• Petitioners filed a motion to dismiss, alleging that since they are presumably sued
under Article 2180 of the Civil Code, the complaint states no cause of action against
them, as jurisprudence on the subject is to the effect that academic institutions, such as
the PSBA, are beyond the ambit of the rule in the afore-stated article.
• RTC dismissed the MTD. CA affirmed. The CA ratiocinated as follows:
Article 2180 (formerly Article 1903) of the Civil Code is an adoption from
the old Spanish Civil Code. The comments of Manresa and learned
authorities on its meaning should give way to present day changes. The
law is not fixed and flexible (sic); it must be dynamic. In fact, the greatest
value and significance of law as a rule of conduct in (sic) its flexibility to
adopt to changing social conditions and its capacity to meet the new
challenges of progress.Construed in the light of modern day educational
system, Article 2180 cannot be construed in its narrow concept as held in
the old case of Exconde vs. Capuno and Mercado vs. Court of Appeals; hence,
the ruling in the Palisoc case that it should apply to all kinds of educational
institutions, academic or vocational.At any rate, the law holds the teachers
and heads of the school staff liable unless they relieve themselves of such
liability pursuant to the last paragraph of Article 2180 by "proving that
they observed all the diligence to prevent damage." This can only be done
at a trial on the merits of the case.
ISSUES & ARGUMENTS

• W/N PSBA and its school authorities are vicariously liable for the death of
Carlitos Bautista inside its premises.
NO, THEY ARE NOT LIABLE.

• Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule
of in loco parentis. This Court discussed this doctrine in the afore-cited cases of
Exconde, Mendoza, Palisoc and, more recently, in Amadora vs. Court of Appeals. 6 In all
such cases, 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 he 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
JOHN FADRIGO
Page 185 of 528

170 Jose V. CA | • Article 2180 of the Civil Code makes the persons specified therein responsible for
G.R. 118441 January 18, 2000 | the quasi-delicts of others. The burden is upon MCL to prove that Juanita Macarubo
is one of those specified persons who are vicariously liable for the negligence of the
FACTS deceased John Macarubo.
• Petitioner Manila Central Bus Lines Corporation (MCL) is the operator-lessee of a • In its third-party complaint, MCL alleged that Juanita Macarubo was the registered
public utility bus (hereafter referred to as Bus 203) with plate number NVR-III-TB- owner of the Ford Escort car and that John Macarubo was the "authorized driver"
PIL and body number 203. Bus 203 is owned by the Metro Manila Transit of the car. Nowhere was it alleged that John Macarubo was the son, ward, employee
Corporation and is insured with the Government Service Insurance System. or pupil of private respondent Juanita Macarubo so as to make the latter vicariously
• On February 22, 1985, at around six o’clock in the morning, Bus 203, then driven by liable for the negligence of John Macarubo. The allegation that John Macarubo was
petitioner Armando Jose, collided with a red Ford Escort driven by John Macarubo "the authorized driver" of the Ford Escort is not equivalent to an allegation that he
on MacArthur Highway, in Marulas, Valenzuela, Metro Manila. Bus 203 was bound was an employee of Juanita Macarubo. That John Macarubo was the "authorized
for Muntinlupa, Rizal, while the Ford Escort was headed towards Malanday, driver" of the car simply means that he drove the Ford Escort with the permission
Valenzuela on the opposite lane. As a result of the collision, the left side of the Ford of Juanita Macarubo..
Escort’s hood was severely damaged while its driver, John Macarubo, and its lone • Nor did MCL present any evidence to prove that Juanita Macarubo was the
passenger, private respondent Rommel Abraham, were seriously injured. The driver employer of John Macarubo or that she is in any way liable for John Macarubo’s
and conductress of Bus 203 rushed Macarubo and Abraham to the nearby Fatima negligence under Art. 2180 of the Civil Code. For failure to discharge its burden,
Hospital where Macarubo lapsed into a coma. Despite surgery, Macarubo failed to MCL’s third-party complaint should be dismissed.
recover and died five days later. Abraham survived, but he became blind on the left
eye which had to be removed. In addition, he sustained a fracture on the forehead
and multiple lacerations on the face, which caused him to be hospitalized for a
week.
• On March 26, 1985, Rommel Abraham, represented by his father, Felixberto,
instituted Civil Case No. 2206-V-85 for damages against petitioners MCL and
Armando Jose in the Regional Trial Court, Branch 172, Valenzuela.
• On July 17, 1986, the spouses Jose and Mercedes Macarubo, parents of the deceased
John Macarubo, filed their own suit for damages in the same trial court.
ISSUES & ARGUMENTS

• W/N MCL is liable?

No.
• Under the circumstances of this case, we hold that proof of due diligence in the
selection and supervision of employees is not required. Before the presumption of
the employer’s negligence in the selection and supervision of its employees can arise,
the negligence of the employee must first be established. While the allegations of
negligence against the employee and that of an employer-employee relation in the
complaint are enough to make out a case of quasi-delict under Art. 2180 of the Civil
Code, the failure to prove the employee’s negligence during the trial is fatal to
proving the employer’s vicarious liability. In this case, private respondents failed to
prove their allegation of negligence against driver Armando Jose who, in fact, was
acquitted in the case for criminal negligence arising from the same incident.
• For the foregoing reasons, we hold that the appellate court erred in holding
petitioners liable to private respondents. The next question then is whether, as the
trial court held, private respondent Juanita Macarubo is liable to petitioners. J.C. LERIT
Page 186 of 528

171 Castilex vs. Vasquez | Kapunan enabled to reduce his time-off and so devote more time to the
G.R. No. 129329, July 31, 2001 | 362 SCRA 56 performance of his duties supports the finding that an employee is acting
within the scope of his employment while so driving the vehicle.
FACTS o Traveling to and from the place of work is ordinarily a personal problem
• On 28 August 1988, at around 1:30 to 2:00 in the morning, Romeo So Vasquez, was or concern of the employee, and not a part of his services to his employer.
driving a Honda motorcycle around Fuente Osmeña Rotunda. He was traveling Hence, in the absence of some special benefit to the employer other than
counter-clockwise, (the normal flow of traffic in a rotunda) but without any the mere performance of the services available at the place where he is
protective helmet or goggles. He was also only carrying a Student's Permit to Drive needed, the employee is not acting within the scope of his employment
at the time. even though he uses his employer's motor vehicle.
• Upon the other hand, Benjamin Abad was a production manager of Castilex o An employer who loans his motor vehicle to an employee for the latter's
Industrial Corporation, registered owner of the Toyota Hi-Lux Pick-up with plate personal use outside of regular working hours is generally not liable for the
no. GBW-794 which Abad drove car out of a parking lot. Instead of going around employee's negligent operation of the vehicle during the period of
the Osmeña rotunda he went against the flow of the traffic in proceeding to his permissive use, even where the employer contemplates that a regularly
route to General Maxilom St. or to Belvic St.. assigned motor vehicle will be used by the employee for personal as well as
• The motorcycle of Vasquez and the pick-up of Abad collided with each other business purposes and there is some incidental benefit to the employer.
causing severe injuries to Vasquez. Abad stopped his vehicle and brought Vasquez Even where the employee's personal purpose in using the vehicle has been
to the Southern Islands Hospital and later to the Cebu Doctor's Hospital. accomplished and he has started the return trip to his house where the
• On September 5, 1988, Vasquez died at the Cebu Doctor's Hospital. Abad signed an vehicle is normally kept, it has been held that he has not resumed his
acknowledgment of Responsible Party wherein he agreed to pay whatever hospital employment, and the employer is not liable for the employee's negligent
bills, professional fees and other incidental charges Vasquez may incur. operation of the vehicle during the return trip.
• In this case , ABAD did some overtime work at the petitioner's office, which was
ISSUES & ARGUMENTS located in Cabangcalan, Mandaue City. Thereafter, he went to Goldie's Restaurant in
• W/N Castilex may be held vicariously liable for the death resulting from Fuente Osmeña, Cebu City, which is about seven kilometers away from petitioner's
the negligent operation by a managerial employee of a company-issued place of business. At the Goldie's Restaurant, ABAD took some snacks and had a
vehicle. chat with friends. It was when ABAD was leaving the restaurant that the incident in
• Petitioner CASTILEX presumes said negligence but claims that it is not question occurred. Thus ABAD was engaged in affairs of his own or was carrying
vicariously liable for the injuries and subsequent death caused by ABAD out a personal purpose not in line with his duties at the time he figured in a
vehicular accident.
HOLDING & RATIO DECIDENDI • It was then about 2:00 a.m. of 28 August 1988, way beyond the normal working
hours. ABAD's working day had ended; his overtime work had already been
No. completed. His being at a place which, as petitioner put it, was known as a "haven
for prostitutes, pimps, and drug pushers and addicts," had no connection to
• The fifth paragraph of article 2180 states Employers shall be liable for the petitioner's business; neither had it any relation to his duties as a manager. Rather,
damages caused by their employees and household helpers acting within the using his service vehicle even for personal purposes was a form of a fringe baenefit
scope of their assigned tasks, even though the former are not engaged in any or one of the perks attached to his position.
business or industry. • Since there is paucity of evidence that ABAD was acting within the scope of the
• In order for this paragraph to apply, it must be shown that the employee was acting functions entrusted to him, petitioner CASTILEX had no duty to show that it
within the scope of his assigned tasks. Here it was not sufficiently proven that such exercised the diligence of a good father of a family in providing ABAD with a
was the case. service vehicle. Thus, justice and equity require that petitioner be relieved of
• Jurisprudence provides: vicarious liability for the consequences of the negligence of ABAD in driving its
o An employee who uses his employer's vehicle in going from his work to a vehicle
place where he intends to eat or in returning to work from a meal is not
ordinarily acting within the scope of his employment in the absence of
evidence of some special business benefit to the employer. Evidence that
by using the employer's vehicle to go to and from meals, an employee is GINO CAPATI
Page 187 of 528

172 Franco vs. IAC | who should stand as accused died in the accident. Therefore, there is no basis for
G.R. No. 71137 October 5, 1989 | the employer’s subsidiary liability, without the employee’s primary liability. It follows
that the liability being sued upon is based not on crime, but on culpa aquiliana,
FACTS where the defense of the exercise of the diligence of a good father of a family may
• Yulo was driving a Franco Bus when he swerved to the opposite lane to avoid be raised by the employer.
colliding with a parked truck. The Franco Bus took the lane of an incoming Isuzu • The employers are liable since they failed to prove that they exercised the diligence
Mini Bus driven by Lugue. The two vehicles collided, resulting in the deaths of both of a good father of a family in selecting and/or supervising the driver. They
drivers and two passengers of the Mini Bus. The owner of the Isuzu Mini Bus, the admitted that the only kind of supervision given to the drivers referred to the
wife of one of the passengers who died, and the wife of the driver of the Mini Bus running time between the terminal points of the line. They only had two inspectors
filed an action for damages against Mr. and Mrs. Franco, owners of the Franco whose duties were only ticket inspections. There is no evidence that they were really
Transportation Company. safety inspectors.
• The spouses set up the defense that they exercised the diligence of a good father of
a family in selecting and supervising their employees, including the deceased driver.
The RTC held that this defense of due diligence could not be invoked by the
spouses since the case was one for criminal negligence punishable under Article 102
and 103 of the Revised Penal Code and not from Article 2180 of the Civil Code. It
held the spouses liable for damages to the family of the deceased. The CA agreed
with the lower court.
ISSUES & ARGUMENTS

• W/N spouses Franco, as employer, may invoke the defense of diligence of a
good father of a family in denying their liabilities against the victims.
YES. The action is predicated upon quasi delict, not upon crime. Hence, the
defense of due diligence can be invoked by the defendants. However, in this case,
the spouses were not able to prove such due diligence. Therefore, they are liable
for damages under Article 2180 of the Civil Code.
• Distinction should be made between the subsidiary liability of the employer under
the RPC and the employer’s primary liability under the Civil Code, which is quasi-
delictual or tortious in character. The first type of liability is governed by Articles
102 and 103 of the RPC, which provide that employers have subsidiary civil liability
in default of their employees who commit felonies in the discharge of their duties.
• The second kind is governed by Articles 2176, 2177, and 2180 of the Civil Code on
the vicarious liability of employers for those damages caused by their employees
acting within the scope of their assigned tasks. In this second kind, the employer’s
liability ceases upon proof that he observed all the diligence of a good father of a
family to prevent damage. Under Article 103 of the RPC, the liability of the
employer is subsidiary to the liability of the employee. Before the employer’s
subsidiary liability may be proceeded against, it is imperative that there should be a
criminal action where the employee’s criminal negligence are proved. Without such
criminal action being instituted, the employer’s liability cannot be predicated under
Article 103. In this case, there was no criminal action instituted because the driver JON LINA
Page 188 of 528

173 China Airlines vs. CA | HOLDING & RATIO DECIDENDI
G.R. No. 45985 May 18, 1990 | 185 SCRA 449
CHINA AIRLINES IS NOT LIABLE FOR NEGLIGENCE OF EMPLOYEE
FACTS OF ITS TICKETING AGENT (ANOTHER AIRLINE). ONLY PHILIPPINE
• Panganiban was Vice President and General Manager of Rentokil Inc., a local AIRLINES IS LIABLE.
insecticide company. He had a meeting with a certain Peng Siong Lim, President of
the Union Taiwan Chemical Corporation, scheduled at 9:00 a.m. on June 11, 1988. • There is indeed no basis whatsoever to hold China Airlines liable on a quasi-delict or
• He bought a China Arilines ticket to Tapei through his travel agent. His travel agent culpa aquiliana. The court a quo absolved China Airlines of any liability for fault or
coursed the transaction to the Philippine Airlines Office in Manila Hotel which was negligence. China Airlines did not contribute to the negligence committed
the ticket sales agent of China Airlines, here in the Philippines. The officer who Philippine Airlines and Roberto Espiritu.
aided in the sale was Mr. Espiritu. • China Airlines was not the employer of Philippine Airlines or Espiritu. It has been
• The ticket stated that the flight was to leave at 5:20pm of June 10. When established in jurisprudence that there is a need to ascertain the existence of an
Panganiban arrived at airport an hour earlier than the time of the flight. The employer-employee relationship before an employer may be vicariously liable under
attendant, however, informed him that the flight had left at 10:20 AM. Philippine Article 2180 of the Civil Code.
Airlines arranged that he be in the next flight to Tapei on the following day. • PAL is liable for negligence of its employees even if PAL was acting as ticketing
• Unknown to the Philippine Airlines officer in Manila Hotel, all flights of China agents of China Airlines. There is no question that the contractual relation between
Airlines to Tapei were changed from 5:20 PM to 10L20 AM starting April 1988. both airlines is one of agency. In an action premised on the employee's negligence,
PAL had not changed their protocol even if China Airline had sent them printed whereby Pagsibigan seeks recovery for the resulting damages from both PAL and
copies of change in protocol. Espiritu without qualification, what is sought to be imposed is the direct and
• Panganiban filed a complaint against China Airlines for damages because he primary liability of PAL as an employer under said Article 2180.
allegedly experienced humiliation, besmirched reputation, embarrassment, mental
anguish, wounded feelings and sleepless nights, inasmuch as when he went to the
airport, he was accompanied by his business associates, close friends and relatives.
• The Court found China Airlines liable for damages.
ISSUES & ARGUMENTS

• W/N the Court was correct in holding China Airlines liable for the damage
caused by Mr. Espiritu who was an employee of Philippine Airlines.
o Petitioner: Mr. Espiritu was liable for the injury in misinforming the
travel agent of Panganiban. He is an employee of Philippine Airlines.
This Airline (ChinaAir) notified PAL of the changes in schedules early
or. Therefore they cannot be held solidarily liable.
o Respondent: It is an admitted fact that PAL is an authorized agent of
CAL. In this relationship, the responsibility of defendant PAL for the
tortious act of its agent or representative is inescapable.
MIK MALANG
Page 189 of 528
174 Go vs. Intermediate Appellate Court | Fernan, C. J. Lingayen, Pangasinan and later, at Camp Holmes, La Trinidad, Benguet. He was
G.R. No. 68138, May 13, 1991 | 197 SCRA 22 shown xerox copies of U.S. Government checks Nos. 5-449-076 and 5-448-890
payable to the order of Floverto Jasmin in the respective amounts of $1,810.00 and
FACTS $913.40. The latter amount was actually for only $13.40; while the records do not
• Floverto Jazmin is an American citizen and retired employee of the United States show the unaltered amount of the other treasury check.
Federal Government. He had been a visitor in the Philippines since 1972 residing at • Jazmin denied that he was the person whose name appeared on the checks; that he
34 Maravilla Street, Mangatarem, Pangasinan. As pensionado of the U.S. government, received the same and that the signature on the indorsement was his. He likewise
he received annuity checks in the amounts of $ 67.00 for disability and $ 620.00 for denied that he opened an account with Solidbank or that he deposited and encashed
retirement through the Mangatarem post office. He used to encash the checks at the therein the said checks. Eventually, the investigators found that the person named
Prudential Bank branch at Clark Air Base, Pampanga. "Floverto Jazmin" who made the deposit and withdrawal with Solidbank was an
• In January, 1975, Jazmin failed to receive one of the checks on time thus prompting impostor.
him to inquire from the post offices at Mangatarem and Dagupan City. As the result • On September 24, 1976, Jazmin filed with the then Court of First Instance of
of his inquiries proved unsatisfactory, on March 4, 1975, Jazmin wrote the U.S. Civil Pangasinan, Branch II at Lingayen a complaint against Agustin Y. Go and the
Service Commission, Bureau of Retirement at Washington, D.C. complaining about Consolidated Bank and Trust Corporation for moral and exemplary damages in the
the delay in receiving his check. Thereafter, he received a substitute check which he total amount of P90,000 plus attorney's fees of P5,000. He alleged therein that Go
encashed at the Prudential Bank at Clark Air Base. allowed the deposit of the dollar checks and the withdrawal of their peso equivalent
• Meanwhile, on April 22, 1975, Agustin Go, in his capacity as branch manager of the "without ascertaining the identity of the depositor considering the highly suspicious
then Solidbank (which later became the Consolidated Bank and Trust Corporation) circumstances under which said deposit was made; that instead of taking steps to
in Baguio City, allowed a person named "Floverto Jazmin" to open Savings Account establish the correct identity of the depositor, Go "immediately and recklessly filed
No. BG 5206 by depositing two (2) U. S. treasury checks Nos. 5-449-076 and 5-448- (the) complaint for estafa through alteration of dollar check" against him; that Go's
890 in the respective amounts of $1810.00 and $913.40 1 equivalent to the total complaint was "an act of vicious and wanton recklessness and clearly intended for
amount of P 20,565.69, both payable to the order of Floverto Jasmin of Maranilla no other purpose than to harass and coerce the plaintiff into paying the peso
St., Mangatarem, Pangasinan and drawn on the First National City Bank, Manila. equivalent of said dollar checks to the CBTC branch office in Baguio City" so that
• The savings account was opened in the ordinary course of business. Thus, the bank, Go would not be "disciplined by his employer;" that by reason of said complaint, he
through its manager Go, required the depositor to fill up the information sheet for was "compelled to present and submit himself" to investigations by the constabulary
new accounts to reflect his personal circumstances. The depositor indicated therein authorities; and that he suffered humiliation and embarrassment as a result of the
that he was Floverto Jazmin with mailing address at Mangatarem, Pangasinan and filing of the complaint against him as well as "great inconvenience" on account of
home address at Maravilla St., Mangatarem, Pangasinan; that he was a Filipino his age (he was a septuagenarian) and the distance between his residence and the
citizen and a security officer of the US Army with the rank of a sergeant bearing constabulary headquarters. He averred that his peace of mind and mental and
AFUS Car No. H-2711659; that he was married to Milagros Bautista; and that his emotional tranquility as a respected citizen of the community would not have
initial deposit was P3,565.35. He wrote CSA No. 138134 under remarks or suffered had Go exercised "a little prudence" in ascertaining the identity of the
instructions and left blank the spaces under telephone number, residence depositor and, for the "grossly negligent and reckless act" of its employee, the
certificate/alien certificate of registration/passport, bank and trade performance and defendant CBTC should also be held responsible. 4
as to who introduced him to the bank. 2 The depositor's signature specimens were • In its decision of March 27, 1978 6 the lower court found that Go was negligent in
also taken. failing to exercise "more care, caution and vigilance" in accepting the checks for
• Thereafter, the deposited checks were sent to the drawee bank for clearance. deposit and encashment. It noted that the checks were payable to the order of
Inasmuch as Solidbank did not receive any word from the drawee bank, after three Floverto Jasmin, Maranilla St., Mangatarem, Pangasinan and not to Floverto Jazmin,
(3) weeks, it allowed the depositor to withdraw the amount indicated in the checks. Maravilla St., Mangatarem, Pangasinan and that the differences in name and address
• On June 29, 1976 or more than a year later, the two dollar cheeks were returned to should have put Go on guard. It held that more care should have been exercised by
Solidbank with the notation that the amounts were altered. 3 Consequently, Go Go in the encashment of the U.S. treasury checks as there was no time limit for
reported the matter to the Philippine Constabulary in Baguio City. returning them for clearing unlike in ordinary checks wherein a two to three-week
• On August 3, 1976, Jazmin received radio messages requiring him to appear before limit is allowed.
the Philippine Constabulary headquarters in Benguet on September 7, 1976 for • Finding that the plaintiff had sufficiently shown that prejudice had been caused to
investigation regarding the complaint filed by Go against him for estafa by passing him in the form of mental anguish, moral shock and social humiliation on account
altered dollar checks. Initially, Jazmin was investigated by constabulary officers in of the defendants' gross negligence, the court, invoking Articles 2176, 2217 and
Page 190 of 528

2219 (10) in conjunction with Article 21 of the Civil Code, ruled in favor of the address on the treasury checks involved and the name and address of the depositor
plaintiff. appearing in the bank's records. The situation would have been different if the
• The defendants appealed to the Court of Appeals. On January 24, 1984, said court treasury checks were tampered with only as to their amounts because the alteration
(then named Intermediate Appellate Court) rendered a decision 7 finding as evident would have been unnoticeable and hard to detect as the herein altered check bearing
negligence Go's failure to notice the substantial difference in the identity of the the amount of $ 913.40 shows. But the error in the name and address of the payee
depositor and the payee in the check, concluded that Go's negligence in the was very patent and could not have escaped the trained eyes of bank officers and
performance of his duties was "the proximate cause why appellant bank was employees. There is therefore, no other conclusion than that the bank through its
swindled" and that denouncing the crime to the constabulary authorities "merely employees (including the tellers who allegedly conducted an identification check on
aggravated the situation." It ruled that there was a cause of action against the the depositor) was grossly negligent in handling the business transaction herein
defendants although Jazmin had nothing to do with the alteration of the checks, involved.
because he suffered damages due to the negligence of Go. Hence, under Article • While at that stage of events private respondent was still out of the picture, it
2180 of the Civil Code, the bank shall be held liable for its manager's negligence. definitely was the start of his consequent involvement as his name was illegally used
• The appellate court, however, disallowed the award of moral and exemplary in the illicit transaction. Again, knowing that its viability depended on the
damages and granted nominal damages instead. confidence reposed upon it by the public, the bank through its employees should
• Accordingly, the appellate court ordered Go and Consolidated Bank and Trust have exercised the caution expected of it.
Corporation to pay jointly and severally Floverto Jazmin only NOMINAL • In crimes and quasi-delicts, the defendant shall be liable for all damages which are the
DAMAGES in the sum of Three Thousand Pesos (P 3,000.00) with interest at six natural and probable consequences of the act or omission complained of. It is not
(6%) percent per annum until fully paid and One Thousand Pesos (P 1,000.00) as necessary that such damages have been foreseen or could have reasonably been
attorney's fees and costs of litigation. foreseen by the defendant. 10 As Go's negligence was the root cause of the
• Go and the bank filed a motion for the reconsideration of said decision contending complained inconvenience, humiliation and embarrassment, Go is liable to private
that in view of the finding of the appellate court that "denouncing a crime is not respondents for damages.
negligence under which a claim for moral damages is available," the award of • Anent petitioner bank's claim that it is not "co-equally liable" with Go for damages,
nominal damages is unjustified as they did not violate or invade Jazmin's rights. under the fifth paragraph of Article 2180 of the Civil Code, "(E)mployers shall be
Corollarily, there being no negligence on the part of Go, his employer may not be liable for the damages caused by their employees . . . acting within the scope of their
held liable for nominal damages. assigned tasks." Pursuant to this provision, the bank is responsible for the acts of its
• The motion for reconsideration having been denied, Go and the bank interposed employee unless there is proof that it exercised the diligence of a good father of a
the instant petition for review on certiorari arguing primarily that the employer bank family to prevent the damage. 11 Hence, the burden of proof lies upon the bank and
may not be held "co-equally liable" to pay nominal damages in the absence of proof it cannot now disclaim liability in view of its own failure to prove not only that it
that it was negligent in the selection of and supervision over its employee. 8 exercised due diligence to prevent damage but that it was not negligent in the
selection and supervision of its employees.
ISSUES & ARGUMENTS
• W/N the respondent appellate court erred in awarding nominal damages ans
attorney’s fees to private respondent.

Although this Court has consistently held that there should be no penalty on the right to
litigate and that error alone in the filing of a case be it before the courts or the proper
police authorities, is not a ground for moral damages, 9 we hold that under the peculiar
circumstances of this case, private respondent is entitled to an award of damages.
• Indeed, it would be unjust to overlook the fact that petitioners' negligence was the
root of all the inconvenience and embarrassment experienced by the private
respondent albeit they happened after the filing of the complaint with the
constabulary authorities. Petitioner Go's negligence in fact led to the swindling of
his employer. Had Go exercised the diligence expected of him as a bank officer and
employee, he would have noticed the glaring disparity between the payee's name and JAY DUHAYLONGSOD
Page 191 of 528

175 Soliman vs. Tuazon | Feliciano regard to the liability of teachers and heads is also not available to make Republic
G.R. No. 66207, May 18, 1992 | 209 SCRA 47 liable for damages.
• Nevertheless, Republic may be held liable on the basis of an implied contract
FACTS between it and Soliman, because of its obligation to maintain peace and order within
• Petitioner Soliman Jr. filed a civil complaint for damages against respondents the campus premises and to prevent the breakdown thereof. Should this be the case,
Republic Central Colleges, R.L. Security Agency, and Solomon, a security guard at the school may still avoid liability by proving that the breach of its contractual
Republic. obligation to the students was not due to its negligence, here statutorily defined to
• The complaint alleges that one morning, while Soliman was in the premises of be the omission of that degree of diligence which is required by the nature of
Republic, as he was still a regular enrolled student, Solomon with intent to kill obligation and corresponding to the circumstances of person, time and place.
attacked and shot him in the abdomen. It is further alleged that such wound would • Respondent trial judge was in serious error when he supposed that petitioner could
have caused his death, were it not for timely medical assistance, and because of this have no cause of action other than one based on Article 2180 of the Civil Code.
he may not be able to attend his regular classes and perform his usual work from Respondent trial judge should not have granted the motion to dismiss but rather
three to four months. should have, in the interest of justice, allowed petitioner to prove acts constituting
• Republic Colleges filed a motion to dismiss, contending that Soliman had no action breach of an obligation ex contractu or ex lege on the part of respondent Colleges.
against it. It averred that it should be free from liability because it was not the
employer of the security guard. Moreover, Article 2180 (7th paragraph) did not Petition GRANTED. Order REVERSED AND SET ASIDE. Case REMANDED to the
apply, since such holds teachers and heads responsible only for damages caused by court a quo for further proceedings.
their pupils and students/apprentices.
• The MTD was granted by the judge. Hence this instant petition.
ISSUES & ARGUMENTS

• W/N Republic Central Colleges may be held liable for damages.
REPUBLIC CENTRAL COLLEGES MAY NOT BE HELD LIABLE FOR

DAMAGES UNDER ARTICLE 2180 (AS AN EMPLOYER). HOWEVER, IT
MAY BE LIABLE ON THE BASIS OF AN IMPLIED CONTRACT.
• Under Article 2180 of the NCC, employers shall be liable for the damages
caused by their employees and household helpers acting within the scope of
their assigned tasks, even though the former are not engaged in any business
or industry. Also, teachers or heads of establishments of arts and trades shall be
liable for damages caused by their pupils, their students or apprentices, so long as
they remain in their custody.
• There is no basis to hold Republic liable under Article 2180. The employer of
security guard Solomon was R.L. Security Agency Inc. Where the security
agency, as here, recruits, hires and assigns the work of its watchmen or security
guards, the agency is the employer of such guards or watchmen. Liability for illegal
or harmful acts committed by the security guards attaches to the employer agency,
and not to the clients or customers of such agency.
• The fact that a client company may give instructions or directions to the security
guards assigned to it, does not, by itself, render the client responsible as an
employer.
• Solomon was neither a pupil nor a student of Republic. Hence, the provision with KATH MATIBAG
Page 192 of 528

176 Castilex v. Vazquez| Kapunan
G.R. No. 132266. December 21, 1999
FACTS
• Between 1:30 to 2:00 am , Romeo Vazquez was driving a motorcycle while
Benjamin Abad was driving a pick-up owned by CAstilex. Instead of going around
the Rotunda, he made a shortcut. He traversed against the flow of traffic. As a reslt
thereof, the pick-up collided with the motorcycle resulting in the severe injuries of
Vazquez. While in the hospital, Vazquez died.
ISSUES & ARGUMENTS

• W/N as employer of Abad, Castilex should be held liable for the damage
caused by its employee
Castilex is not Liable.
• Under Article 2180, Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even though the former are not
engaged in any business or industry. In order for this paragraph to apply, it must be
shown that the employee was acting within the scope of his assigned tasks. Here it
was not sufficiently proven that such was the case.
• It is the obligation of the plaintiff to prove that the employee is not acting within the
scope of its duty.Jurisprudence provides that, an employer who loans his motor vehicle to an
employee for the latter's personal use outside of regular working hours is generally not liable for the
employee's negligent operation of the vehicle during the period of permissive use, even where the
employer contemplates that a regularly assigned motor vehicle will be used by the employee for
personal as well as business purposes and there is some incidental benefit to the employer. Even
where the employee's personal purpose in using the vehicle has been accomplished and he has started
the return trip to his house where the vehicle is normally kept, it has been held that he has not
resumed his employment, and the employer is not liable for the employee's negligent operation of the
vehicle during the return trip.
• In this case, Abad did some overtime work at the petitioner's office, and after he
went out to grab some dinner. It was when he left the restaurant that the incident in
question occurred. Abad was engaged in affairs of his own or was carrying out a
personal purpose not in line with his duties at the time he figured in a vehicular
accident.
NINA MEIJA
Page 193 of 528

177 Jose V. CA | • Article 2180 of the Civil Code makes the persons specified therein responsible for
G.R. 118441 January 18, 2000 | the quasi-delicts of others. The burden is upon MCL to prove that Juanita Macarubo
is one of those specified persons who are vicariously liable for the negligence of the
FACTS deceased John Macarubo.
• Petitioner Manila Central Bus Lines Corporation (MCL) is the operator-lessee of a • In its third-party complaint, MCL alleged that Juanita Macarubo was the registered
public utility bus (hereafter referred to as Bus 203) with plate number NVR-III-TB- owner of the Ford Escort car and that John Macarubo was the "authorized driver"
PIL and body number 203. Bus 203 is owned by the Metro Manila Transit of the car. Nowhere was it alleged that John Macarubo was the son, ward, employee
Corporation and is insured with the Government Service Insurance System. or pupil of private respondent Juanita Macarubo so as to make the latter vicariously
• On February 22, 1985, at around six o’clock in the morning, Bus 203, then driven by liable for the negligence of John Macarubo. The allegation that John Macarubo was
petitioner Armando Jose, collided with a red Ford Escort driven by John Macarubo "the authorized driver" of the Ford Escort is not equivalent to an allegation that he
on MacArthur Highway, in Marulas, Valenzuela, Metro Manila. Bus 203 was bound was an employee of Juanita Macarubo. That John Macarubo was the "authorized
for Muntinlupa, Rizal, while the Ford Escort was headed towards Malanday, driver" of the car simply means that he drove the Ford Escort with the permission
Valenzuela on the opposite lane. As a result of the collision, the left side of the Ford of Juanita Macarubo..
Escort’s hood was severely damaged while its driver, John Macarubo, and its lone • Nor did MCL present any evidence to prove that Juanita Macarubo was the
passenger, private respondent Rommel Abraham, were seriously injured. The driver employer of John Macarubo or that she is in any way liable for John Macarubo’s
and conductress of Bus 203 rushed Macarubo and Abraham to the nearby Fatima negligence under Art. 2180 of the Civil Code. For failure to discharge its burden,
Hospital where Macarubo lapsed into a coma. Despite surgery, Macarubo failed to MCL’s third-party complaint should be dismissed.
recover and died five days later. Abraham survived, but he became blind on the left
eye which had to be removed. In addition, he sustained a fracture on the forehead
and multiple lacerations on the face, which caused him to be hospitalized for a
week.
• On March 26, 1985, Rommel Abraham, represented by his father, Felixberto,
instituted Civil Case No. 2206-V-85 for damages against petitioners MCL and
Armando Jose in the Regional Trial Court, Branch 172, Valenzuela.
• On July 17, 1986, the spouses Jose and Mercedes Macarubo, parents of the deceased
John Macarubo, filed their own suit for damages in the same trial court.
ISSUES & ARGUMENTS

• W/N MCL is liable?

No.
• Under the circumstances of this case, we hold that proof of due diligence in the
selection and supervision of employees is not required. Before the presumption of
the employer’s negligence in the selection and supervision of its employees can arise,
the negligence of the employee must first be established. While the allegations of
negligence against the employee and that of an employer-employee relation in the
complaint are enough to make out a case of quasi-delict under Art. 2180 of the Civil
Code, the failure to prove the employee’s negligence during the trial is fatal to
proving the employer’s vicarious liability. In this case, private respondents failed to
prove their allegation of negligence against driver Armando Jose who, in fact, was
acquitted in the case for criminal negligence arising from the same incident.
• For the foregoing reasons, we hold that the appellate court erred in holding
petitioners liable to private respondents. The next question then is whether, as the
trial court held, private respondent Juanita Macarubo is liable to petitioners. J.C. LERIT
Page 194 of 528

178 Victory Liner vs. Heirs of Malecdan | Mendoza • In the selection of prospective employees, employers are required to examine them
G.R. No. 154278, December 27, 2002 | as to their qualifications, experience and service records. With respect to the
supervision of employees, employers must formulate standard operating procedures,
FACTS monitor their implementation and impose disciplinary measures for breaches
• Malecdan was a 75 year-old farmer. While crossing the National Highway on his way thereof. These facts must be shown by concrete proof, including documentary
home from the farm, a Dalin Liner bus on the southbound lane stopped to allow evidence.
him and his carabao to pass. However, as Andres was crossing the highway, a bus • In the instant case, petitioner presented the results of Joson, Jr.'s written
of petitioner Victory Liner, driven by Joson bypassed the Dalin bus. In so doing, examination, actual driving tests, x-ray examination, psychological examination, NBI
respondent hit the old man and the carabao on which he was riding. As a result, clearance, physical examination, hematology examination, urinalysis, student driver
Malecdan was thrown off the carabao, while the beast toppled over. The Victory training, shop training, birth certificate, high school diploma and reports from the
Liner bus sped past the old man, while the Dalin bus proceeded to its destination General Maintenance Manager and the Personnel Manager showing that he had
without helping him. passed all the tests and training sessions and was ready to work as a professional
• The incident was witnessed by Malecdan's neighbor, Lorena, who was resting in a driver. However, as the trial court noted, petitioner did not present proof that
nearby waiting shed after working on his farm. Malecdan sustained a wound on his Joson, Jr. had nine years of driving experience.
left shoulder, from which bone fragments protruded. He was taken by Lorena and
another person to the Hospital where he died a few hours after arrival. The carabao Petition denied. Decision of Court of Appeals Affirmed.
also died soon afterwards. Subsequently, a criminal complaint for reckless
imprudence resulting in homicide and damage to property was filed against the
Victory Liner bus driver Joson.
• Private respondents brought this suit for damages in the Regional Trial Court,
which, in a decision rendered on July 17, 2000, found the driver guilty of gross
negligence in the operation of his vehicle and Victory Liner, Inc. also guilty of gross
negligence in the selection and supervision of Joson, Jr. Petitioner and its driver
were held liable for damages.
ISSUES & ARGUMENTS

• W/N Victory Liner as employer of the driver Joson is vicariously liable for the
heirs of the victim Malecdan.
VICTORY LINER IS VICARIOUSLY LIABLE FOR THE NEGLIGENCE OF

ITS EMPLOYEE DRIVER.
• Article 2180 provides for the solidary liability of an employer for the quasi-delict
committed by an employee. The responsibility of employers for the negligence of
their employees in the performance of their duties is primary and, therefore, the
injured party may recover from the employers directly, regardless of the solvency of
their employees.
• Employers may be relieved of responsibility for the negligent acts of their employees
acting within the scope of their assigned task only if they can show that "they
observed all the diligence of a good father of a family to prevent damage." For this
purpose, they have the burden of proving that they have indeed exercised such
diligence, both in the selection of the employee and in the supervision of the
performance of his duties. MAUI MORALES
Page 195 of 528

179 Delsan Transport Lines Inc. v C&A Construction | Ynares-Santiago.
G.R. No. 156034, October 1, 2003 |
FACTS
• NHA contracted with C&A to build a deflector wall for Vitas Reclamation Area in
Vitas, Tondo. Project was finished in 1994. In October 20, 1994 12mn Captain
Jusep of Delsan lines owned ship M/V Delsan express received information that
there was a typhoon coming in from Japan. At 8.35AM M/V Delsan Express
attempted to get into North Harbor but could not. 10.00AM M/V Delsan Express
dropped anchor off of Vitas 4 miles away from Napocor barge. M/V Delsan
Express nearly collided with the Napocor barge but managed to avoid it and instead
hit the deflector wall causing almost 500,000 in damage. Petitioner refused to pay
and thus a civil case was filed against Delsan by C&A. TC Ruled emergency rule
applied, CA found captain negligent.
ISSUES & ARGUMENTS

• W/N Captain Jusep is negligent
• W/N under Art. 2180 Delsan liable for the quasi-delict
Captain Jusep is negligent by waiting for 8.35AM before bringing the ship to
North Harbor
Petitioners are vicariously liable under 2180
• Art. 2176 of the Civil Code states that whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done.
Captain Jusep received the report 12MN and waited for more than 8 hours to move
the ship, he likewise ignored the weather report and in all angles failed to take action
to prevent the damage.
• Under Art. 2180 whenever an employee’s negligence causes damage or injury
to another there arises a presumption juris tantum that the employer failed to
exercise due diligence of a good father of a family in the selection and
supervision of its employees.
• Petitioner failed to present evidence that showed it formulated
guidelines/rules for the proper performance of functions of employees and
any monitoring system.
• Not necessary to state petitioner is negligent in selecting or supervising
employees as negligence is presumed by operation of law. Allegations of
negligence of the employee and existence of employer-employee relationship
in complaint are enough to make out a case of quasi-delict under 2180.
JAVIN OMPOC
Page 196 of 528

180 Cerezo vs. Tuazon| Carpio • Contrary to Mrs. Cerezo’s assertion, Foronda is not an indispensable party to the
G.R. No. 141538, March 23, 2004 | 426 SCRA 167 case. An indispensable party is one whose interest is affected by the court’s action
in the litigation, and without whom no final resolution of the case is possible.
FACTS • The responsibility of two or more persons who are liable for a quasi-delict is
• A Country Bus Lines passenger bus collided with a tricycle. solidary. Where there is a solidary obligation on the part of debtors, each debtor is
• Tricycle driver Tuazon filed a complaint for Damages against Foronda, the bus liable for the entire obligation. Therefore, jurisdiction over Foronda is not even
driver, Mrs. Cerezo, the owner of the bus line, and Atty. Cerezo her husband. necessary as Tuazon may collect damages from Mrs. Cerezo alone.
• Summons was never served against Foronda, and thus, the Court never acquired
jurisdiction over him.
• Tuazon failed to show that the business benefitted the family pursuant to Art.
121(3) of the Family Code, hence Atty. Cerezo was not held liable and Mrs. Cerezo
was held to be the only one liable.
• Instead of an appeal, Mrs. Cerezo filed an action for relief of judgment. When such
was denied, the Cerezo spouses filed certiorari before the CA. And subsequently,
certiorari before the SC.
• One of Mrs. Cerezo’s contentions is that the court did not acquire jurisdiction over
Foronda whose negligence was the main issue and that he was an indispensible party
whose presence was compulsory.
ISSUES & ARGUMENTS

• W/N Mrs. Cerezo may be held to be solely liable as the employer with the
negligent employee impleaded in the case.
Yes, Mrs. Cerezo’s liability is not only solidary but also primary and direct, as an
employer
• The same negligent act may produce civil liability arising from a delict under Article
103 of the Revised Penal Code, or may give rise to an action for a quasi-delict under
Article 2180 of the Civil Code. An aggrieved party may choose between the two
remedies. An action based on a quasi-delict may proceed independently from the
criminal action.
• Tuazon chose to file an action based on quasi-delict. In his complaint, Tuazon
alleged that Mrs. Cerezo, “without exercising due care and diligence in the
supervision and management of her employees and buses,” hired Foronda as her
driver. Tuazon became disabled because of Foronda’s “recklessness, gross
negligence and imprudence,” aggravated by Mrs. Cerezo’s “lack of due care and
diligence in the selection and supervision of her employees, particularly Foronda.”
• Art. 2180 states that Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their assigned tasks,
even though the former are not engaged in any business or industry.
• An employer’s liability based on a quasi-delict is primary and direct, while the
employer’s liability based on a delict is merely subsidiary. MARICE PACHECO
Page 197 of 528

181 Yambao vs. Zuniga | the record likewise shows that she did admit that Venturina submitted the said
G.R. No. 146173. December 11, 2003| requirements only on May 6, 1992, or on the very day of the fatal accident itself. In other
words, petitioner’s own admissions clearly and categorically show that she did not
FACTS exercise due diligence in the selection of her bus driver.
• Cecilia Yambao is the registered owner of “Lady Cecil and Rome Trans” passenger Case law teaches that for an employer to have exercised the diligence of a good
bus with Plate No. CVK 606, with a public transport franchise to ply the father of a family, he should not be satisfied with the applicant’s mere possession of a
Novaliches-via Quirino-Alabang route. professional driver’s license; he must also carefully examine the applicant for
• The bus owned by Yambao was being driven by her driver, one Ceferino G. employment as to his qualifications, his experience and record of service. Petitioner
Venturina along the northbound lane of Epifanio delos Santos Avenue (EDSA), failed to present convincing proof that she went to this extent of verifying Venturina’s
within the vicinity of Bagong Barrio, Kalookan City. With Venturina was the bus qualifications, safety record, and driving history. The presumption juris tantum that
conductor, Fernando Dumaliang. Suddenly, the bus bumped Herminigildo Zuñiga, there was negligence in the selection of her bus driver, thus, remains unrebutted.
a pedestrian. Such was the force of the impact that the left side of the front Nor did petitioner show that she exercised due supervision over Venturina after his
windshield of the bus was cracked. Zuñiga was rushed to the Quezon City General selection. For as pointed out by the Court of Appeals, petitioner did not present any
Hospital where he was given medical attention, but due to the massive injuries proof that she drafted and implemented training programs and guidelines on road safety
sustained, he succumbed shortly thereafter. for her employees. In fact, the record is bare of any showing that petitioner required
• Private respondents, as heirs of the victim, filed a Complaint against petitioner and Venturina to attend periodic seminars on road safety and traffic efficiency. Hence,
her driver, Venturina, for damages.The complaint essentially alleged that Venturina petitioner cannot claim exemption from any liability arising from the recklessness or
drove the bus in a reckless, careless and imprudent manner, in violation of traffic negligence of Venturina.
rules and regulations, without due regard to public safety, thus resulting in the In sum, petitioner’s liability to private respondents for the negligent and imprudent
victim’s premature death. acts of her driver, Venturina, under Article 2180 of the Civil Code is both manifest and
• The petitioner vehemently denied the material allegations of the complaint. She clear. Petitioner, having failed to rebut the legal presu
tried to shift the blame for the accident upon the victim, theorizing that mption of negligence in the selection and supervision of her driver, is responsible
Herminigildo bumped into her bus, while avoiding an unidentified woman who was for damages, the basis of the liability being the relationship of pater familias or on the
chasing him. She further alleged that she was not liable for any damages because as employer’s own negligence. Thus, this Court has no option but to uphold the ruling of
an employer, she exercised the proper diligence of a good father of a family, both in the appellate court.
the selection and supervision of her bus driver.
ISSUES & ARGUMENTS

• W/N Cecilia Yambao exercised the proper diligence of a good father of a
family both in the selection and supervision of her bus driver
Cecilia did not exercise the proper diligence of a good father of a family both in
the selection and supervision of her bus driver
Petitioner’s claim that she exercised due diligence in the selection and supervision
of her driver, Venturina, deserves but scant consideration. Her allegation that before she
hired Venturina she required him to submit his driver’s license and clearances is
worthless, in view of her failure to offer in evidence certified true copies of said license
and clearances. Bare allegations, unsubstantiated by evidence, are not equivalent to
proof under the rules of evidence. Moreover, as the court a quo aptly observed,
petitioner contradicts herself. She declared that Venturina applied with her sometime in
January 1992 and she then required him to submit his license and clearances. However, VP PADILLA
Page 198 of 528

182 Spouses Hernandez v Dolor | Ynares-Santiago.
G.R. No. 160286, June 30, 2004 |
FACTS
• December 19, 1986 Lorenzo Dolor Jr. was driving an owner type jeep heading to
Anilao, he collided with a passenger jeep driven by petitioner Juan Gonzales. Dolor
and a passenger died, with several injured
• Respondents filed a complaint against Gonzales being negligent and that petitioners
were negligent in selecting and supervising their employees.
• TC found that Gonzales only received his license 3 months prior to accident, before
that he had a student permit. Gonzales was driving at a fast pace and that the owner
type jeep was moving at a moderate speed. TC rendered decision holding petitioners
liable. CA affirmed and modified ruling
ISSUES & ARGUMENTS

• W/N CA was correct in finding spouses Hernandez solidarily liable with
Gonzales although they were not in the jeep when the accident occurred
Petition denied Spouses Hernandez are liable

• “Employers shall be liable for the damage caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are
not engaged in any business or industry” as per Art. 2180. Art. 2194 states
responsibility of two or more persons who are liable for quasi-delict is solidary.
• Petitioners are practicing boundary system in order to hide employer-employee
relationship.
CHRIS PALARCA
Page 199 of 528

183 Ernesto Martin vs. CA and MERALCO| Cruz
FACTS
• Ernesto was the owner of a private bearing license. Around 2 am, May 11, 1982,
while being driven by Nestor Martin, it crashed into a MERALCO electric post.
MERALCO then demanded reparation from Ernesto and upon rejection, sued
him10 for damages based on tort11, alleging that he was the employer of Nestor.
• Ernesto’s main defense was that Nestor was not his employee. RTC ruled in favor
of MERALCO which the CA affirmed.
ISSUES & ARGUMENTS

• Who bears the burden of proving employer-employee relationship between
the owner of the car and the driver at the time of the accident?
HE WHO ALLEGES MUST PROVE HIS ALLEGATION! MERALCO had the

burden of proof, or the duty to present evidence on the fact in issue necessary to
establish his claim as required by Rule 131, Sec 1 of the Revised Rules of Court.
• Whether or not engaged in any business or industry, the employer under Article
2180 is liable for torts provided the following are shown: (1) employment
relationship and (2) employee was acting within the scope of his assigned task when
the tort complained of was committed.
• No evidence whatsoever was adduced by MERALCO to show the employment
relationship. Trial court merely presumed its existence. It even shifted the burden to
Ernesto by saying that “he did not present any proof to substantiate his allegation.”
• Although the law recognizes presumption juris (law) or presumption hominis (fact), both are
not applicable in the case at bar. There is no law directing the deduction made by
the courts below from the particular facts presented to them by the parties. Neither
is there a sufficient base from the facts proved, or not denied for the inference that
the petitioner is the employer of Nestor.
• The case of Amor v. Soberano was missaplied because the vehicle involved in that
case was a 6x6 truck, which reasonably raised the factual presumption that it was
engaged in business and that its driver was employed by the owner of the vehicle.
10
Nestor was not impleaded!
11
Art 2180, Civil Code: Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, and even though the former are not DANI BOLONG
engaged in any business or industry.
Page 200 of 528
184 Filamer Christian Institute vs. CA and Kapunan| Fernan from 4-6am with sufficient time to prepare for his 7:30 am classes. He was not
G.R. No. 75112, October 16, 1990 |190 SCRA 485 included in the company payroll.
• Even if we were to concede the status of an employee on Funtecha, it has been
FACTS satisfactorily shown that at the time of the accident, he was not acting within the
• Potenciano Kapunan, Sr., an eighty-two-year old retired schoolteacher (now scope of his supposed employment. Taking the wheels of the Pinoy jeep was not
deceased), was struck by the Pinoy jeep owned by petitioner Filamer and driven by within the ambit of the janitorial services for which he was employed.
its alleged employee, Funtecha as Kapunan, Sr. was walking along Roxas Avenue,
Roxas City at 6:30 in the evening of October 20, 1977. As a result of the accident,
Kapunan was hospitalized for a total of twenty days.
• Evidence showed that at the time of the accident, the jeep had only one headlight
functioning and that Funtecha only had a student driver’s permit, having persuaded
Allan Masa, the authorized driver, to turn over the wheels to him.
• Kapunan instituted a criminal case against Funtecha alone for serious physical
injuries through reckless imprudence. He then commenced a civil case for damages
naming as defendants Filamer and Funtecha. Also included was Agustin Masa,
director and president of Filamer Christian Institute. Allan Masa was not impleaded
as co-defendant.
• The trial court rendered judgment finding not only Filamer and Funtecha to be at
fault but also Allan Masa, a non-party. On appeal, the Appellate Court affirmed the
trial court’s decision in toto
ISSUES & ARGUMENTS
W/N FILAMER IS LIABLE AS FUNTECHA’S EMPLOYER?

Petitioner: It cannot be held responsible for the 201ortuous act of Funtecha on the
ground that there is no existing employer-employee relationship between them.
NO, FILAMER IS NOT LIABLE
• Art. 2180 provides that “xxx Employers shall be liable for the damages caused by
their employees and household helpers acting within the scope of their assigned
tasks, even though the former are not engaged in any business or industry.”
• In disclaiming responsibility, Filamer has invoked Section 14, Rule X of Book III of
the Labor Code which reads:
o Sec. 14 Working scholars. – There is no employer-employee relationship
between students on the one hand, and schools…on the other, where
students work for the latter in exchange for the privilege to study free of
charge…”
• Under the just-quoted provision of law, Filamer cannot be considered as Funtecha’s
employer. Funtecha belongs to that special category of students who render service
to the school in exchange for free tuition. Funtecha worked for petitioner for two
hours daily for five days a week. He was assigned to clean the school passageways BON ARCILLA
Page 201 of 528

185 Filamer Christian Institute vs. IAC| Gutierrez
G.R. No. 75112, August 17, 1992 | Yes, Filamer is liable
FACTS • There is evidence to show that there exists in the present case an extra-contractual
• Funtecha was a working student, being a part-time janitor and a scholar of petitioner obligation arising from the negligence or reckless imprudence of a person "whose
Filamer. He was, in relation to the school, an employee even if he was assigned to acts or omissions are imputable, by a legal fiction, to other(s) who are in a position
clean the school premises for only two (2) hours in the morning of each school day. to exercise an absolute or limited control over (him)."
• Having a student driver's license, Funtecha requested the driver, Allan Masa, and • Funtecha is an employee of petitioner Filamer. He need not have an official
was allowed, to take over the vehicle while the latter was on his way home one late appointment for a driver's position in order that the petitioner may be held
afternoon. responsible for his grossly negligent act, it being sufficient that the act of driving at
• The place where Allan lives is also the house of his father, the school president, the time of the incident was for the benefit of the petitioner. Hence, the fact that
Agustin Masa. Moreover, it is also the house where Funtecha was allowed free board Funtecha was not the school driver or was not acting within the scope of his
while he was a student of Filamer Christian Institute. janitorial duties does not relieve the petitioner of the burden of rebutting the
• Allan Masa turned over the vehicle to Funtecha only after driving down a road, presumption juris tantum that there was negligence on its part either in the selection
negotiating a sharp dangerous curb, and viewing that the road was clear. of a servant or employee, or in the supervision over him. The petitioner has failed to
• According to Allan's testimony, a fast moving truck with glaring lights nearly hit show proof of its having exercised the required diligence of a good father of a family
them so that they had to swerve to the right to avoid a collision. Upon swerving, over its employees Funtecha and Allan.
they heard a sound as if something had bumped against the vehicle, but they did not • An employer is expected to impose upon its employees the necessary discipline
stop to check. Actually, the Pinoy jeep swerved towards the pedestrian, Potenciano called for in the performance of any act indispensable to the business and beneficial
Kapunan who was walking in his lane in the direction against vehicular traffic, and to their employer. In the present case, the petitioner has not shown that it has set
hit him. forth such rules and guidelines as would prohibit any one of its employees from
• Allan affirmed that Funtecha followed his advise to swerve to the right. At the time taking control over its vehicles if one is not the official driver or prohibiting the
of the incident (6:30 P.M.) in Roxas City, the jeep had only one functioning driver and son of the Filamer president from authorizing another employee to drive
headlight. the school vehicle. Furthermore, the petitioner has failed to prove that it had
• Driving the vehicle to and from the house of the school president where both Allan imposed sanctions or warned its employees against the use of its vehicles by persons
and Funtecha reside is an act in furtherance of the interest of the petitioner-school. other than the driver.
Allan's job demands that he drive home the school jeep so he can use it to fetch • The actual driver of the school jeep, Allan Masa, was not made a party defendant in
students in the morning of the next school day. the civil case for damages. As far as the injured pedestrian, plaintiff Potenciano
• In learning how to drive while taking the vehicle home in the direction of Allan's Kapunan, was concerned, it was Funtecha who was the one driving the vehicle and
house, Funtecha definitely was not having a joy ride. Funtecha was not driving for presumably was one authorized by the school to drive. For the purpose of
the purpose of his enjoyment or for a "frolic of his own" but ultimately, for the recovering damages under the prevailing circumstances, it is enough that the
service for which the jeep was intended by the petitioner school. plaintiff and the private respondent heirs were able to establish the existence of
• Therefore, the Court is constrained to conclude that the act of Funtecha in taking employer-employee relationship between Funtecha and petitioner Filamer and the
over the steering wheel was one done for and in behalf of his employer for which fact that Funtecha was engaged in an act not for an independent purpose of his own
act the petitioner-school cannot deny any responsibility by arguing that it was done but in furtherance of the business of his employer. A position of responsibility on
beyond the scope of his janitorial duties. The clause "within the scope of their the part of the petitioner has thus been satisfactorily demonstrated.
assigned tasks" for purposes of raising the presumption of liability of an employer,
includes any act done by an employee, in furtherance of the interests of the
employer or for the account of the employer at the time of the infliction of the
injury or damage.
ISSUES & ARGUMENTS

• W/N Filamer is liable as Funtecha’s employer.
HOLDING & RATIO DECIDENDI SATURDAY ALCISO
Page 202 of 528

186 Metro Manila Transit Corp v CA | Regalado, J. HOLDING & RATIO DECIDENDI
G.R. No. 104408 June 21, 1993 | 223 SCRA 521
NO. Respondent court was definitely correct in ruling that ". . . due diligence in
FACTS the selection and supervision of employee (is) not proved by mere testimonies to
• At about 6am of August 28, 1979, Nenita Custodio boarded as a paying passenger a the effect that its applicant has complied with all the company requirements
public utility jeepney with plate No. D7 305 PUJ Pilipinas 1979, then driven by before one is admitted as an employee but without proof thereof."
defendant Agudo Calebag and owned by his co-defendant Victorino Lamayo, bound • A thorough and scrupulous review of the records of this case reveals that the
for her work at Dynetics Incorporated located in Bicutan, Taguig, Metro Manila, conclusion of respondent Court of Appeals is more firmly grounded on
where she then worked as a machine operator earning P16.25 a day. While the jurisprudence and amply supported by the evidence of record than that of the court
passenger jeepney was travelling at a fast clip along DBP Avenue, Bicutan, Taguig, below. It is procedurally required for each party in a case to prove his own
Metro Manila another fast moving vehicle, a Metro Manila Transit Corp. (MMTC, affirmative assertion by the degree of evidence required by law. In civil cases, the
for short) bus bearing plate no. 3Z 307 PUB (Philippines) "79 driven by defendant degree of evidence required of a party in order to support his claim is
Godofredo C. Leonardo was negotiating Honeydew Road, Bicutan, Taguig, Metro preponderance of evidence, or that evidence adduced by one party which is more
Manila bound for its terminal at Bicutan. As both vehicles approached the conclusive and credible than that of the other party. It is, therefore, incumbent on
intersection of DBP Avenue and Honeydew Road they failed to slow down and the plaintiff who is claiming a right to prove his case. Corollarily, defendant must
slacken their speed; neither did they blow their horns to warn approaching vehicles. likewise prove own allegation to buttress its claim that it is not liable.
As a consequence, a collision between them occurred, the passenger jeepney • Coming now to the case at bar, while there is no rule which requires that testimonial
ramming the left side portion of the MMTC bus. The collision impact caused evidence, to hold sway, must be corroborated by documentary evidence, or even
plaintiff-appellant Nenita Custodio to hit the front windshield of the passenger subject evidence for that matter, inasmuch as the witnesses' testimonies dwelt
jeepney and (he was thrown out therefrom, falling onto the pavement unconscious on mere generalities, we cannot consider the same as sufficiently persuasive
with serious physical injuries. She was brought to the Medical City Hospital where proof that there was observance of due diligence in the selection and
she regained consciousness only after one (1) week. Thereat, she was confined for supervision of employees. Petitioner's attempt to prove its diligentissimi patris
twenty-four (24) days, and as a consequence, she was unable to work for three and familias in the selection and supervision of employees through oral evidence must fail
one half months (31/2). as it was unable to buttress the same with any other evidence, object or
• Assisted by her parents (for she was then a minor), Custodio filed a complaint for documentary, which might obviate the apparent biased nature of the testimony.
damages against the drivers and owners of the two vehicles. The said defendants • Whether or not the diligence of a good father of a family has been observed
were passing the blame to one another. MMTC established its defense of having by petitioner is a matter of proof which under the circumstances in the case
exercised due diligence in the selection and supervision of its employees through the at bar has not been clearly established. It is not felt by the Court that there is
testimonies of its training officer, Milagros Garbo, and transport supervisor, enough evidence on record as would overturn the presumption of negligence,
Christian Baustista. and for failure to submit all evidence within its control, assuming the putative
• The lower court ruled in favor of Custodio and held all of the defendants solidarily existence thereof, petitioner MMTC must suffer the consequences of its own
liable (with Calebag being declared in default) with the exception of MMTC on the inaction and indifference.
ground that it was not only careful and diligent in choosing and screening applicants • Petitioner attempted to essay in detail the company's procedure for screening job
for job openings but was also strict and diligent in supervising its employees. With applicants and supervising its employees in the field, through the testimonies of
Custodio’s MR denied, they appealed to the CA, which modified the decision and Milagros Garbo, as its training officer, and Christian Bautista, as its transport
held MMTC solidarily liable with the other defendants. MR denied. supervisor, both of whom naturally and expectedly testified for MMTC. It then
concluded with its sweeping pontifications that "thus, there is no doubt that
considering the nature of the business of petitioner, it would not let any applicant-
drivers to be (sic) admitted without undergoing the rigid selection and training
process with the end (in) view of protecting the public in general and its passengers
ISSUES & ARGUMENTS in particular; . . . thus, there is no doubt that applicant had fully complied with the
• Was MMTC able to establish its due diligence in the selection and said requirements otherwise Garbo should not have allowed him to undertake the
supervision of its employees? next set of requirements . . . and the training conducted consisting of seminars and
actual driving tests were satisfactory otherwise he should have not been allowed to
drive the subject vehicle.” These statements strike us as both presumptuous and in
Page 203 of 528
the nature of petitio principii, couched in generalities and shorn of any supporting basis of the liability being the relationship of pater familias or on the employer's own
evidence to boost their verity. As earlier observed, respondent court could not but negligence.
express surprise, and thereby its incredulity, that witness Garbo neither testified nor • It should be borne in mind that the legal obligation of employers to observe due
presented any evidence that driver Leonardo had complied with or had undergone diligence in the selection and supervision of employees is not to be considered as an
all the clearances and trainings she took pains to recite and enumerate. The empty play of words or a mere formalism, as appears to be the fashion of the times,
supposed clearances, results of seminars and tests which Leonardo allegedly since the non-observance thereof actually becomes the basis of their vicarious
submitted and complied with were never presented in court despite the fact that, if liability under Article 2180.
true, then they were obviously in the possession and control of petitioner. • On the matter of selection of employees, Campo vs. Camarote, supra, lays
Discussion on the vicarious liability of employer down this admonition:
• The basis of the employer's vicarious liability has been explained under this . . . . In order that the owner of a vehicle may be considered as having
ratiocination: exercised all diligence of a good father of a family, he should not have
The responsibility imposed by this article arises by virtue of a presumption juris been satisfied with the mere possession of a professional driver's license;
tantum of negligence on the part of the persons made responsible under the he should have carefully examined the applicant for employment as to
article, derived from their failure to exercise due care and vigilance over the acts his qualifications, his experience and record of service. These steps
of subordinates to prevent them from causing damage. Negligence is imputed appellant failed to observe; he has therefore, failed to exercise all due
to them by law, unless they prove the contrary. Thus, the last paragraph of the diligence required of a good father of a family in the choice or selection
article says that such responsibility ceases if is proved that the persons who of driver.
might be held responsible under it exercised the diligence of a good father of a • Due diligence in the supervision of employees, on the other hand, includes
family (diligentissimi patris familias) to prevent damage. It is clear, therefore, that it the formulation of suitable rules and regulations for the guidance of
is not representation, nor interest, nor even the necessity of having somebody employees and the issuance of proper instructions intended for the protection
else answer for the damages caused by the persons devoid of personality, but it of the public and persons with whom the employer has relations through his
is the non-performance of certain duties of precaution and prudence imposed or its employees and the imposition of necessary disciplinary measures upon
upon the persons who become responsible by civil bond uniting the actor to employees in case of breach or as may be warranted to ensure the
them, which forms the foundation of such responsibility. performance of acts indispensable to the business of and beneficial to their
• The above rule is, of course, applicable only where there is an employer- employer. To this, we add that actual implementation and monitoring of
employee relationship, although it is not necessary that the employer be engaged consistent compliance with said rules should be the constant concern of the
in business or industry. Whether or not engaged in any business or industry, the employer, acting through dependable supervisors who should regularly
employer under Article 2180 is liable for torts committed by his employees within report on their supervisory functions.
the scope of their assigned tasks. But, it is necessary first to establish the • In order that the defense of due diligence in the selection and supervision of
employment relationship. Once this is done, the plaintiff must show, to hold employees may be deemed sufficient and plausible, it is not enough to emptily
the employer liable, that the employee was acting within the scope of his invoke the existence of said company guidelines and policies on hiring and
assigned task when the tort complained of was committed. It is only then supervision. As the negligence of the employee gives rise to the presumption of
that the defendant, as employer, may find it necessary to interpose the negligence on the part of the employer, the latter has the burden of proving that it
defense of due diligence in the selection and supervision of employees. The has been diligent not only in the selection of employees but also in the actual
diligence of a good father of a family required to be observed by employers to supervision of their work. The mere allegation of the existence of hiring procedures
prevent damages under Article 2180 refers to due diligence in the selection and and supervisory policies, without anything more, is decidedly not sufficient to
supervision of employees in order to protect the public. overcome presumption.
• With the allegation and subsequent proof of negligence against the defendant driver CA decision is hereby affirmed.
and of an employer-employee relation between him and his co-defendant MMTC in
this instance, the case in undoubtedly based on a quasi-delict under Article 2180.
When the employee causes damage due to his own negligence while performing his
own duties, there arises the juris tantum presumption that the employer is negligent,
rebuttable only by proof of observance of the diligence of a good father of a family.
For failure to rebut such legal presumption of negligence in the selection and
supervision of employees, the employer is likewise responsible for damages, the TEL VIRTUDEZ
Page 204 of 528

187 Valenzuela vs. CA| Kapunan HOLDING & RATIO DECIDENDI
G.R. No. 115024, February 7, 1996 | 362 SCRA 56
Sustain Plaintiff
FACTS • The version presented by defendant could not be sustained as witnesses in the area
• At around 2:00 in the morning of June 24, 1990, plaintiff Ma. Lourdes Valenzuela testified that he was driving very fast and zigzagging. Also the facts as he narrated
was driving a blue Mitsubishi lancer with Plate No. FFU 542 along Aurora Blvd. are highly unprobable seeing as the street was actually well lighted. Had he been
with a companion, Cecilia Ramon, heading towards the direction of Manila. Before traveling at a slow speed, he would have been able to stop in time so as not to hit
reaching A. Lake Street, she noticed she had a flat tire and stopped at a lighted place the plaintiff even if the road was wet. The only reason why he would not have been
to solicit help if needed. She parked along the sidewalk, about 1½ feet away, put on able to do so would be if he was intoxicated which slows down reactions.
her emergency lights, alighted from the car, and went to the rear to open the trunk.
She was standing at the left side of the rear of her car when she was suddenly No
bumped by a 1987 Mitsubishi Lancer driven by defendant Richard Li and registered • Li contends that Valenzuela should not have parked on the side of the road and
in the name of defendant Alexander Commercial, Inc. Because of the impact looked for a parking space.
plaintiff was thrown against the windshield of the car of the defendant and then fell • The court rationalized using the emergency rule which states “An individual who
to the ground. She was pulled out from under defendant’s car. She was brought to suddenly finds himself in a situation of danger and is required to act without much
the UERM Medical Memorial Center where she was found to have a “traumatic time to consider the best means that may be adopted to avoid the impending
amputation, leg, left up to distal thigh (above knee).” She was confined in the danger, is not guilty of negligence if he fails to undertake what subsequently and
hospital for twenty (20) days and was eventually fitted with an artificial leg. The upon reflection may appear to be a better solution, unless the emergency was
expenses for the hospital confinement (P 120,000.00) and the cost of the artificial brought by his own negligence.” Valenzuela could not have been expected to go to a
leg (P27,000.00) were paid by defendants from the car insurance. side street where the chances of finding help would have been lower.
• Defendant Richard Li denied that he was negligent. He said he was travelling at 55
kph; considering that it was raining, visibility was affected and the road was wet. No
Traffic was light. He testified that he was driving along the inner portion of the right • Although the Li was an employee of American, no proof was adduced as Li claimed,
lane of Aurora Blvd. towards the direction of Araneta Avenue, when he was that he was out late that night on a social call in the exercise of his functions as
suddenly confronted, in the vicinity of A. Lake Street, San Juan, with a car coming assistant manager.
from the opposite direction, travelling at 80 kph, with “full bright lights.”
Temporarily blinded, he swerved to the right to avoid colliding with the oncoming
vehicle, and bumped plaintiff’s car, which he did not see because it was midnight
blue in color, with no parking lights or early warning device, and the area was poorly
lighted. He alleged in his defense that the left rear portion of plaintiff’s car was
protruding as it was then “at a standstill diagonally” on the outer portion of the right
lane towards Araneta Avenue (par. 18, Answer). He confirmed the testimony of
plaintiff’s witness that after being bumped the car of the plaintiff swerved to the
right and hit another car parked on the sidewalk. Defendants counterclaimed for
damages, alleging that plaintiff was reckless or negligent, as she was not a licensed
driver.
ISSUES & ARGUMENTS

• W/N the court should sustain the version of plaintiff or defendant
• W/N there was contributory negligence on the part of Valenzuela
• W/N Alexander Commercial Inc. can be held solidarily liable with Li
JAN PORTER
Page 205 of 528
188 Filipinas Broadcasting Network Inc. vs. AMEC-BCCM | exposé. The trial court found Rima’s statement within the “bounds of freedom of
GR 141994, 17 January 2005| speech, expression, and of the press.”
• Both parties, namely, FBNI, Rima and Alegre, on one hand, and AMEC and Ago,
FACTS on the other, appealed the decision to the Court of Appeals. The Court of Appeals
• “Exposé” is a radio documentary program hosted by Carmelo ‘Mel’ Rima (“Rima”) affirmed the trial court’s judgment with modification. The appellate court made
and Hermogenes ‘Jun’ Alegre (“Alegre”). Exposé is aired every morning over Rima solidarily liable with FBNI and Alegre. The appellate court denied Ago’s claim
DZRC-AM which is owned by Filipinas Broadcasting Network, Inc. (“FBNI”). for damages and attorney’s fees because the broadcasts were directed against
“Exposé” is heard over Legazpi City, the Albay municipalities and other Bicol areas. AMEC, and not against her. FBNI, Rima and Alegre filed a motion for
• In the morning of 14 and 15 December 1989, Rima and Alegre exposed various reconsideration which the Court of Appeals denied in its 26 January 2000
alleged complaints from students, teachers and parents against Ago Medical and Resolution. Hence, FBNI filed the petition for review.
Educational Center-Bicol Christian College of Medicine (“AMEC”) and its
administrators. Claiming that the broadcasts were defamatory, AMEC and Angelita ISSUES & ARGUMENTS
Ago (“Ago”), as Dean of AMEC’s College of Medicine, filed a complaint for • Whether FBNI is solidarily liable with Rima and Alegre
damages against FBNI, Rima and Alegre on 27 February 1990. The complaint
further alleged that AMEC is a reputable learning institution. HOLDING & RATIO DECIDENDI
• With the supposed exposés, FBNI, Rima and Alegre “transmitted malicious
imputations, and as such, destroyed plaintiffs’ (AMEC and Ago) reputation.” YES, UNDER ART 2219 of NCC
AMEC and Ago included FBNI as defendant for allegedly failing to exercise due • As operator of DZRC-AM and employer of Rima and Alegre, FBNI is solidarily
diligence in the selection and supervision of its employees, particularly Rima and liable to pay for damages arising from the libelous broadcasts. As stated by the CA,
Alegre. "recovery for defamatory statements published by radio or television may be had
• On 18 June 1990, FBNI, Rima and Alegre, through Atty. Rozil Lozares, filed an from the owner of the station, a licensee, the operator of the station, or a person
Answer alleging that the broadcasts against AMEC were fair and true. FBNI, Rima who procures, or participates in, the making of the defamatory statements.” An
and Alegre claimed that they were plainly impelled by a sense of public duty to employer and employee are solidarily liable for a defamatory statement by the
report the “goings-on in AMEC, [which is] an institution imbued with public employee within the course and scope of his or her employment, at least when the
interest.” Thereafter, trial ensued. employer authorizes or ratifies the defamation. In this case, Rima and Alegre were
• During the presentation of the evidence for the defense, Atty. Edmundo Cea, clearly performing their official duties as hosts of FBNI’s radio program Exposé
collaborating counsel of Atty. Lozares, filed a Motion to Dismiss on FBNI’s behalf. when they aired the broadcasts. FBNI neither alleged nor proved that Rima and
The trial court denied the motion to dismiss. Consequently, FBNI filed a separate Alegre went beyond the scope of their work at that time. There was likewise no
Answer claiming that it exercised due diligence in the selection and supervision of showing that FBNI did not authorize and ratify the defamatory broadcasts.
Rima and Alegre. FBNI claimed that before hiring a broadcaster, the broadcaster • Moreover, there is insufficient evidence on record that FBNI exercised due diligence
should (1) file an application; (2) be interviewed; and (3) undergo an apprenticeship in the selection and supervision of its employees, particularly Rima and Alegre.
and training program after passing the interview. FBNI merely showed that it exercised diligence in the selection of its broadcasters
• FBNI likewise claimed that it always reminds its broadcasters to “observe truth, without introducing any evidence to prove that it observed the same diligence in the
fairness and objectivity in their broadcasts and to refrain from using libelous and supervision of Rima and Alegre. FBNI did not show how it exercised diligence in
indecent language.” Moreover, FBNI requires all broadcasters to pass the Kapisanan supervising its broadcasters. FBNI’s alleged constant reminder to its broadcasters to
ng mga Brodkaster sa Pilipinas (“KBP”) accreditation test and to secure a KBP "observe truth, fairness and objectivity and to refrain from using libelous and
permit. indecent language" is not enough to prove due diligence in the supervision of its
• On 14 December 1992, the trial court rendered a Decision finding FBNI and Alegre broadcasters. Adequate training of the broadcasters on the industry’s code of
liable for libel except Rima. The trial court held that the broadcasts are libelous per conduct, sufficient information on libel laws, and continuous evaluation of the
se. The trial court rejected the broadcasters’ claim that their utterances were the broadcasters’ performance are but a few of the many ways of showing diligence in
result of straight reporting because it had no factual basis. The broadcasters did not the supervision of broadcasters.
even verify their reports before airing them to show good faith. In holding FBNI • FBNI claims that it "has taken all the precaution in the selection of Rima and
liable for libel, the trial court found that FBNI failed to exercise diligence in the Alegre as broadcasters, bearing in mind their qualifications." However, no clear and
selection and supervision of its employees. In absolving Rima from the charge, the convincing evidence shows that Rima and Alegre underwent FBNI’s "regimented
trial court ruled that Rima’s only participation was when he agreed with Alegre’s process" of application. Furthermore, FBNI admits that Rima and Alegre had
Page 206 of 528
deficiencies in their KBP accreditation, which is one of FBNI’s requirements before
it hires a broadcaster. Significantly, membership in the KBP, while voluntary,
indicates the broadcaster’s strong commitment to observe the broadcast industry’s
rules and regulations.
• Clearly, these circumstances show FBNI’s lack of diligence in selecting and
supervising Rima and Alegre. Hence, FBNI is solidarily liable to pay damages
together with Rima and Alegre.
FRANK TAMARGO
Page 207 of 528

189 Estacion v. Bernardo | Austria-Martinez Petitioner failed to show that he examined driver Gerosano as to his qualifications,
G.R. No. 144723, Feb. 27, 2006| experience and service records. In fact, the testimony of driver Gerosano in his cross-
examination showed the non-observance of these requirements. Gerosano testified that
FACTS petitioner was his first employer in Dumaguete and that he was accepted by petitioner on
In the afternoon of October 16, 1982, respondent Noe was going home to Dumaguete the very day he applied for the job;29 that his driver’s license was issued in Mindanao
from Cebu, via Bato and Tampi. At Tampi, he boarded a Ford Fiera passenger jeepney where he came from30 and that while petitioner asked him about his driving record in
with plate no. NLD 720 driven by respondent Geminiano Quinquillera (Quinquillera), Mindanao, he did not present any document of his driving record.31 Such admission
owned by respondent Cecilia Bandoquillo (Bandoquillo), and was seated on the clearly established that petitioner did not exercise due diligence in the selection of his
extension seat placed at the center of the Fiera. From San Jose, an old woman wanted to driver Gerosano.
ride, so respondent Noe offered his seat. Since the Fiera was already full, respondent Moreover, the fact that petitioner’s driver Gerosano was driving in an efficient manner
Noe hung or stood on the left rear carrier of the vehicle. Somewhere along Barangay Sto. when petitioner was with him in his first two trips would not conclusively establish that
Niño, San Jose, Negros Oriental, between kilometers 13 and 14, the Fiera began to slow Gerosano was not at all reckless. It could not be considered as due diligence in the
down and then stopped by the right shoulder of the road to pick up passengers. supervision of his driver to exempt petitioner from liability. In the supervision of his
Suddenly, an Isuzu cargo truck, owned by petitioner and driven by Gerosano, which was driver, petitioner must show that he had formulated training programs and guidelines on
traveling in the same direction, hit the rear end portion of the Fiera where respondent road safety for his driver which the records failed to show. We find that petitioner failed
Noe was standing. Due to the tremendous force, the cargo truck smashed respondent to rebut the presumption of negligence in the selection and supervision of his employees.
Noe against the Fiera crushing his legs and feet which made him fall to the ground. A Moreover, there was also no proof that he exercised diligence in maintaining his cargo
passing vehicle brought him to the Silliman University Medical Center where his lower truck roadworthy and in good operating condition. While petitioner’s mechanic driver
left leg was amputated. testified that he made a routine check up on October 15, 1982, one day before the
Police investigation reports showed that respondent Noe was one of the 11 passengers mishap happened, and found the truck operational, there was no record of such
of the Fiera who suffered injuries; that when the Fiera stopped to pick up a passenger, inspection.
the cargo truck bumped the rear left portion of the Fiera; that only one tire mark from
the front right wheel of the cargo truck was seen on the road. A sketch of the accident
was drawn by investigator Mateo Rubia showing the relative positions of the two
vehicles, their distances from the shoulder of the road and the skid marks of the right
front wheel of the truck measuring about 48 feet.
Respondent Noe, through his guardian ad litem Arlie Bernardo, filed with the RTC of
Dumaguete City a complaint for damages arising from quasi delict against petitioner as the
registered owner of the cargo truck and his driver Gerosano.
ISSUES & ARGUMENTS
WHETHER THE COURT OF APPEALS ERRED IN NOT FINDING
THAT PETITIONER LARRY ESTACION EXERCISED THE DUE DILIGENCE
OF A GOOD FATHER OF A FAMILY TO PREVENT DAMAGE
WHETHER THE COURT OF APPEALS ERRED IN NOT HOLDING
THAT PETITIONER LARRY ESTACION EXERCISED DUE DILIGENCE IN
THE SELECTION AND SUPERVISION OF HIS EMPLOYEE AND IN
MAINTAINING HIS CARGO TRUCK ROADWORTHY AND IN GOOD
OPERATING CONDITION;
As the employer of Gerosano, petitioner is primarily and solidarily liable for the quasi-
delict committed by the former. Petitioner is presumed to be negligent in the selection
and supervision of his employee by operation of law and may be relieved of
responsibility for the negligent acts of his driver, who at the time was acting within the
scope of his assigned task, only if he can show that he observed all the diligence of a
good father of a family to prevent damage. DIKKI SIAN
Page 208 of 528

190 Mercury Drug Corporation and Rolando J. Del Rosario vs. Spouses Huang, • In the end, the SC found that Mercury and Del Rosario are jointly and solidarily
and Stephen Huang | Puno liable to the Huangs.
June 22, 2007
FACTS
• Petitioner Mercury Drug is the registered owner of a Mitsubishi truck, with
petitioner del Rosario as driver. Respondents Richard and Carmen Huang are
parents of respondent Stephen Huang, who owned a Sedan.
• The two vehicles got into an accident as they were traversing a highway. The Sedan
was on the left innermost lane while the truck was on the next lane to its right, when
the latter swerved to its left and slammed in the front right side of the car. As a
consequence, the car was wrecked and Stephen Huang incurred massive injuries and
became paralyzed.
• The parents of Stephen faulted Del Rosario for committing gross negligence and
reckless imprudence, and Mercury Drug for failing to exercise the diligence of a
good father of a family in the selection and supervision of its driver.
• The RTC found the petitioners jointly and severally liable for damages. The CA
affirmed, hence this appeal.
ISSUES & ARGUMENTS

• W/N Mercury Drug is liable as employer of Del Rosario.
Mercury Drug is liable.
• Mercury Drug is jointly and solidarily liable with Del Rosario, as the employer of the
latter. In order to be relieved of such liability, Mercury should show that it exercised
the diligence of a good father of a family, both in the selection and supervision of
the employee in the performance of his duties. Mercury failed in both respects.
• In selecting employees, the employer is required to examine them as to their
qualifications, experience and service records. With respect to supervision, the
employer should formulate standard operating procedures, monitor their
implementation and impose disciplinary measures for their breach. To establish
such, concrete proof, such as documentary evidence must be submitted by him.
• In the case at bar, it was shown that Del Rosario didn't take driving tests and
psychological exams when he applied for the position of a Truck Man. In addition,
Mercury didn't present Del Rosario's NBI and police clearances. Next, the last
seminar attended by the driver occurred a long 12 years before the accident
occurred. Lastly, Mercury didn't have a backup driver for long trips. When the
accident happened Del Rosario has been out on the road for more than 13 hours.
• As to negligence with regard to supervision over its employees, Mercury didn't
impose any sanction on Del Rosario when the latter reported to the former about
the incident. Hence, Mercury didn't exercise due diligence.
J.R. RUIZ
Page 209 of 528

191 Merrit vs. Government of the Philippine Islands | 15, Partida 7, on that the person obligated, by his own fault or negligence, takes part
in the act or omission of the third party who caused the damage. It follows
therefrom that the state, by virtue of such provisions of law, is not responsible for
FACTS the damages suffered by private individuals in consequence of acts performed by its
employees in the discharge of the functions pertaining to their office, because
• When the plaintiff, riding on a motorcycle, was going toward the western part of neither fault nor even negligence can be presumed on the part of the state in the
Calle Padre Faura, passing along the west side thereof at a speed of ten to twelve organization of branches of public service and in the appointment of its agents; on
miles an hour, upon crossing Taft Avenue and when he was ten feet from the the contrary, we must presuppose all foresight humanly possible on its part in order
southwestern intersection of said streets, the General Hospital ambulance, upon that each branch of service serves the general weal an that of private persons
reaching said avenue, instead of turning toward the south, after passing the center interested in its operation. Between these latter and the state, therefore, no relations
thereof, so that it would be on the left side of said avenue, as is prescribed by the of a private nature governed by the civil law can arise except in a case where the
ordinance and the Motor Vehicle Act, turned suddenly and unexpectedly and long state acts as a judicial person capable of acquiring rights and contracting obligations.
before reaching the center of the street, into the right side of Taft Avenue, without (Supreme Court of Spain, January 7, 1898; 83 Jur. Civ., 24.)
having sounded any whistle or horn, by which movement it struck the plaintiff, who
was already six feet from the southwestern point or from the post place there. • It is, therefore, evidence that the State (the Government of the Philippine Islands) is
• By reason of the resulting collision, the plaintiff was so severely injured that, only liable, according to the above quoted decisions of the Supreme Court of Spain,
according to Dr. Saleeby, who examined him on the very same day that he was taken for the acts of its agents, officers and employees when they act as special agents
to the General Hospital, he was suffering from a depression in the left parietal within the meaning of paragraph 5 of article 1903, supra, and that the chauffeur of
region, a would in the same place and in the back part of his head, while blood the ambulance of the General Hospital was not such an agent.
issued from his nose and he was entirely unconscious.
• As a consequence of the loss the plaintiff suffered in the efficiency of his work as a
contractor, he had to dissolved the partnership he had formed with the engineer.
Wilson, because he was incapacitated from making mathematical calculations on
account of the condition of his leg and of his mental faculties, and he had to give up
a contract he had for the construction of the Uy Chaco building.
• As the negligence which caused the collision is a tort committed by an agent or
employee of the Government, the inquiry at once arises whether the Government is
legally-liable for the damages resulting therefrom.
ISSUES & ARGUMENTS

• W/N the Government is liable?
• Paragraph 5 of article 1903 of the Civil Code reads:
The state is liable in this sense when it acts through a special agent, but not when
the damage should have been caused by the official to whom properly it pertained
to do the act performed, in which case the provisions of the preceding article shall
be applicable.
• The supreme court of Spain in defining the scope of this paragraph said:
• That the obligation to indemnify for damages which a third person causes to
another by his fault or negligence is based, as is evidenced by the same Law 3, Title BYRON PEREZ
Page 210 of 528

192 Mendoza v. De Leon |Trent • It cannot be said that in rescinding the contract with the plaintiff, thereby making
G.R. L-9596 | Feb. 11, 1916 the municipality liable to an action for damages for no valid reason at all, the
defendant councilors were honestly acting for the interests of the municipality. The
FACTS defendants are liable jointly and severally for the damages sustained by the plaintiff
• Plaintiff was the grantee of an exclusive lease privilege under Act No. 1643 of the from the rescission of his contract of lease of the ferry privilege in question.
Philippine Commission. After a little over one year, plaintiff was forcibly ejected
under and pursuant to a resolution adopted by the defendants-members of the
municipal council of Villasis, Pangasinan.
• Thus, plaintiff brought action against such individual members for damages. Act
No. 1643 provides that the use of each fishery, fish-breeding ground, ferry, stable,
market, and slaughterhouse belonging to any municipality or township shall be let to
the highest bidder annually or for such longer period not exceeding five years as
may have been previously approved by the provincial board of the province in
which the municipality or township is located.
ISSUE:
• W/N the municipality is liable for acts of its officers or agents in the
performance of governmental functions.

• It depends. In this case, it is not liable.
• When the acts of its officers come within the powers which it has as agent of the
state, it is exempt from liability for its own acts and the acts of its officers; if the acts
of the officer or agent of the city are for the special benefits of the corporation in its
private or corporate interest, such officer is deemed the agent or servant of the city,
but where the act is not in relation to a private or corporate interest of the
municipality, but for the benefit of the public at large, such acts by the agents and
servants are deemed to be acts by public or state officers, and for the public benefit.
Governmental affairs do not lose their governmental character by being delegated to
the municipal governments. The state being immune for injuries suffered by private
individuals in the administration of strictly governmental functions, like immunity is
enjoyed by the municipality in the performance of the same duties, unless it is
expressly made liable by statute.
• A municipality is not exempt from liability for the negligent performance of its
corporate or proprietary or business functions. In the administration of its
patrimonial property, it is to be regarded as a private corporation or individual so far
as its liability to third persons on contract or in tort is concerned. Its contracts,
validly entered into, may be enforced and damages may be collected from it for the
torts of its officers or agents within the scope of their employment in precisely the
same manner and to the same extent as those of private corporations or individuals.
As to such matters the principles of respondeat superior applies. It is for these purposes
that the municipality is made liable to suits in the courts.
• The leasing of a municipal ferry to the highest bidder for a specified period of time is not a
governmental but a corporate function. Such a lease, when validly entered into, constitutes
AYEN QUA
a contract with the lessee which the municipality is bound to respect.
Page 211 of 528
193 Fontanilla vs. Maliaman | Paras • Paragraphs 5 and 6 of Art. 21 80 read as follows:
G.R. No. L-55963, December 1, 1989| Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks,
FACTS even the though the former are not engaged in any business or
• It appears that on August 21, 1976 at about 6:30 P.M., a pickup owned and operated industry.
by respondent National Irrigation Administration, a government agency bearing The State is responsible in like manner when it acts through a special
Plate No. IN-651, then driven officially by Hugo Garcia, an employee of said agency agent.; but not when the damage has been caused by the official to
as its regular driver, bumped a bicycle ridden by Francisco Fontanilla, son of herein whom the task done properly pertains, in which case what is provided
petitioners, and Restituto Deligo, at Maasin, San Jose City along the Maharlika in Art. 2176 shall be applicable.
Highway. As a result of the impact, Francisco Fontanilla and Restituto Deligo were • The liability of the State has two aspects. namely:
injured and brought to the San Jose City Emergency Hospital for treatment. 1. Its public or governmental aspects where it is liable for the tortious
Fontanilla was later transferred to the Cabanatuan Provincial Hospital where he acts of special agents only.
died. 2. Its private or business aspects (as when it engages in private
• Garcia was then a regular driver of respondent National Irrigation Administration enterprises) where it becomes liable as an ordinary employer. (p. 961,
who, at the time of the accident, was a licensed professional driver and who Civil Code of the Philippines; Annotated, Paras; 1986 Ed. ).
qualified for employment as such regular driver of respondent after having passed • In this jurisdiction, the State assumes a limited liability for the damage caused by the
the written and oral examinations on traffic rules and maintenance of vehicles given tortious acts or conduct of its special agent.
by National Irrigation Administration authorities. • Under the aforequoted paragrah 6 of Art. 2180, the State has voluntarily assumed
• This petition is an off-shot of the action (Civil Case No. SJC-56) instituted by liability for acts done through special agents. The State's agent, if a public official,
petitioners-spouses on April 17, 1978 against respondent NIA before the then Court must not only be specially commissioned to do a particular task but that such task
of First Instance of San Jose City, for damages in connection with the death of their must be foreign to said official's usual governmental functions. If the State's agent is
son resulting from the accident. not a public official, and is commissioned to perform non-governmental functions,
• The trial court rendered judgment which directed respondent National Irrigation then the State assumes the role of an ordinary employer and will be held liable as
Administration to pay damages (death benefits) and actual expenses to petitioners such for its agent's tort. Where the government commissions a private individual for
• Respondent National Irrigation Administration thus appealed said decision to the a special governmental task, it is acting through a special agent within the meaning
Court of Appeals of the provision. (Torts and Damages, Sangco, p. 347, 1984 Ed.)
• Instead of filing the required brief in the aforecited Court of Appeals case, • Certain functions and activities, which can be performed only by the government,
petitioners filed the instant petition with this Court. are more or less generally agreed to be "governmental" in character, and so the State
is immune from tort liability. On the other hand, a service which might as well be
provided by a private corporation, and particularly when it collects revenues from it,
ISSUES & ARGUMENTS the function is considered a "proprietary" one, as to which there may be liability for
• W/N the award of moral damages, exemplary damages and attorney's fees is the torts of agents within the scope of their employment.
legally proper in a complaint for damages based on quasi-delict which • The National Irrigation Administration is an agency of the government exercising
resulted in the death of the son of herein petitioners. proprietary functions, by express provision of Rep. Act No. 3601
• Indubitably, the NIA is a government corporation with juridical personality and not
HOLDING & RATIO DECIDENDI a mere agency of the government. Since it is a corporate body performing non-
governmental functions, it now becomes liable for the damage caused by the
Yes. accident resulting from the tortious act of its driver-employee. In this particular case,
the NIA assumes the responsibility of an ordinary employer and as such, it becomes
• Art. 2176 thus provides: answerable for damages. This assumption of liability, however, is predicated upon
Whoever by act omission causes damage to another, there being fault the existence of negligence on the part of respondent NIA. The negligence referred
or negligence, is obliged to pay for damage done. Such fault or to here is the negligence of supervision.
negligence, if there is no pre-existing cotractual relation between the • It should be emphasized that the accident happened along the Maharlika National
parties, is called a quasi-delict and is governed by the provisions of Road within the city limits of San Jose City, an urban area. Considering the fact that
this Chapter the victim was thrown 50 meters away from the point of impact, there is a strong
Page 212 of 528

indication that driver Garcia was driving at a high speed. This is confirmed by the
fact that the pick-up suffered substantial and heavy damage as above-described and
the fact that the NIA group was then "in a hurry to reach the campsite as early as
possible", as shown by their not stopping to find out what they bumped as would
have been their normal and initial reaction.
• Evidently, there was negligence in the supervision of the driver for the reason that
they were travelling at a high speed within the city limits and yet the supervisor of
the group, Ely Salonga, failed to caution and make the driver observe the proper and
allowed speed limit within the city. Under the situation, such negligence is further
aggravated by their desire to reach their destination without even checking whether
or not the vehicle suffered damage from the object it bumped, thus showing
imprudence and reckelessness on the part of both the driver and the supervisor in
the group.
• Considering the foregoing, respondent NIA is hereby directed to pay herein
petitioners-spouses the amounts of P12,000.00 for the death of Francisco
Fontanilla; P3,389.00 for hospitalization and burial expenses of the aforenamed
deceased; P30,000.00 as moral damages; P8,000.00 as exemplary damages and
attorney's fees of 20% of the total award.
DEANNE REYES
Page 213 of 528

194 Palisoc vs. Brillantes| Teehankee exercise over the pupils and students for as long as they are at attendance in the
G.R. No. L-29025, October 4, 1971| 41 SCRA 557 school, including recess time. There is nothing in the law that requires that for
such liability to attach the pupil or student who commits the tortious act
FACTS must live and board in the school, as erroneously held by the lower court, and
• Deceased Dominador Palisoc and the defendant Virgilio L. Daffon were classmates the dicta in Mercado (as well as in Exconde) on which it relied, must now be deemed
at the Manila Technical Institute, and on the afternoon of March 10, 1966, between to have been set aside by the present decision.
two and three o'clock, they, together with another classmate Desiderio Cruz were in • Defendants Valenton and Quibulue as president and teacher-in-charge of the school
the laboratory room located on the ground floor. Desiderio Cruz and Virgilio L. must therefore be held jointly and severally liable for the quasi-delict of their co-
Daffon were working on a machine while Dominador Palisoc was merely looking defendant Daffon in the latter having caused the death of his classmate, the
on at them. Daffon made a remark to the effect that Palisoc was acting like a deceased Dominador Palisoc. The unfortunate death resulting from the fight
foreman. Because of this remark Palisoc slapped slightly Daffon on the face. between the protagonists-students could have been avoided, had said
Daffon, in retaliation, gave Palisoc a strong flat blow on the face, which was defendants but complied with their duty of providing adequate supervision
followed by other fist blows on the stomach. Palisoc retreated apparently to avoid over the activities of the students in the school premises to protect their
the fist blows, but Daffon followed him and both exchanged blows until Palisoc students from harm, whether at the hands of fellow students or other parties.
stumbled on an engine block which caused him to fall face downward. Palisoc At any rate, the law holds them liable unless they relieve themselves of such liability,
became pale and fainted. First aid was administered to him but he was not revived, in compliance with the last paragraph of Article 2180, Civil Code, by "(proving) that
so he was immediately taken to a hospital. He never regained consciousness; finally they observed all the diligence of a good father of a family to prevent damage." In
he died. the light of the factual findings of the lower court's decision, said defendants failed
• Plaintiffs-appellants as parents of the deceased had filed on May 19, 1966, the action to prove such exemption from liability. .
below for damages. Defendants, per the trial court's decision, are: "Defendant
Antonio C. Brillantes, at the time when the incident which gave rise to his action
occurred was a member of the Board of Directors of the institute; the defendant
Teodosio Valenton, the president thereof; the defendant Santiago M. Quibulue,
instructor of the class to which the deceased belonged; and the defendant Virgilio L.
Daffon, a fellow student of the deceased. At the beginning the Manila Technical
Institute was a single proprietorship, but lately on August 2, 1962, it was duly
incorporated."
• The trial court found defendant Daffon liable for the quasi delict under Article 2176
of the Civil Code however absolved from liability the three other defendants-
officials of the Manila Technical Institute citing that Article 2180 is not applicable in
the case at hand.
ISSUES & ARGUMENTS

• W/N the trial court erred in absolving the defendant-school officials.
YES, DEFENDANTS-SCHOOL OFFICIALS ARE LIABLE UNDER ART.

2180
• The lower erred in law in absolving defendants-school officials on the ground that
they could be held liable under Article 2180, Civil Code, only if the student who
inflicted the fatal fistblows on his classmate and victim "lived and boarded with his
teacher or the other defendants officials of the school." As stated above, the phrase
used in the cited article — "so long as (the students) remain in their custody" means
the protective and supervisory custody that the school and its heads and teachers BON ARCILLA
Page 214 of 528

195 Amadoras vs. CA |
FACTS
• Alfredo Amadora is a student of Colegio de San Jose Recoletos. While he was in the
school’s auditorium he was shot to death by a classmate in the name of Pablito
Daffon. The latter was then convicted of homicide through reckless imprudence.
• The victim’s parents sued for damages under Art. 2180 against the school, the
principal, dean for boys, the Physics teacher, the accused, his parents and some
other students along with their parents.
• Later, the complaint against the other students and their parents were dropped. The
Amadoras contend that the presence of Alfredo was by reason of a Physics
experiment, hence the student is still under custody of the school at the time of the
incident.
• The school, however, denies liability since his presence was merely to submit the
Physics project and that the semester had already ended.
ISSUES & ARGUMENTS

• W/N private respondents are liable
No.
• Article 2180 applies to schools whether academic or non-academic. The student is

deemed in the custody of the school as long as he is under the control and influence
of the school and is within its premises, whether the school semester has just begun
or has ended.
• The liability of the article is by the head superior in-charge to the student and not by
the school who could be liable under respondeat superior. Both have the defense of
bonus pater familias. In this case the evidence did not support who the in-charge
teacher was other than the fact he submitted his Physics report.
• And even if the Physics teacher was in fact in charge there is no showing that he was
negligent in the supervision and discipline of the accused. The private respondents
properly adduced evidence to prove they exercised bonus pater familias.
JOY ADRANEDA
Page 215 of 528

196 Salvosa vs. IAC| Padilla • Art. 2180 — 'so long as (the students) remain in their custody’ means the protective
G.R. No. 70458 October 5, 1988 |SCRA and supervisory custody that the school and its heads and teachers exercise over the
pupils and students for as long as they are at attendance in the school, including recess
FACTS time.
o Petitioner Baguio Colleges Foundation (BCF) is an academic institution and an • A "recess…at attendance in the school," contemplates a situation of temporary
institution of arts and trade. adjournment of school activities where the student still remains within call of his
o Petitioner Benjamin Salvosa is the President and Chairman of the Board of BCF. mentor and is not permitted to leave the school premises, or the area within which
o The Baguio Colleges Foundation ROTC Unit had Jimmy B. Abon as its duly the school activity is conducted.
appointed armorer. As armorer of the ROTC Unit, Abon received his appointment • A student not "at attendance in the school" cannot be in "recess" thereat.
from the AFP. Not being an employee of the BCF, he also received his salary and • The mere fact of being enrolled or being in the premises of a school without
orders from the AFP. Abon was also a commerce student of the BCF. more does not constitute "attending school" or being in the "protective and
o On 3 March 1977, at around 8:00 p.m., in the parking space of BCF, Abon shot supervisory custody' of the school, as contemplated in the law.
Napoleon Castro a student of the University of Baguio with an unlicensed firearm • Moreover, Abon was supposed to be working in the armory with definite
which the former took from the armory of the ROTC Unit of the BCF. As a result, instructions from his superior, the ROTC Commandant, when he shot Castro.
Castro died and Abon was prosecuted for, and convicted of the crime of Homicide
by Military Court.
o The heirs of Castro sued for damages.
o TC sentenced Abon, Salvosa and BCF, jointly and severally liable to pay the heirs
of Castro.
o CA affirmed with modification in the amount of damages.
ISSUES & ARGUMENTS

• W/N Salvosa and BCF can be held solidarity liable with Abon for damages
under Article 218012 of the Civil Code, as a consequence of the tortious act of
Abon.
o TC and CA: Yes. Abon was in the protective and supervisory custody
of the BCF when he shot Castro as he must have been attending
night classes and therefore that hour in the evening was just about
dismissal time for him or soon thereafter. The time interval is safely
within "recess time".
No. Abon cannot be considered to have been "at attendance in the school," or in
the custody of BCF, when he shot Castro. Logically, therefore, Salvosa and BCF
cannot under Art. 2180 of the Civil Code be held solidarity liable with Abon for
damages resulting from his acts.
• Rationale behind Art. 2180: So long as the student remains in the custody of a
teacher, the latter "stands, to a certain extent, in loco parentis [as to the student] and
[is] called upon to exercise reasonable supervision over the conduct of the [student].
12 Teachers or heads of establishments of arts and trades are liable for "damages caused by their pupils and
NICO CRISOLOGO
students or apprentices, so long as they remain in their custody."
Page 216 of 528
197 Phil. School of Business Administration v CA | Padilla • Certainly, no student can absorb the intricacies of physics or higher mathematics or
February 4, 1992 | 205 SCRA 729 explore the realm of the arts and other sciences when bullets are flying or grenades
exploding in the air or where there looms around the school premises a constant
FACTS threat to life and limb.
• A stabbing incident which caused the death of Carlitos Bautista while on the • Necessarily, the school must ensure that adequate steps are taken to maintain peace
second-floor premises of the Philippine School of Business Administration (PSBA) and order within the campus premises and to prevent the breakdown thereof.
prompted the parents of the deceased to file suit in the RTC for damages against the • A perusal of Article 2176 shows that obligations arising from quasi-delicts or tort,
said PSBA and its corporate officers. also known as extra-contractual obligations, arise only between parties not otherwise
• At the time of his death, Carlitos was enrolled in the third year commerce course at bound by contract, whether express or implied.
the PSBA. It was established that his assailants were not members of the school's • However, this impression has not prevented this Court from determining the
academic community existence of a tort even when there obtains a contract. In Air France vs. Carrascoso,
• Specifically, the suit impleaded the PSBA and its president, VP, treasurer, and Chief the private respondent was awarded damages for his unwarranted expulsion from a
of Security first-class seat aboard the petitioner airline.
• Substantially, the plaintiffs (now private respondents) sought to adjudge them liable • In the circumstances obtaining in the case at bar, however, there is, as yet, no
for the victim's untimely demise due to their alleged negligence, recklessness and finding that the contract between the school and Bautista had been breached thru
lack of security precautions, means and methods before, during and after the attack the former's negligence in providing proper security measures. This would be for the
on the victim. trial court to determine. And, even if there be a finding of negligence, the same
• Petitioners herein sought to have the suit dismissed, alleging that since they are could give rise generally to a breach of contractual obligation only.
presumably sued under Article 2180 of the Civil Code, the complaint states no cause • It would not be equitable to expect of schools to anticipate all types of violent
of action against them, as jurisprudence on the subject is to the effect that academic trespass upon their premises, for notwithstanding the security measures installed,
institutions, such as the PSBA, are beyond the ambit of the rule in the afore-stated the same may still fail against an individual or group determined to carry out a
article nefarious deed inside school premises and environs. Should this be the case, the
• The TC overruled the petitioner’s contention and dismissed their petition. This was school may still avoid liability by proving that the breach of its contractual obligation
affirmed by the CA to the students was not due to its negligence.
• The respondent appellate court primarily anchored its decision on the law of quasi-
delicts, as enunciated in Articles 2176 and 2180 of the Civil Code
ISSUES & ARGUMENTS

• W/N the court erred in dismissing the petition.
Yes. (But the court did not agree with the premise of the CA for holding such)
• Article 2180, in conjunction with Article 2176 of the Civil Code, establishes the rule
of 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 he educational institution
sought to be held liable for the acts of its pupils or students while in its custody.
This material situation does not exist in the present case. However, this does not
necessarily follow that the school is exculpated from liability.
• 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.
JOHN FADRIGO
Page 217 of 528

198 Mercado vs. Court of Appeals | Labrador
G.R. No. 87584, May 30, 1960 | 108 Phil. 414
FACTS
• Augusto Mercado and Manuel Quisumbing, Jr. are both pupils of the Lourdes
Catholic School, Kanlaon, Quezon City.
• A ‘pitogo’ (an empty nutshell used by children as a piggy bank) belonged to Augusto
Mercado but he lent it to Benedicto Lim and in turn Benedicto lent it to Renato
Legaspi.
• Renato was not aware that the ‘pitogo’ belonged to Augusto.
• Manuel Quisumbing, Jr. thought it was Benedicto’s, so when Augusto attempted to
get the ‘pitogo’ from Renato, Manuel, Jr. told him not to do so because Renato was
better at putting the chain into the holes of the ‘pitogo’.
• Augusto resented his remark and pushed Manuel, Jr., which started the fight.
• After successive blows to Manuel, Jr., Augusto cut him on the right cheek with a
piece of razor.
• Manuel, Jr. and his father filed a complaint against Ciriaco Mercado, Augusto’s
father.
ISSUES & ARGUMENTS

• W/N the teacher or head of the school should be held responsible instead of
the father?
o Petitioner: Since the incident occurred in the school during recess time,
through no fault of the father.
NO. CHILDREN WERE NOT IN THEIR CUSTODY.

• Petitioner rests his claim on the last paragraph of Art. 2180 of the Civil Code:
o “Lastly, teachers or heads of establishments of arts and trades shall be
liable for damages caused by their pupils and students or apprentices, so
long as they remain in their custody.”
• That clause contemplates a situation where the pupil lives and boards with the
teacher, such that the control, direction and influence on the pupil supersedes those
of the parents.
• In these circumstances the control or influence over the conduct and actions of the
pupil would pass from the father and mother to the teacher; and so would the
responsibility for the torts of the pupil.
• Such a situation does not appear in the case at bar; the pupils appear to go to school
during school hours and go back to their homes with their parents after school is
over.
FRANCIS ESPIRITU
Page 218 of 528

199 Ylarde v Aquino | GANCAYCO, J
G.R. No. L-33722, July 29, 1988 | 163 SCRA 697
FACTS
• June 11 1951: Juanito Chan, son of Chan Lin Po and Remedios Diala, drove and
operated a motor vehicle (a truck) along Rizal Ave Ext, Manila in a reckless and
imprudent manner thereby causing to hit Nicolas Paras, 65 yo, and ran over his
head, crushing it, resulting to his instantaneous death; facs revealed that the truck
was registered in the name of Lim Koo.
• At the initial stage of the criminal trial, Petitioner, Estanislawa Canlas (widow of
Nicolas, representing also 5 minor children), made a reservation to file a separate
civil action.
• TC: Juanito is guilty, serve sentence of 1yr-8mos, plus 5K indeminity.
• CA: modified, 1yr not less than 4 yrs of imprisonment, indemnity also affirmed.
• In the civil action, same facts were alleged. Defendants disclaimed liability by
establishing that Juanito is married and is no longer a minor living in the company
of his parents, and that he is also not an employee of Lim Koo. Thus, Neither
Juanito’s parents can be made liable under vicarious liability (2180 of the NCC) nor
the owner of vehicle be the subsidiary liable under 103 of the RPC.
• Civil action: dismissed, since petitioner already tried to execute the indemnity
adjudged in the crim action and Juanito already served subsidiary imprisonment by
virtue of his inability to pay indemnity. Petitioner insists on the liability of parents
and truck owner. MR denied, hence this petition.
ISSUES & ARGUMENTS

• W/N Respondents can be made liable over the civil liability of Juanito?
NO.
• 2180 par 5 of the NCC (primary liab-vicarious liab) only applies if the offender is a
MINOR LIVING in the COMPANY of his PARENTS. In this case, Juanito was
already married and lives independently from his parents
• 103 of the RPC (subsidiary liab) only attaches if EER between the owner and
offender is established and that the act happened while he was discharging his duties
(as employee). In this case, no evidence was presented to establish such relationship.
NB: The civil complaint was confused with the nature of liability to charge (103 or 2180).
Court however clarified that the lower court erred when they adjudged that the civil
action is barred by res judicata. The civil action from crim act and indep civil action are
of different nature and purpose. The 2 cases affect different parties. In the indep civil
action, subsidiary and vicarious liab were being established. Nevertheless, since 2180 of
NCC and 103 of RPC was inapplicable, the action was still dismissed.
TC decision affirmed: Petition is dismissed. TIN DINO
Page 219 of 528

200 Joseph Saladuga vs. Far Eastern University documents about Galaxy were presented during trial; however, no
GR 179337, April 30, 2008/Ynares-Santiago J. evidence as to the qualifications of Rosete as a security guard for the
university was offered.
FACTS o Respondents also failed to show that they undertook steps to ascertain and
• Petitioner is a sophomore law student in the respondent school. confirm that the security guards assigned to them actually possess the
• While at the school premises, he was shot by the security of said school Alejandro qualifications required in the Security Service Agreement. It was not
Rosete of Galaxy Management Corporation proven that they examined the clearances, psychiatric test results, 201 files,
• He was rushed to the FEU hospital due to the wound and other vital documents enumerated in its contract with Galaxy.
• Since no charges were filed against Rosete, he was released by the police.
• Petitoner though filed a complaint for damages on galaxy and FEU
• FEU appealed this decision
ISSUES & ARGUMENTS

• W/N FEU should pay damages.
Yes
• It is undisputed that petitioner was enrolled as a sophomore law student in

respondent FEU. As such, there was created a contractual obligation between the
two parties. On petitioner's part, he was obliged to comply with the rules and
regulations of the school. On the other hand, respondent FEU, as a learning
institution is mandated to impart knowledge and equip its students with the
necessary skills to pursue higher education or a profession. At the same time, it is
obliged to ensure and take adequate steps to maintain peace and order within the
campus.
o It is settled that in culpa contractual, the mere proof of the existence of the
contract and the failure of its compliance justify, prima facie, a
corresponding right of relief.
o In the instant case, we find that, when petitioner was shot inside the
campus by no less the security guard who was hired to maintain peace and
secure the premises, there is a prima facie showing that respondents failed
to comply with its obligation to provide a safe and secure environment to
its students.
• In order to avoid liability, however, respondents aver that the shooting incident was
a fortuitous event because they could not have reasonably foreseen nor avoided the
accident caused by Rosete as he was not their employee; and that they complied with
their obligation to ensure a safe learning environment for their students by having
exercised due diligence in selecting the security services of Galaxy.
o After a thorough review of the records, we find that respondents failed to
discharge the burden of proving that they exercised due diligence in
providing a safe learning environment for their students. They failed to
prove that they ensured that the guards assigned in the campus met the
requirements stipulated in the Security Service Agreement. Indeed, certain JOFEE CUENCA
Page 220 of 528

201 Afialda v. Hisole | Reyes
G.R. No. L-2075 November 29, 1949| 85 PHIL 67
FACTS
• Loreto Afialda was employed by the Hisole spouses as the caretaker of their
carabaos
• One fateful day, while tending to the carabaos, Afialda was gored by one of them,
he died.
ISSUES & ARGUMENTS

• W/N the Hisole spouses are liable for damages as owners of the carabaos
o Petitioner: Widow of Afialda contends that the civil Code provides that
the possessor of an animal is liable for any damage it may cause, even if
such animal should escape from him or stray away.
o Respondent: Spouses posit that there was an assumption of risk,
therefore they are not liable.
NO THE SPOUSES ARE NOT LIABLE

• The animal was in the custody and under the control of the caretaker who was paid
to work as such. It was his business to try to prevent the animal from causing injury
or damage to anyone, including himself.
• Being injured by the animal under those circumstances was one of the risks of his
occupation, which he had voluntarily assumed and for which he must take the
consequences.
• The owner of an animal is only answerable for damages caused to a stranger, and for
that damage caused to the caretaker of the animal, the owner would be liable only if
he had been negligent or at fault under article 1902 of the Civil Code
• It is essential that there be fault or negligence on the part of the defendants as the
owners of the animal that cased the damage. [But the complaint contains no
allegation of those points]
CHESKA RESPICIO
Page 221 of 528

202 Vestil vs. IAC |
G.R. No. 74431 November 6, 1989 |
FACTS
• On July 29, 1915, Theness was bitten by a dog while she was playing with a child of
the petitioners in the house of the late Vicente Miranda, the father of Purita Vestil.
• She was rushed to the hospital but although she was discharged after nine days, she
was readmitted one week later. She died of bronchopneumonia.
• Uys sued vestals for damager.
ISSUES & ARGUMENTS

• W/N Vestil is responsible for the dog bite.
Yes.
Art. 2183. The possessor of an animal or whoever may make use of the same is
responsible for the damage which it may cause, although it may escape or be lost.
This responsibility shall cease only in case the damage should come from force
majeure or from the fault of the person who has suffered damage.
• Vestil is not really the owner of the house, which was still part of Vicente Miranda's
estate. She and her husband were its possessors at the time of the incident in
question. There is evidence showing that she and her family regularly went to the
house, once or twice weekly and used it virtually as a second house. Interestingly,
her own daughter was playing in the house with Theness when she was bitten by the
dog.The dog remained in the house even after the death of Vicente Miranda in 1973
and until 1975, when the incident in question occurred. Also, the vestils offered to
assist the Uys with their hospitalization expenses although Purita said she knew
them only casually.
• The contention that broncho pneumonia is not related to the dog bite is belied by
the statement of the doctors that it is a complication which may arise from rabies.
Theness showed signs of hydrophobia, a symptom of rabies.
• Lastly, the court ruled that for 2183 applies not only to wild and vicious animals but
also tame
“According to Manresa the obligation imposed by Article 2183 of the Civil Code is not
based on the negligence or on the presumed lack of vigilance of the possessor or user of
the animal causing the damage. It is based on natural equity and on the principle of social
interest that he who possesses animals for his utility, pleasure or service must answer for
the damage which such animal may cause.”
JAN PORTER
Page 222 of 528

203 Chapman vs. Underwood | Moreland, J.:
G.R. No. 9010, March 28, 1914 | 27 PHIL 375
FACTS
• At the time of the accident, there was a single-track street-car line running along
Calle Herran, with occasional switches to allow cars to meet and pass each other
o One of these switches was located at the scene of the accident
• Chapman was visiting a friend (Creveling), in front of whose house the accident
happened
• Chapmen wanted to board a certain ‘San Marcelino’ car from Sta. Ana bound to
Manila
o He was told by Creveling that the car was approaching so he immediately
passed from the gate into the street to signal and board the car
o He attempted to board the front platform but seeing he could not reach it
without extra exertion, stopped beside the car, facing toward the rear
platform, and waited for it to come abreast him in order to board
o While in that position, he was struck from behind and run over by
Underwood’s automobile (driven by his chauffer, a competent driver)
• The trial court found for the defendant, hence the present petition.
ISSUES & ARGUMENTS

• W/N Underwood, the owner of an automobile, would be responsible for the
acts of a competent driver, whether present or not, where the automobile
causing the injury is a part of a business enterprise and is being driven in
furtherance f the owner’s business at the time the injury complained of is
caused.
NO.
• The owner of an automobile, present in the vehicle, is not liable for the negligent
acts of a competent driver unless such acts are continued for such a length of time
as to give the owner a reasonable opportunity to observe them and to direct the
driver to desist therefrom, and fail to do so
• If a competent driver of an automobile in which the owner thereof is at the time
present, by a sudden act of negligence, without the owner having a reasonable
opportunity to prevent the act or its continuance, violates the law, the owner of the
automobile is not responsible, either civilly or criminally, 223herefore
o The act complained of must be continued in the presence of the owner for
such a length of time that he, by acquiescence, makes his driver’s act his
own
CEO OCAMPO
Page 223 of 528

204 First Malayan Leasing v CA | GRIÑO-AQUINO. J.: • In contemplation of law, the owner/operator of record is the employer of the driver,
G. R. No. 91378 June 9, 1992 | the actual operator and employer being considered merely as his agent
• In order for a transfer of ownership of a motor vehicle to be valid against third
FACTS persons. it must be recorded in the Land Transportation Office. For, although valid
• The importance of motor vehicle registration in determining who should be liable between the parties, the sale cannot affect third persons who rely on the public
for the death or injuries suffered by passengers or third persons as a consequence of registration of the motor vehicle as conclusive evidence of ownership. In law,
the operation of a motor vehicle. FMLFC was the owner and operator of the Izusu cargo truck, hence, fully liable to
• On June 26, 1984, Crisostomo B. Vitug filed a civil case against First Malayan third parties injured by its operation due to the fault or negligence of the driver
Leasing and Finance Corporation (FMLFC for short), to recover damages for thereof.
physical injuries, loss of personal effects, and the wreck of his car as a result of a
three-vehicle collision
• Vitug's car was at a full stop at the intersection of New York Street and Epifanio
delos Santos Avenue (EDSA) in Cubao, Quezon City, northward-bound, the on-
coming Isuzu cargo truck bumped, a Ford Granada car behind him with such force
that the Ford car was thrown on top of Vitug's car crushing its roof. The cargo
truck thereafter struck Vitug's car in the rear causing the gas tank to explode and
setting the car ablaze.
• Stunned by the impact. Vitug was fortunately extricated from his car by solicitous
bystanders before the vehicle exploded. However, two of his passengers were
burned to death.
• Vitug's car, valued at P70,000, was a total loss and he lost valuables amounting to
almost P50 k, which included GP watch, a gold Cross pen, necklace with a diamond
pendant, a pair of Bally shoes and a pair of Christian Dior eyeglasses.
• Upon his physician's advice, he received further medical treatment in the United
States which cost him US$2,373.64 for his first trip, and US$5,596.64 for the
second.
• At the time of the accident the Isuzu cargo truck was registered in the name of the
First Malayan Leasing and Finance Corporation (FMLFC) but the latter denied any
liability, alleging that it was not the owner of the truck. Neither the employer of the
driver Crispin Sicat, because it had sold the truck to Vicente Trinidad, after the latter
had paid all his monthly amortizations.
ISSUES & ARGUMENTS

• W/N FMLFC is liable as the registered owner of the Isuzu truck even if it
has already sold the same to Trinidad
Yes
• This Court has consistently ruled that regardless of who the actual owner of a motor
vehicle might be, the registered owner is the operator of the same with respect to
the public and third persons, and as such, directly and primarily responsible for the
consequences of its operation.
MAGIC MOVIDO
Page 224 of 528

205 Manlangit vs. Urgel | Puno case for the criminal negligence of his employee only by reason of his subsidiary
A.M. No. MTJ-95-1028, December 4, 1995 | civil liability under the law.
• In the present case, nowhere does it show that Manlangit participated in, abetted or
FACTS even approved the negligent and reckless manner in which his driver maneuvered
• Complainant Manlangit is the owner and operator of a passenger jeepney, driven by the vehicle on that blind curve. It appears that such move by Castillo was a split
Castillo. On its usual route to Catanduanes, Manlangit and some passengers were second judgment which left neither the Manlangit nor any of the passengers time to
inside the jeep. Castillo then occupied the wrong lane while approaching a blind react.
curve. At the curve, there was suddenly a parked dump truck. Since it was too late to • The erroneous issuance of the warrant of arrest against Manlangit necessarily caused
avoid the collision, Castillo swerved the jeep to the right. While he and Manlangit him and his family undue anxiety, humiliation and embarrassment. Indeed,
were able to jump off the jeepney before it plunged into the river, the other complainant had to hire a counsel and incur expenses for his bond to fight for his
passengers were not as lucky and suffered injuries as a result of the crash. liberty which he could have lost due to a patently erroneous warrant of arrest issued
• A complaint for serious physical injuries through reckless imprudence was filed by respondent judge
against Castillo and Manlangit in the sala of Judge Urgel. Upon service of the
warrant of arrest, Manlangit filed a Motion to Drop him from the Criminal Judge Urgel fined P1,000.00.
Complaint and Quash the Warrant – granted.
• Manlangit then filed an administrative complaint against Judge Urgel, charging him
that the erroneous issuance of the warrant caused him and his family grave
humiliation, undue embarrassment and anxiety.
• In answer to the complaint, Judge Urgel explained that the preliminary examination
showed that Manlangit was in the vehicle at the time of the incident. And so, he
based the order of arrest on the doctrine that “An owner who sits in his automobile,
or other vehicle, and permits his driver to continue in violation of the law by the
performance of negligent acts, after he has had a reasonable opportunity to observe
them and to direct that the driver cease therefrom, becomes himself responsible for
such acts.
• The Court Administrator recommended that respondent judge be meted a severe
reprimand for the erroneous issuance of a warrant of arrest against complainant.
ISSUES & ARGUMENTS

• W/N Judge Urgel erroneously issued a warrant of arrest against Manlangit.
YES. JUDGE URGEL FINED FOR THE ERRONEOUS ISSUANCE OF A

WARRANT OF ARREST AGAINST MANLANGIT.
• The criminal act of one person cannot be charged to another without a showing that
the other participated directly or constructively in the act or that the act was done in
furtherance of a common design or purpose for which the parties were united in
intention. Thus, an employer is not criminally liable for the criminal acts of his
employee or agent unless he, in some way, participates in, counsels or abets his
employee's acts or omissions.
• However, under Article 102, in relation to Article 103 of the Revised Penal Code,
the employer's liability for the criminal negligence of his employee is subsidiary in
nature and is limited only to civil indemnity. Thus, an employer is party to a criminal CHRISSIE MORAL
Page 225 of 528

206 FGU Insurance vs. CA| Bellosillo leased to Dahl-Jensen. As such, there was no vinculum juris between them as
G.R. No. 118889, March 23, 1998 | 287 SCRA 718 employer and employee.
• We now correlate par. 5 of Art. 2180 with Art. 2184 of the same Code which
FACTS provides: "In motor vehicle mishap, the owner is solidarily liable with his driver, if the former,
• On 21 April 1987, two Mitsubishi Colt Lancers collided along EDSA at around who was in the vehicle, could have by the use of due diligence, prevented the misfortune . . . . If the
3AM. At that time, the car owned by Soriano was being driven by Jacildone. The owner was not in the motor vehicle, the provisions of article 2180 are applicable." Obviously,
other car was owned by FILCAR Transport, Inc. and was being driven by Dahl- this provision of Art. 2184 is neither applicable because of the absence of master-
Jansen, as lessee. Said Dahl-Jensen, being a Danish tourist, did not have Philippine driver relationship between respondent FILCAR and Dahl-Jensen. Clearly,
driver’s license. Dahl-Jensen had swerved to his right lane, thereby hitting the left petitioner has no cause of action against respondent FILCAR on the basis of quasi-
side of the car of Soriano. delict; logically, its claim against respondent FORTUNE can neither prosper.
• Petitioner FGU Insurance paid Soriano P25,382.20 pursuant to the insurance
contract it had with the latter. After which, it sued Dahl-Jensen, FILCAR, and Petition denied. CA affirmed.
FORTUNE Insurance for quasi-delict before the RTC of Makati.
• Summons was not served on Dahl-Jensen; and upon motion of the petitioner, he
was later dropped from the complaint. The RTC dismissed the complaint on the
ground that petitioner had failed to substantiate its claim for subrogation.
• The CA affirmed the RTC decision, although on a different ground, i.e. that only
Hence this appeal.
ISSUES & ARGUMENTS

• W/N FILCAR and FORTUNE are liable.
FILCAR AND FORTUNE ARE NOT LIABLE.

..."
• Article 2180, Civil Code: “…Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their assigned tasks, even though the
former are not engaged in any business or industry…”
• The liability imposed by Art. 2180 arises by virtue of a presumption juris tantum of
negligence on the part of the persons made responsible thereunder, derived from
their failure to exercise due care and vigilance over the acts of subordinates to
prevent them from causing damage. 7 Yet, Art. 2180 is hardly applicable because
FILCAR, being engaged in a rent-a-car business was only the owner of the car DIANE LIPANA
Page 226 of 528

207 Aguilar vs. Commercial Savings Bank| Quisumbing persons for deaths, injuries and damages it caused. This is true even if the vehicle is
G.R. No. 128705, June 29, 2001 | leased to third persons.
• The main aim of motor vehicle registration is to identify the owner so that if any
FACTS accident happens, or that any damage or injury is caused by the vehicle on the public
• Petitioner Conrado Aguilar, Sr. is the father of Conrado Aguilar, Jr., the victim in a highways, responsibility therefore can be fixed on a definite individual, the registered
vehicular accident involving a Lancer car registered in the name of respondent bank, owner.
but driven by co-respondent Ferdinand G. Borja. • The protection that the law aims to extend to him would become illusory were the
• September 8, 1984, 11:15 P.M., Aguilar, Jr. and his companions, among them registered owner given the opportunity to escape liability by disproving his
Nestor Semella, were crossing Zapote-Alabang Road. A Lancer with plate no. NNP ownership. If the policy of the law is to be enforced and carried out, the registered
349 and driven by Ferdinand Borja, overtook a passenger jeepney and the Lancer hit owner should not be allowed to prove the contrary to the prejudice of the person
Aguilar and Semella. Aguilar was thrown upwards and smashed against the injured, that is, to prove that a third person or another has become the owner, so
windshield of the Lancer, which did not stop. Aguilar was pronounced dead on that he may thereby be relieved of the responsibility to the injured person.
arrival at the hospital. • A registered owner who has already sold or transferred a vehicle has the recourse to
• Petitioner filed a complaint for damages against respondents in the Regional Trial a third-party complaint, in the same action brought against him to recover for the
Court of Makati, Branch 59. Borja did not file his answer within the reglementary damage or injury done, against the vendee or transferee of the vehicle. The
period, hence, he was declared in default. inconvenience of the suit is no justification for relieving him of liability; said
• At the trial, respondent bank admitted that the Lancer was registered in its name at inconvenience is the price he pays for failure to comply with the registration that the
the time of the incident. Petitioner’s counsel also showed that Borja was negligent law demands and requires.
in driving the car. • The registered owner is primarily responsible for the damage caused to the vehicle
• TC held defendants liable for Aguilar’s death and also found that Borja was an of the plaintiff, but he has a right to be indemnified by the real or actual owner of
assistant vice president of respondent bank at the time of the incident. It held that the amount that he may be required to pay as damage for the injury caused to the
under Art. 2180 of the Civil Code, the negligence of the employee is presumed to be plaintiff.
that of the employer, whose liability is primary and direct; and that respondent bank
failed to exercise due diligence in the selection of its employees.
• CA reversed the TC reasoning that before it can apply Art. 2180 on which private
respondent anchored its claim of the bank’s negligence, petitioner must first
establish that Borja acted on the occasion or by reason of the functions entrusted to
him by his employer. The appellate court found no evidence that Borja had acted as
respondent bank’s assistant vice-president at the time of the mishap.
ISSUES & ARGUMENTS

• W/N respondent bank, as the Lancer’s registered owner, is liable for
damages?
o Petitioner: Existence or absence of employer-employee
relationship between the bank and Borja is immaterial in this case
for the registered owner of a motor vehicle is legally liable for the
damages incurred by third persons for injuries sustained in the
operation of said vehicle.
YES, Respondent is liable by being merely the registered owner of the car.
Existence or absence of EER is immaterial.
• In BA Finance Corporation vs. Court of Appeals, the SC already held that the registered
owner of any vehicle, even if not for public service, is primarily responsible to third PAT FERNANDEZ
Page 227 of 528

208 Caedo vs. Yu Khe Thai | Makalintal servant, if known to the master and susceptible of timely correction by him, reflects
G.R. No. L-20392, December 18, 1968 | 26 SCRA 410 his own negligence if he fails to correct it in order to prevent injury or damage.
• No negligence for having employed Bernardo at all may be imputed to Yu Khe
FACTS Thai. Negligence on the part of the latter, if any, must be sought in the immediate
• As a result of a vehicular accident in which plaintiff Marcial Caedo and several setting and circumstances of the accident, that is, in his failure to detain the driver
members of his family were injured they field this suit for recovery of damages from from pursuing a course which not only gave him clear notice of the danger but also
the defendants. sufficient time to act upon it.
• The mishap occurred at about 5:30 in the morning on EDSA in the vicinity of San • However, we do not see that such negligence may be imputed. The car, as has been
Lorenzo Village. Marcial was driving his Mercury car, with his wife and daughters, stated, was not running at an unreasonable speed. The road was wide and open, and
on his way to the airport, where his son was scheduled to take a plane for Mindoro. devoid of traffic that early morning. There was no reason for the car owner to be in
• Coming from the opposite direction was the Cadillac of Yu Khe Thai, with his any special state of alert.
driver Rafael Bernardo at the wheel, taking the owner to Wack Wack for his regular • He could not have anticipated his driver’s sudden decision to pass the carretela on its
round of golf. left side in spite of the fact that another car was approaching from the opposite
• The two cars were traveling at fairly moderate speeds, considering the condition of direction. The time element was such that there was no reasonable opportunity for
the road and the absence of traffic. Their headlights were mutually noticeable from a Yu Khe Thai to assess the risks involved and warn the driver accordingly.
distance. • The test of the owner’s negligence, within the meaning of Article 2184, is his
• Ahead of the Cadillac, going in the same direction, was a carretela with two lights, omission to do that which the evidence of his own senses tells him he should do in
one on each side. order to avoid the accident. And as far as perception is concerned, absent a
• Bernardo, instead of slowing down or stopping altogether behind the carretela until minimum level imposed by law, a maneuver that appears to be fraught with danger
that lane was clear, veered to the left in order to pass. As he did so the curved end to one passenger may appear to be entirely safe and commonplace to another.
of his car’s right rear bumper caught the forward rim of the rig’s left wheel,
wrenching it off and carrying it along as the car skidded obliquely to the other lane,
where it collided with the oncoming vehicle.
ISSUES & ARGUMENTS

• W/N Yu Khe Thai, owner of the Cadillac, is solidarily liable with the driver?
NO. YU KHE THAI IS NOT SOLIDARILY LIABLE.

• If the causative factor was the driver’s negligence, the owner of the vehicle who was
present is likewise held liable if he could have prevented the mishap by the exercise
of due diligence.
• An owner who sits in his automobile, or other vehicle, and permits his driver to
continue in a violation of law by the performance of his negligent acts, after he has
had a reasonable opportunity to observe them and to direct that the driver cease
therefrom, becomes himself responsible for such acts.
• On the other hand, if the driver, by a sudden act of negligence, and without the
owner having a reasonable opportunity to prevent the act or its continuance, injures
a person or violates the criminal law, the owner of the automobile, although present
therein at the time the act was committed, is not responsible, either civilly or
criminally therefor.
• The basis of the master’s liability in civil law is not respondeat superior but rather the
relationship of pater-familias. The theory is that ultimately the negligence of the
FRANCIS ESPIRITU
Page 228 of 528

209 Malayan Insurance vs CA | PADILLA, J and/or ordering said San Leon Rice Mill, Inc. to reimburse and indemnify the
G.R. No. L-36413, September 26, 1988 | 165 SCRA 536 petitioner for any sum that it may be ordered to pay the plaintiff.
• Lower court adjudged Sio Choy and Malayan Insurance Co., Inc., and third-party
FACTS defendant San Leon Rice Mill, Inc severally liable. It further held that with respect to
• Petitioner, Malayan Insurance Co., Inc., issued in favor of private respondent Sio Malayan Insurance, its liability will be up to P20,000 only
Choy Private Car Comprehensive Policy covering a Willys jeep. • CA affirmed but it ruled, however, that the San Leon Rice Mill, Inc. has no
• The insurance coverage was for "own damage" not to exceed P600.00 and "third- obligation to indemnify or reimburse the petitioner insurance company for whatever
party liability" in the amount of P20,000.00. amount it has been ordered to pay on its policy, since the San Leon Rice Mill, Inc. is
• During the effectivity of said insurance policy not a privy to the contract of insurance between Sio Choy and the insurance
• The insured jeep, while being driven by one Juan P. Campollo an employee of the company.
respondent San Leon Rice Mill, Inc., collided with a passenger bus belonging to the
respondent Pangasinan Transportation Co., Inc. (PANTRANCO, for short) causing ISSUES & ARGUMENTS
damage to the insured vehicle and injuries to the driver, Juan P. Campollo, and the • W/N the trial court, as upheld by the Court of Appeals, was correct in
respondent Martin C. Vallejos, who was riding in the ill-fated jeep. holding petitioner and respondents Sio Choy and San Leon Rice Mill, Inc.
• As a result, Martin C. Vallejos filed an action for damages against Sio Choy, Malayan "solidarily liable" to respondent Vallejos
Insurance Co., Inc. and the PANTRANCO • W/N petitioner is entitled to be reimbursed by respondent San Leon Rice
• He prayed therein that the defendants be ordered to pay him, jointly and severally, Mill, Inc. for whatever amount petitioner has been adjudged to pay
the amount of P15,000.00, as reimbursement for medical and hospital expenses; respondent Vallejos on its insurance policy.
P6,000.00, for lost income; P51,000.00 as actual, moral and compensatory damages;
and P5,000.00, for attorney's fees. HOLDING & RATIO DECIDENDI
• PANTRANCO claimed that the jeep of Sio Choy was then operated at an excessive
speed and bumped the PANTRANCO bus which had moved to, and stopped at, As to the First issue: NO
the shoulder of the highway in order to avoid the jeep; and that it had observed the • As to the first issue, it is noted that the trial court found, as affirmed by the appellate
diligence of a good father of a family to prevent damage, especially in the selection court, that petitioner and respondents Sio Choy and San Leon Rice Mill, Inc. are
and supervision of its employees jointly and severally liable to respondent Vallejos.
• Defendant Sio Choy and the petitioner insurance company, in their answer, also • The SC did not agree with the aforesaid ruling. It held instead that it is only
denied liability to the plaintiff, claiming that the fault in the accident was solely respondents Sio Choy and San Leon Rice Mill, Inc, (to the exclusion of the
imputable to the PANTRANCO. petitioner) that are solidarily liable to respondent Vallejos for the damages awarded
• Sio Choy, however, later filed a separate answer with a cross-claim against the herein to Vallejos.
petitioner wherein he alleged that he had actually paid the plaintiff, Martin C. • Respondent Sio Choy is made liable to said plaintiff as owner of the ill-fated Willys
Vallejos, the amount of P5,000.00 for hospitalization and other expenses, and, in his jeep, pursuant to Article 2184 of the Civil Code while the liability of respondent San
cross-claim against the herein petitioner, he alleged that the petitioner had issued in Leon Rice Mill, Inc. to plaintiff Vallejos, the former being the employer of the driver
his favor a private car comprehensive policy wherein the insurance company of the Willys jeep at the time of the motor vehicle mishap, is Article 2180 of the
obligated itself to indemnify Sio Choy, as insured, for the damage to his motor Civil Code.
vehicle, as well as for any liability to third persons arising out of any accident • It thus appears that respondents Sio Choy and San Leon Rice Mill, Inc. are the
• Also later, the herein petitioner sought, and was granted, leave to file a third-party principal tortfeasors who are primarily liable to respondent Vallejos. The law states
complaint against the San Leon Rice Mill, Inc. for the reason that the person driving that the responsibility of two or more persons who are liable for a quasi-delict is
the jeep of Sio Choy, at the time of the accident, was an employee of the San Leon solidarily.
Rice Mill, Inc. performing his duties within the scope of his assigned task, and not • On the other hand, the basis of petitioner's liability is its insurance contract with
an employee of Sio Choy; respondent Sio Choy. If petitioner is adjudged to pay respondent Vallejos in the
• More so, San Leon Rice Mill, Inc. is the employer of the deceased driver, Juan P. amount of not more than P20,000.00, this is on account of its being the insurer of
Campollo, it should be liable for the acts of its employee, pursuant to Art. 2180 of respondent Sio Choy under the third party liability clause included in the private car
the Civil Code. The herein petitioner prayed that judgment be rendered against the comprehensive policy.
San Leon Rice Mill, Inc., making it liable for the amounts claimed by the plaintiff • While it is true that where the insurance contract provides for indemnity against
liability to third persons, such third persons can directly sue the insurer, 6 however,
Page 229 of 528
the direct liability of the insurer under indemnity contracts against third party against San Leon Rice Mills, Inc., to be reimbursed by the latter in the amount of
liability does not mean that the insurer can be held solidarily liable with the insured P14,551.50 (which is 1/2 of P29,103.00 )
and/or the other parties found at fault. The liability of the insurer is based on
contract; that of the insured is based on tort.
• In the case at bar, petitioner as insurer of Sio Choy, is liable to respondent Vallejos,
but it cannot, as incorrectly held by the trial court, be made "solidarily" liable with
the two principal tortfeasors namely respondents Sio Choy and San Leon Rice Mill,
Inc. For if petitioner-insurer were solidarily liable then this will result in a violation
of the principles underlying solidary obligation and insurance contracts.
• In the case at bar, the trial court held petitioner together with respondents Sio Choy
and San Leon Rice Mills Inc. solidarily liable to respondent Vallejos for a total
amount of P29,103.00, with the qualification that petitioner's liability is only up to
P20,000.00. In the context of a solidary obligation, petitioner may be compelled by
respondent Vallejos to pay the entire obligation of P29,013.00, notwithstanding the
qualification made by the trial court. But, how can petitioner be obliged to pay the
entire obligation when the amount stated in its insurance policy with respondent Sio
Choy for indemnity against third party liability is only P20,000.00?
As to the second issue, the Court of Appeals erred, in affirming the decision of the trial
court which ruled that petitioner is not entitled to be reimbursed by respondent San
Leon Rice Mill, Inc. on the ground that said respondent is not privy to the contract of
insurance existing between petitioner and respondent Sio Choy.
• The appellate court overlooked the principle of subrogation in insurance contracts.

Subrogation is a normal incident of indemnity insurance Upon payment of the loss,
the insurer is entitled to be subrogated pro tanto to any right of action which the
insured may have against the third person whose negligence or wrongful act caused
the loss. Moreover, that right is not dependent upon , nor does it grow out of any privity of
contract.
• It follows, therefore, that petitioner, upon paying respondent Vallejos the amount of
riot exceeding P20,000.00, shall become the subrogee of the insured, the respondent
Sio Choy; as such, it is subrogated to whatever rights the latter has against
respondent San Leon Rice Mill, Inc. Article 1217 of the Civil Code gives to a
solidary debtor who has paid the entire obligation the right to be reimbursed by his
co-debtors for the share which corresponds to each.
• In accordance with Article 1217, petitioner, upon payment to respondent Vallejos
and thereby becoming the subrogee of solidary debtor Sio Choy, is entitled to
reimbursement from respondent San Leon Rice Mill, Inc..
• In sum, the SC held that only respondents Sio Choy and San Leon Rice Mill, Inc.
are solidarily liable to the respondent Martin C. Vallejos for the amount of
P29,103.00. Vallejos may enforce the entire obligation on only one of said solidary
debtors. If Sio Choy as solidary debtor is made to pay for the entire obligation
(P29,103.00) and petitioner, as insurer of Sio Choy, is compelled to pay P20,000.00
of said entire obligation, petitioner would be entitled, as subrogee of Sio Choy as
TIN DINO
Page 230 of 528

210 University of Manila vs. IAC
FACTS
• Vivencio Sto. Domingo was buried in a lot in the North Cemetery. Apart from the
receipt of the rental, there were no other records regarding his burial
• The Mayor of Manila, in good faith believed that the said lot was covered under
Admin Order 5, whereas the lots would be only rented for a period of 5 years. Due
to this, the body of Vivencio was exhumed.
• During All Saints Day, the family of the deceased was shocked to find that the lot
no longer had the stone marker.
• Thus the family filed a complaint for damages
ISSUES & ARGUMENTS

• W/N the city is liable for damages?
Yes
• With respect to its propriety functions, a city could be sued ex contractu or ex

delicto. It has been held that the maintenance of a cemetery is a propriety function
of the government.
• It is also responsible for the negligence of its agent under the doctrine of respondeat
superior. Thus they are liable for the act of their agents who failed to check and
verify the duration
JOFEE CUENCA
Page 231 of 528

211 Bernardino Jimenez vs City of Manila| Paras Public Market and as tort-feasor under Article 2176 of the Civil Code on quasi-
G.R. No. 71049 May 29, 1987| delicts.
• Article 2189 of the Civil Code of the Philippines which provides that:
FACTS
• In the morning of August 15, 1974, Jimenez, together with his neighbors, went to Provinces, cities and municipalities shall be liable for damages for the
Sta. Ana public market to buy "bagoong" at the time when the public market was death of, or injuries suffered by any person by reason of defective
flooded with ankle deep rainwater. conditions of roads, streets, bridges, public buildings and other public
• After purchasing the "bagoong" he turned around to return home but he stepped on works under their control or supervision.
an uncovered opening which could not be seen because of the dirty rainwater,
causing a dirty and rusty four- inch nail, stuck inside the uncovered opening, to • Petitioner had the right to assume that there were no openings in the middle of the
pierce the left leg of plaintiff-petitioner penetrating to a depth of about one and a passageways and if any, that they were adequately covered. Had the opening been
half inches. covered, petitioner could not have fallen into it. Thus the negligence of the City of
• After administering first aid treatment at a nearby drugstore, his companions helped Manila is the proximate cause of the injury suffered, the City is therefore liable for
him hobble home. the injury suffered by the petitioner.
• He felt ill and developed fever and he had to be carried to Dr. Juanita Mascardo.
• Despite the medicine administered to him by the latter, his left leg swelled with great
pain. He was then rushed to the Veterans Memorial Hospital where he had to be
confined for twenty (20) days due to high fever and severe pain.
• Upon his discharge from the hospital, he had to walk around with crutches for
fifteen (15) days. His injury prevented him from attending to the school buses he is
operating. As a result, he had to engage the services of one Bienvenido Valdez to
supervise his business for an aggregate compensation of nine hundred pesos
(P900.00).
• Petitioner sued for damages the City of Manila and the Asiatic Integrated
Corporation under whose administration the Sta. Ana Public Market had been
placed by virtue of a Management and Operating Contract.
• The lower court decided in favor of respondents, and against the plaintiff dismissing
the complaint with costs against the plaintiff. For lack of sufficient evidence, the
counterclaims of the defendants are likewise dismissed.
• On appeal, the Intermediate Appellate Court held the Asiatic Integrated
Corporation liable for damages but absolved respondent City of Manila.
ISSUES & ARGUMENTS

• W.N the Intermediate Appellate Court erred in not ruling that respondent
City of Manila should be jointly and severally liable with Asiatic Integrated
Corporation for the injuries petitioner suffered.
Yes.
• Respondent City of Manila and Asiatic Integrated Corporation being joint tort-
feasors are solidarily liable under Article 2194 of the Civil Code.
• The City of Manila is likewise liable for damages under Article 2189 of the Civil
Code, respondent City having retained control and supervision over the Sta. Ana SATURDAY ALSCISO
Page 232 of 528

212 Guilatco vs. City of Dagupan| Sarmiento • It is not even necessary for the defective road or street to belong to the
G.R. No. 61516, March 21, 1989 |171 SCRA 382 province, city, or municipality for liability to attach. The article only requires
that either control or supervision is exercised over the defective road or street.
FACTS • This control or supervision is provided for in the charter of Dagupan
• On July 25, 1978, plaintiff Florentina A. Guilatco, a Court Interpreter of Branch III exercised through the City Engineer who according to Section 22 has the
CFI – Dagupan City, while she was about to board a motorized tricycle at a sidewalk following duties, “xxx He shall have the care and custody of the public system of
located at Perez Blvd. (a National Road under the control and supervision of the waterworks and sewers xxx”
City of Dagupan) accidentally fell into a manhole located on the sidewalk, thereby • The same charter also provides that the laying out, construction and improvement
causing her right leg to be fractured. The manhole was partially covered by a of streets and regulation of the use thereof may be legislated by the Municipal
concrete flower pot leaving a gaping hole about 2ft. long by 1 ½ feet wide or 42 cm Board. Thus the charter clearly indicates that the city indeed has supervision and
wide by 75 cm long by 150 cm deep. control over the sidewalk.
• As a result thereof, she had to be hospitalized first at Pangasinan Provincial Hospital • The city cannot be excused from liability by the argument that the duty of the City
where she incurred expenses of P8,053.65. The pain has persisted even after her Engineer to supervise or control the said road belongs more to his functions as an
discharge from the Medical City General Hospital to the present. She still wears ex-officio Highway Engineer or the Ministry of Public Highway than as a city
crutches and she has not yet reported for duty as a court interpreter as she has officer. This is because while he is entitled to an honorarium from the Ministry, his
difficulty of locomotion in going up the stairs of her office. salary from the city government substantially exceeds the honorarium.
• Defendant Alfredo Tangco, City Engineer of Dagupan City and admittedly ex-
officio Highway Engineer, City Engineer of the Public Works and Building Official
for DAgupan City, admitted the existence of the manhole and that said manhole is
owned by the National Government. In his answer, he expressly admitted that he
exercises supervision and control over National roads including the Perez Blvd.
• The Lower Court found in favor of Guilatco but on appeal, the appellate court
reversed the lower court findings on the ground that no evidence was presented by
the plaintiff to prove that the City of Dagupan had “control or supervision” over
Perez Blvd.
ISSUES & ARGUMENTS

• W/N control or supervision over a national road by the city of Dagupan
exists, in effect binding the city to answer for damages in accordance with
Article 2189.
o Respondent City: Perez Blvd. is a national road that is not under the
control or supervision of the City of Dagupan hence no liability
should attach
YES, THE CITY OF DAGUPAN IS LIABLE.
• Art. 2189 provides that “Provinces, cities and municipalities shall be liable for
damages for the death of, or injuries suffered by, any person by reason of the
defective condition of roads, streets, bridges, public buildings, and other
public works under their control or supervision.”
BON ARCILLA
Page 233 of 528

213 Torio vs. Fontanilla| Munoz Palma • This distinction of powers becomes important for purposes of determining the
G.R. No. L-29993 October 23, 1978 | liability of the municipality for the acts of its agents which result in an injury to
third persons.
FACTS • If the injury is caused in the course of the performance of a governmental function
• The Municipal Council of Malasiqui, Pangasinan passed Resolution No. 159 to or duty no recovery, as a rule, can be had from the municipality unless there is an
manage the town fiesta celebration on January 1959. It also passed creating the 1959 existing statute on the matter, nor from its officers, so long as they performed their
Malasiqui 'Town Fiesta Executive Committee which in turn organized a sub- duties honestly and in good faith or that they did not act wantonly and maliciously.
committee on entertainment and stage, with Jose Macaraeg as Chairman. • With respect to proprietary functions, the settled rule is that a municipal
• The council appropriated the amount of P100.00 for the construction of 2 stages, corporation can be held liable to third persons ex contract or ex delicto.
one for the "zarzuela" and another for the cancionan Jose Macaraeg supervised the • The rule of law is a general one, that the superior or employer must answer civilly
construction of the stage and as constructed the stage for the "zarzuela" for the negligence or want of skill of its agent or servant in the course or fine of
• The "zarzuela" entitled "Midas Extravaganza" was donated by an association of his employment, by which another, who is free from contributory fault, is injured.
Malasiqui employees of the Manila Railroad Company in Caloocan, Rizal. The Municipal corporations under the conditions herein stated, fall within the
troupe arrived in the evening of January 22 for the performance and one of the operation of this rule of law, and are liable, accordingly, to civil actions for
members of the group was Vicente Fontanilla. damages when the requisite elements of liability co-exist.
• The program started at about 10:15 o'clock that evening with some speeches, and • It follows that under the doctrine of respondent superior, petitioner-municipality is
many persons went up the stage. The "zarzuela" then began but before the dramatic to be held liable for damages for the death of Vicente Fontanilla if that was
part of the play was reached, the stage collapsed and Vicente Fontanilla who was at attributable to the negligence of the municipality's officers, employees, or agents.
the rear of the stage was pinned underneath. Fontanilla was taken to tile San Carlos • We can say that the deceased Vicente Fontanilla was similarly situated as
General Hospital where he died in the afternoon of the following day Sander The Municipality of Malasiqui resolved to celebrate the town fiesta
• Heirs brought action to enforce liability against the Municipality. Won in CA. in January of 1959; it created a committee in charge of the entertainment
and stage; an association of Malasiqui residents responded to the call for
ISSUES & ARGUMENTS the festivities and volunteered to present a stage show; Vicente Fontanilla
• W/N the celebration of a town fiesta an undertaking in the exercise of a was one of the participants who like Sanders had the right to expect that he
municipality's governmental or public function or is it or a private or would be exposed to danger on that occasion.
proprietary character?
o Fontanilla Heirs: Municipality liable for acts because fiesta is in exercise of its
proprietary acts
o Municipality: As a legally and duly organized public corporation it performs
sovereign functions and the holding of a town fiesta was an exercise of its
governmental functions from which no liability can arise to answer for the
negligence of any of its agents
MUNICIPALITY IS LIABLE BECAUSE TOWN FIESTA IS AN EXERCISE

OF PROPRIETARY FUNCTIONS
• The powers of a municipality are twofold in character public, governmental or

political on the one hand, and corporate, private, or proprietary on the other.
Governmental powers are those exercised by the corporation in administering the
powers of the state and promoting the public welfare and they include the
legislative, judicial public, and political Municipal powers on the other hand are
exercised for the special benefit and advantage of the community and include
those which are ministerial private and corporate. GINO CAPATI
Page 234 of 528

214 Municipality of San Juan vs. CA • Jurisprudence teaches that for liability to arise under Article 2189of the Civil Code,
G.R. No. 121920, August 9, 2005/ Garcia J. ownership of the roads, streets, bridges, public buildings and other public works, is
not a controlling factor, it being sufficient that a province, city or municipality has
FACTS control or supervision thereof.
• Under a "Contract For Water Service Connections”, between the Metropolitan • It is argued, however, that under Section 149, [1][z] of the Local Government Code,
Waterworks and Sewerage System (MWSS) and Kwok Cheung as sole proprietor of petitioner has control or supervision only over municipal and not national roads,
K.C. Waterworks System Construction (KC, for short), the former engaged the like Santolan Road.
services of the latter to install water service connections. o Regulate the drilling and excavation of the ground for the laying of gas,
o The agreement provides: water, sewer, and other pipes; the building and repair of tunnels, sewers,
 The CONTRACTOR agrees to install water service connections, drains and other similar structures; erecting of poles and the use of
transfer location of tapping to the nearest main, undertake crosswalks, curbs and gutters therein, and adopt measures to ensure public
separation of service connection, change rusted connections, safety against open canals, manholes, live wires and other similar hazards
within the service area of the MWSS specified in each job order to life and property, and provide just compensation or relief for persons
covered by this Contract, from the water main up to the suffering from them
installation of the verticals. Tapping of the service pipe • Doubtless, the term "regulate" found in the aforequoted provision of Section 149
connection and mounting of water meter shall be undertaken can only mean that petitioner municipality exercises the power of control, or, at the
exclusively or solely by the MWSS; very least, supervision over all excavations for the laying of gas, water, sewer and
• That same day, KC dispatched five (5) of its workers under Project Engineer other pipes within its territory.
Ernesto Battad, Jr. to conduct the digging operations in the specified place. • The [petitioner] cannot validly shirk from its obligation to maintain and insure the
• The workers dug a hole one (1) meter wide and 1.5 meters deep, after which they safe condition of the road merely because the permit for the excavation may have
refilled the excavated portion of the road with the same gravel and stone excavated been issued by a government entity or unit other than the Appellant San Juan or that
from the area. the excavation may have been done by a contractor under contract with a public
o At that time, only ¾ of the job was finished in view of the fact that the entity like the Appellee MWSS.
workers were still required to re-excavate that particular portion for the • It is the duty of the municipal authorities to exercise an active vigilance over the
tapping of pipes for the water connections to the concessionaires. streets; to see that they are kept in a reasonably safe condition for public travel.
• Meanwhile, between 10 o’clock and 11 o’clock in the evening of 31 May 1988, They cannot fold their arms and shut their eyes and say they have no notice. (Todd
Priscilla Chan was driving her Toyota Crown car with Plate No. PDK 991 at a speed versus City of Troy, 61 New York 506). (Words in bracket supplied).
of thirty (30) kilometers per hour on the right side of Santolan Road towards the
direction of Pinaglabanan, San Juan, Metro Manila. With her on board the car and
seated on the right front seat was Assistant City Prosecutor Laura Biglang-awa.
o The road was flooded as it was then raining hard. Suddenly, the left front
wheel of the car fell on a manhole where the workers of KC had earlier
made excavations. As a result, the humerus on the right arm of Prosecutor
Biglang-awa was fractured.
• Consequent to the foregoing incident, Biglang-awa filed before the Regional Trial
Court at Pasig, Metro Manila a complaint for damages against MWSS, the
Municipality of San Juan and a number of San Juan municipal officials.
ISSUES & ARGUMENTS

• W/N the municipality is liable.
Yes
JOFEE CUENCA
Page 235 of 528

215 De Roy vs. CA | CORTES, J disregarded, since the doctrine of "last clear chance," which has been applied to
G.R. No. 80718, January 29, 1988 | 157 SCRA 757 vehicular accidents, is inapplicable to this case.
FACTS
• The firewall of a burned-out building owned by petitioners collapsed and destroyed
the tailoring shop occupied by the family of private respondents, resulting in injuries
to private respondents and the death of Marissa Bernal, a daughter.
• Private respondents had been warned by petitioners to vacate their shop in view of
its proximity to the weakened wall but the former failed to do so.
• The Regional Trial Court, rendered judgment finding petitioners guilty of gross
negligence and awarding damages to private respondents.
• On appeal, the decision of the trial court was affirmed in toto by the Court of
Appeals in a decision promulgated on August 17, 1987, a copy of which was
received by petitioners on August 25, 1987.
• On September 9, 1987, the last day of the fifteen-day period to file an appeal,
petitioners filed a motion for extension of time to file a motion for reconsideration,
which was eventually denied by the appellate court in the Resolution of September
30, 1987.
• Petitioners filed their motion for reconsideration on September 24, 1987 but this
was denied in the Resolution of October 27, 1987.
ISSUES & ARGUMENTS

• W/N the CA erred in its decision especially when it held petitioner liable
under Art 2190 of the Civil Code
NO..
• The Court finds that the Court of Appeals did not commit a grave abuse of
discretion when it denied petitioners' motion for extension of time to file a motion
for reconsideration, directed entry of judgment and denied their motion for
reconsideration.
• The court correctly applied the rule laid down in Habaluyas Enterprises, Inc. v. Japzon
that the fifteen-day period for appealing or for filing a motion for reconsideration
cannot be extended.
• This Court likewise finds that the Court of Appeals committed no grave abuse of
discretion in affirming the trial court's decision holding petitioner liable under
Article 2190 of the Civil Code, which provides that "the proprietor of a building or
structure is responsible for the damage resulting from its total or partial collapse, if it
should be due to the lack of necessary repairs.
• Nor was there error in rejecting petitioners argument that private respondents had
the "last clear chance" to avoid the accident if only they heeded the warning to
vacate the tailoring shop and , therefore, petitioners prior negligence should be
TIN DINO
Page 236 of 528

216 Gotesco Investment Corporation vs. Chatto | Davide, Jr.
G.R. No. 87584, June 16, 1992 | 210 SCRA 18 • Gotesco could have easily discovered the cause of the collapse if indeed it were due
to force majeure. The real reason why Mr. Ong could not explain the cause is because
FACTS either he did not actually conduct an investigation or because he is incompetent (not
• Gloria E. Chatto and her 15-year old daughter Lina went to see the movie “Mother an engineer, but an architect who had not even passed the government’s
Dear” at Superama I theater, owned by Gotesco Investment Corporation. They examination).
bought balcony tickets but even then were unable to find seats considering the • The building was constructed barely 4 years prior to the accident. It was not shown
number of people patronizing the movie. Hardly 10 minutes after entering the that any of the causes denominated as force majeure obtained immediately before or at
theater, the ceiling of the balcony collapsed and pandemonium ensued. the time of the collapse of the ceiling. Such defects could have been discovered if
• The Chattos managed to crawl under the fallen ceiling and walk to the nearby FEU only Gotesco exercised due diligence and care in keeping and maintaining the
hospital where they were confined and treated for a day. Later, they had to transfer premises. But, as disclosed by Mr. Ong, no adequate inspection of the premises
to UST hospital, and because of continuing pain in the neck, headache, and before the date of the accident.
dizziness, had to even go to Illinois, USA for treatment. • That the structural designs and plans of the building were duly approved by the City
• Gotesco tried to avoid liability by alleging that the collapse was due to force Engineer and the building permits and certificate of occupancy were issued do not
majeure. It maintained that its theater did not suffer from any structural or at all prove that there were no defects in the construction, especially as regards the
construction defect. The trial court awarded actual/compensatory and moral ceiling, considering that no testimony was offered to prove that it was ever
damages and attorney’s fees in favor of the Chattos. The CA also found Gotesco’s inspected at all.
appeal to be without merit. Hence this petition.
• And even assuming arguendo that the cause of the collapse was due to force majeure,
Gotesco would still be liable because the trial court declared it to be guilty of gross
ISSUES & ARGUMENTS negligence. As gleaned from Bouvier’s definition, for one to be exempt from any
• W/N the cause of the collapse of the balcony ceiling was force majeure liability because of it, he must have exercised care, i.e., he should not have been
guilty of negligence.
COLLAPSE OF THE BALCONY CEILING NOT DUE TO FORCE

MAJEURE. GOTESCO LIABLE.
• Gotesco’s claim that the collapse of the ceiling of the theater was due to force
majeure is not even founded on facts because its own witness, Mr. Ong, admitted
that he could not give any reason for the collapse. Having interposed it as a defense,
it had the burden to prove that the collapse was indeed caused by force majeure. It
could not have collapsed without a cause. That Mr. Ong could not offer any
explanation does not imply force majeure.
• Spanish and American authorities on the meaning of force majeure:
Inevitable accident or casualty; an accident produced by any physical cause which is

irresistible; such as lightning, tempest, perils of the sea, inundation, or earthquake;
the sudden illness or death of a person. [Blackstone]
The event which we could neither foresee nor resist; as, for example, the lightning
stroke, hail, inundation, hurricane, public enemy, attack by robbers; [Esriche]
Any accident due to natural causes, directly, exclusively, without human

intervention, such as could not have been prevented by any kind of oversight, pains,
and care reasonably to have been expected. [Bouvier] CHRISSIE MORAL
Page 237 of 528

217 Juan F. Nakpil & Sons vs. CA| Quisumbing edifice fags within the same period on account of defects in the construction or the use
G.R. No. L-47851, October 3, 1986 | 144 SCRA 596 of materials of inferior quality furnished by him, or due to any violation of the terms of
the contract. If the engineer or architect supervises the construction, he shall be solidarily
FACTS liable with the contractor.
• Plaintiff, Philippine Bar Assoc decided to construct an office building in Intramuros.
• The construction was undertaken by the United Construction, Inc on an Acceptance of the building, after completion, does not imply waiver of any of the
administration basis. The plans and specifications were prepared by 3rd-party causes of action by reason of any defect mentioned in the preceding paragraph.
defendants Juan Nakpil & Sons. The building was completed in June 1966. The action must be brought within ten years following the collapse of the building.
• In the early morning of August 2, 1968, an usually strong earthquake hit Manila. The
building sustained major damages. The front columns of the building buckled, • On the other hand, the general rule is that no person shall be responsible for events
causing the bldg to tilt forward dangerously. which could not be foreseen or which though foreseen, were inevitable (Article
• The tenants vacated the bldg and United Construction shored up the bldg at its 1174, New Civil Code).
expense as a temporary remedial measure. • An act of God has been defined as an accident, due directly and exclusively to
• On Nov 29, 1968, plaintiff commenced this action for the recovery of damages natural causes without human intervention, which by no amount of foresight, pains
arising from the partial collapse of the bldg against United Construction and its or care, reasonably to have been expected, could have been prevented.
President as defendants. Defendants filed a 3rd-party complaint against the architects • There is no dispute that the earthquake of August 2, 1968 is a fortuitous event or an
who prepared the plans and specifications. act of God.
• The parties referred the technical issues to a Commissioner who submitted a report • To exempt the obligor from liability under Article 1174 of the Civil Code, for a
finding that while the damage sustained by the PBA bldg was caused directly by the breach of an obligation due to an "act of God," the following must concur: (a) the
earthquake whose magnitude was 7.3, they were also caused by the defects in the cause of the breach of the obligation must be independent of the will of the debtor;
plans & specs prepared by the architects, deviations from the plans by the (b) the event must be either unforseeable or unavoidable; (c) the event must be such
contractors and failure of the latter to observe the requisite workmanship in the as to render it impossible for the debtor to fulfill his obligation in a normal manner;
construction of the bldg and of the contractors, architects and even the owners to and (d) the debtor must be free from any participation in, or aggravation of the
exercise the requisite degree of supervision in the construction of subject bldg. injury to the creditor.
• The Trial Court agreed w/ the findings of the Commissioner. • The principle embodied in the act of God doctrine strictly requires that the act must
• The amicus curiae gave the opinion that the plans&specs of the Nakpils were not be one occasioned exclusively by the violence of nature and all human agencies are
defective. to be excluded from creating or entering into the cause of the mischief. When the
• United Construction and the Nakpils claimed that it was an act of God that caused effect, the cause of which is to be considered, is found to be in part the result of the
the failure of the bldg which should exempt them from responsibility and not the participation of man, whether it be from active intervention or neglect, or failure to
defective construction, poor workmanship, deviations from plans&specs. act, the whole occurrence is thereby humanized, as it were, and removed from the
rules applicable to the acts of God.
ISSUES & ARGUMENTS • Thus, if upon the happening of a fortuitous event or an act of God, there concurs a
W/N an act of God—an unusually strong earthquake—which caused the failure corresponding fraud, negligence, delay or violation or contravention in any manner
of the bldg, exempts the parties who are otherwise liable because of their of the tenor of the obligation as provided for in Article 1170 of the Civil Code,
negligence from liability? which results in loss or damage, the obligor cannot escape liability.
• The negligence of the defendant and the third-party defendants petitioners was
HOLDING & RATIO DECIDENDI established beyond dispute both in the lower court and in the Intermediate
Appellate Court. Defendant United Construction Co., Inc. was found to have made
• The applicable law governing the rights and liabilities of the parties herein is Article substantial deviations from the plans and specifications. and to have failed to
1723 of the New Civil Code, which provides: observe the requisite workmanship in the construction as well as to exercise the
requisite degree of supervision; while the third-party defendants were found to have
Art. 1723. The engineer or architect who drew up the plans and specifications for a inadequacies or defects in the plans and specifications prepared by them. As
building is liable for damages if within fifteen years from the completion of the structure correctly assessed by both courts, the defects in the construction and in the plans
the same should collapse by reason of a defect in those plans and specifications, or due and specifications were the proximate causes that rendered the PBA building unable
to the defects in the ground. The contractor is likewise responsible for the damage if the
Page 238 of 528
to withstand the earthquake of August 2, 1968. For this reason the defendant and
third-party defendants cannot claim exemption from liability.
• In any event, the relevant and logical observations of the trial court as affirmed by
the Court of Appeals that "while it is not possible to state with certainty that the
building would not have collapsed were those defects not present, the fact remains
that several buildings in the same area withstood the earthquake to which the
building of the plaintiff was similarly subjected," cannot be ignored.
PAT FERNANDEZ
Page 239 of 528

218 Juan F. Nakpil, et al. vs. CA|Paras and modifies, hence this MR by UCCI as the earlier MR of NAKPIL has already
G.R. No. L-47851, April 15, 1988 | been denied.
FACTS ISSUES & ARGUMENTS

• Philippine Bar Association (PBA) decided to construct an office building corner of • W/N UCCI is liable for damages for the collapse of the PBA building?
Aduana and Arzobispo Streets, Intramuros, Manila. o UCCI:
• For the plans, specifications and design, PBA contracted the services of third-party  collapse means disintegrate, and the bldg didn’t
defendants-appellants Juan F. Nakpil & Sons and Juan F. Nakpil (NAKPILS for  PBA was in active supervision it was held that such wanton negligence
short). of both the defendant and the third-party defendants in effecting the
• For the construction of the building, PBA contracted the services of United plans, designs, specifications, and construction of the PBA building is
Construction Company, Inc. (UCCI) on an administration basis. The building was equivalent to bad faith in the performance of their respective tasks
completed in June 1966.  No bad faith on their part
• August 2, 1968: an unusually strong earthquake hit Manila and its environs and  5M damages are excessive
the building in question sustained major damage. The front columns of the
building buckled causing the building to tilt forward dangerously. As a temporary HOLDING & RATIO DECIDENDI
remedial measure, the building was shored up (temporary support) by UCCI at the
expense of P13,661.28. There should be no question that the NAKPILS and UNITED are liable for the
• November 29, 1968: PBA commenced this action for recovery of damages damages.
against UCCI and its President and General Manager Juan J. Carlos, claiming that
the collapse of the building was caused by defects in the construction. UCCI, in • It’s true, as found by TC and CA, that the Aug 2 earthquake lead to partial collapse,
turn, filed a third-party complaint against the NAKPILS, alleging in essence that but the subsequent earthquakes aggravated the damages leading to the need to
the collapse of the building was due to the defects in the architects" plans, demolish and the proximate cause was the defect in specs and construction
specifications and design.
• At the pre-trial, the parties agreed to refer the technical issues in the case to a Citing the case of Tucker v. Milan (49 O.G. 4379, 4380) as the case in point, the
commissioner. Andres O. Hizon, a lawyer and structural engineer, was appointed by pertinent portion of the decision reads: “ One who negligently creates a dangerous
the Court as commissioner. condition cannot escape liability for the natural and probable consequences thereof,
• PBA moved twice for the demolition of the building on the ground that it might although the act of a third person, or an act of God for which he is not responsible,
topple down in case of a strong earthquake. The motions were opposed by the intervenes to precipitate the loss.”
defendants and the matter was referred to the Commissioner. • On supervision: the fact was, it was on the suggestion of Juan F. Nakpil, that the
• April 30, 1979: the building was authorized to be demolished at the expense of construction was undertaken on an administration basis.
PBA, but not before another earthquake of high intensity on April 7, 1970 • On Bad faith: TC and CA factually found that such wanton negligence of both
followed by other strong earthquakes on April 9 and 12, 1970, caused further NAKPIL and UCCI in effecting the plans, designs, specifications, and construction
damage to the property. The actual demolition was undertaken by the buyer of the of the PBA building is equivalent to bad faith in the performance of their respective
damaged buiding. tasks.
• The Commissioner eventually submitted his report with the findings that while the • On 5M: decision was rendered 20 years later, and under the present cost of
damage sustained by the PBA building was caused directly by the August 2, construction, such amount is a conservative estimate; atty’s fees and indemnity for
1968 earthquake, they were also caused by: income loss were also reasonable.
o the defects in the plans and specifications prepared by the NAKPILS; • Note though that the 12 % interest was deleted since the collection suit was not
o UNITED"s deviations from said plans and specifications and its failure to from a loan or a forbearance.
observe the requisite workmanship in the construction of the building;
o and failure of PBA to exercise the requisite degree of supervision in the Petition denied.
construction of the building.
• TC agreed with Commissione: UCCI liable (but not its President Ozaeta); CA:
modified awarding damages to PBA, split cost to UCCI and NAKPIL. SC affirms DIANE LIPANA
Page 240 of 528

219 Gelisan vs. Alday | Padilla • Gelisan, is not however without recourse. He has the right to be indemnified by
G.R. No. L-30212, September 30, 1987 | 154 SCRA 388 Eespiritu for the amount he may be required to pay as damages for the injury caused
to Alday, since the lease contract is binding between the contracting parties.
FACTS • There is also no merit in Gelisan’s contention that his liability is only subsidiary. The
• Gelisan is the owner of a freight truck. He and Espiritu entered into a lease contract Court has consistently held that the registered owner/operator of a public service
under which Espiritu hired the freight truck to haul rice, sugar, flour and fertilizer vehicle to be jointly and severally liable with the driver for damages incurred by
within the City of Manila for P18.00 per trip, provided that the load would not passengers or third persons as a consequence of injuries sustained in the operation
exceed 200 sacks. Moreover, the contract provided that Espiritu shall bear all losses of said vehicles.
and damages attending the carriage of goods.
• Petitioner Alday, a trucking operator who had known Espiritu as a truck operator Petition DENIED.
had a contract to haul the fertilizers of Atlas Fertilizer Corporation. Espiritu offered
the use of the freight truck he rented from Gelisan at 9 centavos per bag of
fertilizer, which offer Alday accepted.
• Espiritu, however, failed to deliver the fertilizers to Atlas, as evidenced by the
signatures in the way bill receipts which were not of any of the representatives or
employees of Atlas. Since he could not be found, Alday reported the loss to the
Manila Police Department, and Espiritu was later arrested and booked for theft.
• Subsequently, the freight truck of Gelisan was impounded by the police. When
Gelisan tried to retrieve the truck, however, he could not produce the registration
papers. Hence, he was made to pay a premium of P300 to the surety company.
• Meanwhile, Alday was compelled to pay for the 400 bags of fertilizer to Atlas Corp.
Because of this, he filed a complaint against Espiritu and Gelisan. Espiritu was
declared in default. Meanwhile, Gelisan denied responsibility, claiming that he had
no contractual relations with Alday with regard to the fertilizers, and that the
hauling/delivery and alleged misappropriation by Espiritu was entirely beyond his
knowledge and control. Moreover, he invoked the provision in his contract with
Espiritu which stated that the latter would be liable for all losses and damages in
relation to the carriage of goods.
• CFI ruled the Espiritu alone was liable, since Gelisan was not privy to his contract
with Alday. However, the CA held that Gelisan was likewise liable for being the
registered owner of the truck. Hence this petition.
ISSUES & ARGUMENTS

• W/N Gelisan is jointly and severally liable with Espiritu.
GELISAN JOINTLY AND SEVERALLY LIABLE WITH ESPIRITU.

• The registered owner of a public service vehicle is responsible for damages that may
arise from consequences incident to its operation or that may be caused to any of
the passengers therein.
• The claim of Gelisan that he cannot be liable in view of the lease contract cannot be
sustained because it had not been approved by the Public Service Commission. As
such, it cannot be binding upon the public and third persons.
CHRISSIE MORAL
Page 241 of 528

220 Cruz vs. vs. NLRC | Paras HOLDING & RATIO DECIDENDI
G.R. No. 98273 October 28, 1991 |
Yes
FACTS • Not all waivers and quitclaims are invalid as against public policy. If the agreement
• Clarita V. Cruz went abroad pursuant to an employment contract that she hoped was voluntarily entered into and represents a reasonable settlement, it is binding on
would improve her future. Although a high school graduate, she agreed to work as a the parties and may not later be disowned simply because of a change of mind. It is
domestic helper in Kuwait only where there is clear proof that the waiver was wangled (engineered) from an unsuspecting or
• After her two-year contract, she came back highly aggrieved and filed a complaint gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to
against EMS Manpower and Placement Services (Phil.) and its foreign principal, for annul the questionable transaction.
underpayment of her salary and non-payment of her vacation leave. • The Court is convinced that the petitioner was not fully aware of the import and
• She alleged that her foreign employer treated her as a slave and required her to work consequences of the Affidavit of Desistance when she executed it, allegedly with the
18 hours a day. She was beaten up and suffered facial deformity, head trauma and assistance of counsel.
decreased sensation in the right portion of her body and was paid only $120 per • Private respondent agency still had privity of contract with the petitioner, court has
month and her total salaries were given to her only three hours before her flight held in a long line of cases that the local recruiter is solidarily liable with the foreign
back to Manila. principal for all damages sustained by the overseas worker in connection with his
• This was after the plane she was supposed to take had left and she had to stay in the contract of employment.
airport for 24 hours before her employer finally heard her pleas and delivered her • Such liability is provided for in Section 1, Rule II, Book II, of the POEA Rules and
passport and ticket to her. Regulations, which we have consistently sustained.
• In its answer and position paper, the private respondent raised the principal defense • This decision demonstrates once again the tenderness of the Court toward the
of settlement as evidenced by an Affidavit of Desistance, by virtue of which, POEA worker subjected to the lawless exploitation and impositions of his employer. The
dismissed her claim, and such was upheld by NLRC protection of our overseas workers is especially necessary because of the
• Petitioner faults the POEA and the NLRC with grave abuse of discretion for having inconveniences and even risks they have to undergo in their quest for a better life in
upheld the Affidavit of Desistance. a foreign land away from their loved ones and their own government.
• Cruz rejects the settlement as having been obtained from her under duress and false • The domestic helper is particularly susceptible to abuse because she usually works
pretenses only by herself in a private household unlike other workers employed in an open
• Her contention is that she was inveigled into signing the Affidavit of Desistance business concern who are able to share and discuss their problems and bear or solve
without the assistance of counsel. The "Attorney" Alvarado who assisted her was them together.
not really a lawyer but only a helper in the Overseas Workers Welfare
Administration. Atty. Biolena, on the other hand, merely acknowledged the
document.
• Moreover, when she signed the affidavit, she was under the impression when she
was agreeing to settle only her claim for one month unpaid vacation leave, as the
wording of the receipt she issued on the same date showed, to wit: private
respondent argues that the petitioner is bound by her Affidavit of Desistance
ISSUES & ARGUMENTS

• W/N petitioner can still collect from her agency despite of the affidavit of
desistance.
MAGIC MOVIDO
Page 242 of 528
221 Singapore Airlines Limited vs. CA | Romero o The responsibility of two or more persons, or tort-feasors, liable for a
G.R. No. 107356, March 31, 1995 | 243 SCRA 143 quasi-delict is joint and several, and the sharing as between such solidary
debtors is pro-rata
FACTS o It is but logica, fair, and equitable to require PAL to contribute to the
• Sancho Rayos was an overseas contract worker who had a renewed contract with amount awarded to the Rayos spouses and already paid by SIA, instead of
the Arabian American Oil Company (Aramco). totally indemnifying the latter
• His employment contract allowed claim for reimbursement for amounts paid for • Procedural doctrines:
excesss baggage of up to 50 Kg, as long as it is properly supported by receipt o A third-party defendant is allowed to set up in his answer the defenses with
• On April 13, 1980, Rayos took a Singapore Airlines flight to report for his new the third-party plaintiff (original defendant) has or may have to the
assignment, with a 50 Kg excess baggage for which he paid P4,147.50 plaintiff’s claim
• Aramco reimbursed said amount upon presentation of the excess baggage tickeht  There are, however, special circumstances present in this case
• In December 1980, Rayos learned that he was one of several employees being which preclude third-party defendant PAL from benefitting from
investigated by Aramco for fraudulent claims the said principle
• He asked his wife Beatriz to seek a written confirmation from SIA that he indeed o A third-party complaint involves an action separate and distinct from,
paid for an excess baggage of 50 Kg although related to, the main complaint
• SIA notified Beatriz of their inability to issue the certification requested because o A third-party defendant who feels aggrieved by some allegations in the
their records showed that only 3 Kg were entered as excess and accordingly charged main complaint should, aside from answering the third-party complaint,
• Beatriz, with the help of a lawyer, threatened SIA with a lawsuit to compel the latter also answer the main complaint
to issue the certification requested
• On April 14, 1981, Aramco gave Rayos his travel documents without a return visa.
(His employment contract was not renewed)
• Hence, Rayos sued SIA for damages, claiming it was responsible for the non-
renewal of Rayos’ employment contract with Aramco
• SIA filed a third-party complaint against PAL for reimbursement
• The court ruled in favor of plaintiff and ordered SIA to pay Rayos, and PAL to
reimburse SIA
o PAL’s initial defense was a disclaimer of liability. It alleged that it was SIA
who was liable for the tampering
o On appeal, PAL had a turnaround and used as defense that Rayos has no
cause of action against PAL since the non-renewal was brought about by
his own inefficiency and not the tampering of the excess baggage ticket
ISSUES & ARGUMENTS

• W/N PAL should be held liable for contribution or reimbursement to SIA of
the damages paid to Rayos
YES.
• The non-renewal of Rayos’ employment contract was the natural and probable
consequence of the separate tortrious acts of SIA and PAL
• Under Art. 2176 of the NCC, Rayo is entitled to be compensated for such damages
o In an action upon a tort, defendant may file a third-party complaint against
a joint tort-feasor for contribution
CEO OCAMPO
Page 243 of 528
222 De Guzman vs. NLRC |
G.R. No. 90856 Feb 1, 1996 |
FACTS
• De Guzman was the general manager of the Manila Office of Affiliated Machineries
Agency, Ltd. (AMAL). He was impleaded for allegedly selling part of AMAL’s assets
and applying the proceeds of the same, as well as the remaining assets, to satisfy his
own claims against the company.
• The NLRC ruled against petitioner granting award of damages and the order to
return the assets of AMAL which he appropriated for being unwarranted. He assails
the decision arguing that the same were beyond the jurisdiction of this Court to
grant in a complaint for illegal dismissal in the absence of an employer-employee
relationship between petitioner and respondent employees.
ISSUES & ARGUMENTS

• W/N DE Guzman is liable for damages.
Yes.
• In labor disputes, an EER is not essential. It is enough that there be a showing of a

reasonable causal connection between the claim asserted and the employer-
employee relations.
• On this score, it is evident that petitioner’s acts of bad faith were offshoots of the
termination of their employment relations with AMAL. The company’s decision to
close down its business impelled petitioner to act precipitately in appropriating the
assets of AMAL, fearing perhaps that the same might not be enough to satisfy all
the legitimate claims against it. Even if the petitioner had a legitimate claim with the
corporation, his acts were in contravention of the law on preference of credits. The
laborers claims may have been paid off had it not been for the acts of petitioner.
JAN PORTER
Page 244 of 528

223 GSIS v. CA | Quisumbing
G.R. No. 101439 June 21, 1999| 308 SCRA 559
FACTS
• At around 7 PM, in Tabon-Tabon, Butuan City, a Chevrolet Truck, owned by NFA,
driven by Guillermo Corbeta collided with a Toyota Tamaraw, a public utility
vehicle, owned by Victory Line.
• As a result of the collision, the truck crossed over to the other lane, and fell into the
ravine
• It was found out that the Truck was occupying the lane of the Tamaraw at the time
of the collision and it was concluded by the RTC that if both vehicles had traveled
in their respective lanes. He incident would not have happened
• 5 died from the accident, 10 were injured.
• 3 sets of heirs filed a case with the RTC for damages against NFA as owner of the
Truck ,and GSIS as the insurer of NFA’s motor vehicles
• RTC held NFA and GSIS solidarily liable for P109K
• GSIS rejects the decision since, according to the insurance contract, their maximum
liability in case of death in a motor vehicle accident is only P12K per victim.
ISSUES & ARGUMENTS

• W/N NFA and GSIS are solidarily liable.
o Petitioner: GSIS denies solidary liability because their liability ariss from
different causes of action. GSIS is liable under an insurance contract, while
NFA is liable under the laws of quasi-delict.
NO GSIS IS NOT SOLIDARILY LIABLE.
• The victims may proceed directly against the insurer for the indemnity, the third
party liability is only up to the extent of the insurance policy and those required by
law
• The direct liability of the insurer under indemnity contracts against third party
liability does not mean that the insurer can be held liable in solidum with the insured
and/or the other parties found at fault.
• For the liability of the insurer is based on contract; that of the insured carrier or
vehicle owner is based on tort.
• The liability of GSIS based on insurance contract is direct, NOT SOLIDARY with
that of NFA.
• The insurer could only be held liable up to the extent if what was provided for in the
insurance contracts, therefore GSIS is only liable for P12K per victim (3 sets of
heirs at P12K each, plus insurance for those who were injured)
CHESKA RESPICIO
Page 245 of 528

224 Basilio vs. Bersamira | Quisumbing • Also, counsel for private respondent filed and duly served on December 3, 1991,
March 17, 2000 | and December 9, 1991, respectively, a manifestation praying for the grant of the
motion for execution. However, counsel for petitioner did not appear.
FACTS • Given the foregoing, the Court did not agree with petitioner that the trial court
• Pronebo was a driver of a dump truck owned and registered in the name of denied him due process of law. Neither can the respondent appellant court be
petitioner Basilio. faulted for sustaining the judgment and orders of the trial court.
• The former was found guilty of reckless imprudence, who then filed for an
application for probation, so the judgment of the trial court finding Pronebo guilty Petition dismissed.
of the crime became final and executory.
• Private respondents aggrieved by the incident filed for a motion for execution of the
subsidiary civil liability of petitioner, and the trial court directed such issuance of
writ of execution.
• Petitioner filed with the CA a petition for certiorari, which was denied, as well as an
MR which suffered the same fate.
• Hence this case, alleging that the CA committed grave abuse of discretion (GAD),
when he was not afforded due process when he was found subsidiarily liable for the
civil liability of the accused Pronebo in the criminal case.
ISSUES & ARGUMENTS

• W/N CA committed GAD.
CA not guilty of GAD.
• Petitioner asserted that he was not given opportunity to be held by the RTC to
prove the absence of employer-employee relationship (EER) between him and the
driver-accused.
• There are two instances when the existence of an EER of an accused driver and the
alleged vehicle owner may be determined. One during the criminal proceeding, and
the other, during the proceeding for the execution of the judgment. In both
instances, the owner should be given the opportunity to be heard, which is the
essence of due process.
• In the case at bar, petitioner herein knew that the criminal case was filed against the
accused since petitioner's truck was involved in the incident. Petitioner did not
intervene in the criminal proceedings, despite knowledge, through counsel,
that the prosecution adduced evidence to show employer-employee relationship. He
had all his chances to intervene in the criminal proceedings, and prove that he was
not the employer of the accused, but he chooses not to intervene at the appropriate
time.
• Petitioner was also given the opportunity during the proceedings for the
enforcement of judgment. He was asked by the trial court to make an opposition
thereto, which he did, and where he properly alleged that there was no EER
between him and accused. J.R. RUIZ
Page 246 of 528

225 Velayo, etc. vs Shell Co., of the Philippines, et al. | Felix, J. ISSUES & ARGUMENTS
G.R. No. L-7817, October 31, 1956 | 100 PHIL 186 • W/N the defendant acted in bad faith and btrayed the trust and confidence
of the other creditors of CALI.
FACTS • W/N by reason of the betrayal,, defendant may be made to answer for the
• Commercial Air Lines (CALI) was supplied by Shell Co. of the Philippines Islands damages prayed for by the plaintiff.
(defendant) ever since it started its operations
• As per the books of the defendant, it had reasons to believe that the financial HOLDING & RATIO DECIDENDI
condition of CALI was far from being satisfactory. • Moreover, we might say that DEFENDANT could not have accomplished the
• The management of CALI informally convened its principal creditors on August 6, transfer of its credit to its sister corporation if all the shell companies throughout the
1948, and informed them that CALI was in a state of insolvency and had to stop wworld would not have a sort of union, relation or understanding among
operations. themselves to come to the aid of each other. The telegraphic transfer made without
• The creditors present agreed to the formation of a working committee to continue the knowledge and at the back of the other creditors of CALI may be a shrewd and
the discussion of the payment of claims and preferences alleged by certain creditors, surprise move that enabled the DEFENDANT to collect almost allif not the entire
and it was further agreed that said working committee would supervise the amount of its credit, but the Court of Justice cannot countenance cuch attitude at
preservation of the properties of the corporation while the creditors attempted to all, and much less a foreign corporation to the detriment of our Government and
come to an under standing as a fair distribution of the assets among them. local business.
• To this committee, Mr. Fitzgerald the credit manager of the defendant, Mr. Agcaoili • Chapter 2 of the preliminary title of the civil code on human relations,
of the National airports corporation and Atty Alexander Sycip were appointed. proveides the following;
• It was agreed upon that the creditors would not file suit to achieve a fair pro-rata Article 19. Every person must, in the exercise of his rights and in the
distribution, although CALI announced that in the event of non-agreement, it was performance of his duties, act with justice, give everyone his due, and observe
to file for insolvency proceedings. honesty and good faith.
• However, on the very day of the meeting of the working committee, which Mr. • It maybe said that this article only contains a mere declaration of principles and
Fitzgerald attended, the defendant effected a telegraphic transfer of its credit against while such statement is essentially correct, yet We find that such declaration is
CALI to the American corporation Shell Oil Company, Inc., assigning its credit, implemented by Article 21and the sequence of the same chapter, which
which was subsequently followed by a deed of assignment of credit dated August 10, prescribe the following:
1948. Article 21. Any person who wilfully causes loss or injury to another in manner
• The American corporation then sued CALI in the superior court of californinia, that is contrary to morals, good customs or public policy shall compensate the
USA for the amount of the credit thus assigned. And a writ of attachment was latter for the damage.
issued against a C-54 PLANE in Ontario International Airport. And on January 5,
1949, a judgment by default had been issued by the American court against CALI.
• The stockholders of CALI were unaware of this.
• When the suit in the american court was found out, on the first weeks of September
1948, CALI immediately file for voluntary insolvency and the court issued the order
of insolvency accordingly on the same day. The court appointed Mr. Velayo as
Assignee.
• On December 17, 1948, Velayo filed for a writ of injuction to stop the foreign court
from prosecuting the claim, and in the alternative, he prayed for damages in double
the amount of the plane which was attached.
• The plaintiff having failed to restrain the progress of the attachment suit in the US
by denial of the application of the writ of injuction and the consequences on
execution of the C-54 plane in the state of California, USA, he confines his action to
the recovery of damages against the defendant.
• The complaint was dismissed, hence this petition.
JAY DUHAYLONGSOD
Page 247 of 528
226 Filinvest Credit Corporation v. Court of Appeals | Davide, Jr. • In common usage, good faith is ordinarily used to describe that state of mind denoting
G.R. No. 115902 September 27, 1995| 248 SCRA 549 honesty of purpose, freedom from intention to defraud, and, generally speaking,
means being faithful to one's duty or obligation. It consists of the honest intention
FACTS to abstain from taking an unconscionable and unscrupulous advantage of another.
• Private Respondents Spouses Tadiaman bought a truck from Jordan Enterprises in • The petitioner's acts clearly fall within the contemplation of Articles 19 and 21 of
installments. Respondents issued a PN worth P196,680.00 payable in 24 months in the Civil Code. The acts of fraudulently taking the truck, hiding it from the private
favor of Jordan Enterprises and executed a chattel mortgage over the truck to secure respondents, and removing its spare parts show nothing but a willful intention to
the payment of the PN. Jordan then assigned their rights and interests over the cause loss to the private respondents that is punctuated with bad faith and is
instruments to Filinvest Finance and Leasing Corp., which in turn assigned the same obviously contrary to good customs. Thus, the private respondents are entitled to
to petitioner corporation. the moral damages they prayed for, for under Article 2219 of the Civil Code, moral
• When respondents defaulted, petitioner filed an action for replevin and damages damages may be recovered in cases involving acts referred to in Article 21 of the
against them. Upon the issuance of a writ of replevin, the truck was seized not by same Code.
the sheriff, but by employees of petitioner misrepresenting themselves as special
sheriffs of the court.
• The respondents filed a counterbond for the return of the truck, but this was not
immediately implemented because the respondents were met with delaying tactics of
the petitioner, and when they finally recovered the truck, they found the same to be
"cannibalized". This is the reason why respondents filed a (counter)claim for
damages against petitioner.
• As regards the counterclaim, the RTC ruled in favor of respondents. CA affirmed.
ISSUES & ARGUMENTS

• W/N petitioner is liable for damages to respondents.
YES, PETITITIONER IS LIABLE.
• Court of Appeals correctly ruled that Filinvest is liable for damages not because it
commenced an action for replevin to recover possession of the truck prior to its
foreclosure, but because of the manner it carried out the seizure of the vehicle. It was
not the sheriff or any other proper officer of the trial court who implemented the
writ of replevin. Because it was aware that no other person can implement the writ,
Filinvest asked the trial court to appoint a special sheriff. Yet, it used its own
employees who misrepresented themselves as deputy sheriffs to seize the truck
without having been authorized by the court to do so.
• Upon the default by the mortgagor in his obligations, Filinvest, as a mortgagee, had
the right to the possession of the property mortgaged preparatory to its sale in a
public auction. However, for employing subterfuge in seizing the truck by
misrepresenting its employees as deputy sheriffs and then hiding and cannibalizing
it, Filinvest committed bad faith in violation of Article 19 of the Civil Code which
provides: Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good
faith.
JOHN FADRIGO
Page 248 of 528

227 De Guzman vs. NLRC | Bengzon claim for relief should directly result from an employer-employee relationship. It
G.R. No. 90856, February 1, 1996|253 SCRA 46 suffices that there be a showing of a reasonable causal connection between the claim
asserted and the employer-employee relations
FACTS • Respondent employees could have been afforded relief in their suit for illegal
• Petitioner was the general manager of the Manila Office of Affiliated Machineries dismissal and non-payment of statutory benefits were it not for petitioner's
Agency, Ltd. (AMAL) and one of the respondents in a complaint for illegal dismissal unscrupulous acts of appropriating for himself the assets of AMAL which rendered
and non-payment of statutory benefits filed by the respondents who were former the satisfaction of respondent employees' claims impossible. By taking undue
employees of AMAL advantage of his position as general manager of AMAL, petitioner was able to
• The employees initiated the complaint following AMAL's refusal to pay their facilitate the consummation of his acts as he had access over the company's assets
monetary claims after AMAL decided to cease its operations in 1986 • On this score, it is evident that petitioner's acts of bad faith were offshoots of the
• De Guzman was impleaded for allegedly selling part of AMAL's assets and applying termination of their employment relations with AMAL. The company's decision to
the proceeds of the same, as well as the remaining assets, to satisfy his own claims close down its business impelled petitioner to act precipitately in appropriating the
against the company and formed a new company named Susarco, Inc., which is assets of AMAL, fearing perhaps that the same might not be enough to satisfy all
engaged in the same line of business with the former clients of AMAL the legitimate claims against it.
• The Labor Arbiter rendered judgment and held De Guzman jointly and severally • Petitioner's contention that his application of AMAL's assets to satisfy his own
liable with AMAL for respondent employees' claims claims against the company is nothing more than a simple legal compensation or
• Upon appeal to the National Labor Relations Commission, the decision was set-off deserves scant consideration as it was done without deference to the
affirmed in toto legitimate claims of respondent employees and other creditors of AMAL, in
• Not satisfied, De Guzman proceeded to this Court on certiorari assailing the contravention of the provisions on concurrence and preference of credits under the
aforementioned decision and claiming grave abuse of discretion Civil Code. Although his legitimate claims are not disputed, the same, however, are
• The SC modified the decision of the NLRC and absolved De Guzman from his properly cognizable at the proceedings for AMAL's dissolution.
solidary liability for respondent employees' claims based on a finding that as mere • Thus, we affirm our previous conclusion that although the question of damages
managerial employee, he had no participation in the decision to cease operations and arising from petitioner's bad faith has not directly sprung from the illegal dismissal,
terminate the services of respondent employees which was the exclusive it is clearly intertwined therewith. Accordingly, petitioner's bad faith having been
responsibility of AMAL alone. Nevertheless, for having acted in bad faith by sufficiently established, the award of damages against him and the order for him to
appropriating the assets of AMAL to satisfy his own claims to the prejudice of return the assets of AMAL which he appropriated, or their value, are in order
respondent employees' pending claims, petitioner was held directly liable for moral
and exemplary damages based on the provisions of Articles 19, 21, 2219(10) and The motion for reconsideration is hereby DENIED for lack of merit. The denial is final.
2229 of the Civil Code
• Hence, this MR assailing the award of damages and the order to return the assets of
AMAL which he appropriated for being unwarranted, arguing that the same were
beyond the jurisdiction of this Court to grant in a complaint for illegal dismissal in
the absence of an employer-employee relationship between petitioner and
respondent employees
ISSUES & ARGUMENTS

• W/N De Guzman may be held liable for damages.
DE GUZMAN LIABLE TO PAY DAMAGES.
• While it is conceded that no employer-employee ties existed between the petitioner

and respondent employees, this does not preclude this Court from adjudging him
liable for damages. In labor disputes like the instant suit, it is not required that the KATH MATIBAG
Page 249 of 528

228 UE Vs. Jader from the latter's negligence. He prayed for an award of moral and exemplary
damages, unrealized income, attorney's fees, and costs of suit.
FACTS
• Plaintiff was enrolled in the defendants' College of Law from 1984 up to 1988. In
the first semester of his last year (School year 1987-1988), he failed to take the ISSUES & ARGUMENTS
regular final examination in Practice Court I for which he was given an incomplete • W/N UE liable for damages
grade o Jader: UE misled me through their negligence.
• He enrolled for the second semester as fourth year law student in UE and on o UE: We never misled you. We have good faith.
February 1, 1988 he filed an application for the removal of the incomplete grade
given him by Professor Ortega which was approved by Dean Tiongson after HOLDING & RATIO DECIDENDI
payment of the required fee. He took the examination on March 28, 1988.
• On May 30, 1988, Professor Ortega submitted his grade. It was a grade of five YES, UE liable for damages.
(5), a failing grade.
• In the meantime, the Dean and the Faculty Members of the College of Law met to • When a student is enrolled in any educational or learning institution, a contract
deliberate on who among the fourth year students should be allowed to graduate. of education is entered into between said institution and the student. The
The plaintiff's name appeared in the Tentative List of Candidates for graduation for professors, teachers or instructors hired by the school are considered merely as
the Degree of Bachelor of Laws (LL.B) as of Second Semester (1987-1988) with the agents and administrators tasked to perform the school's commitment under
following annotation: the contract.
JADER ROMEO A. • Petitioner, in belatedly informing respondent of the result of the removal
Def. Conflict of Laws — x-1-87-88, Practice Court I Inc., 1-87-88 C-1 to examination, particularly at a time when he had already commenced preparing
submit transcript with S.O. for the bar exams, cannot be said to have acted in good faith.
• The name of the plaintiff appeared as one of the candidates for graduation. • Absence of good faith must be sufficiently established for a successful
• At the foot of the list of the names of the candidates there appeared however the prosecution by the aggrieved party in a suit for abuse of right under Article 19
following annotation: of the Civil Code.
• Good faith connotes an honest intention to abstain from taking undue
This is a tentative list Degrees will be conferred upon these candidates who advantage of another, even though the forms and technicalities of the law,
satisfactorily complete requirements as stated in the University together with the absence of all information or belief of facts, would render the
Bulletin and as approved of the Department of Education, Culture and transaction unconscientious.
Sports • It is the school that has access to those information and it is only the school
that can compel its professors to act and comply with its rules, regulations and
• The plaintiff attended the grad ceremonies on 16th of April 1988 and during the policies with respect to the computation and the prompt submission of grades.
program of which he went up the stage when his name was called, escorted by her Students do not exercise control, much less influence, over the way an
(sic) mother and his eldest brother who assisted in placing the Hood, and his Tassel educational institution should run its affairs, particularly in disciplining its
was turned from left to right, and he was thereafter handed by Dean Celedonio a professors and teachers and ensuring their compliance with the school's rules
rolled white sheet of paper symbolical of the Law Diploma. His relatives took and orders. Being the party that hired them, it is the school that exercises
pictures of the occasion. He tendered a blow-out that evening which was attended general supervision and exclusive control over the professors with respect to
by neighbors, friends and relatives who wished him good luck in the forthcoming the submission of reports involving the students' standing.
bar examination. There were pictures taken too during the blow-out • The college dean is the senior officer responsible for the operation of an
• He thereafter prepared himself for the bar examination. He took a leave of absence academic program, enforcement of rules and regulations, and the supervision of
without pay from his job from April 20, 1988 to September 30, 1988 and enrolled at faculty and student services. He must see to it that his own professors and
the pre-bar review class in Far Eastern University. Having learned of the deficiency teachers, regardless of their status or position outside of the university, must
he dropped his review class and was not able to take the bar examination. comply with the rules set by the latter. The negligent act of a professor who
• Respondent sued petitioner for damages alleging that he suffered moral shock, fails to observe the rules of the school, for instance by not promptly submitting
mental anguish, serious anxiety, besmirched reputation, wounded feelings and a student's grade, is not only imputable to the professor but is an act of the
sleepless nights when he was not able to take the 1988 bar examinations arising school, being his employer.
Page 250 of 528
• Considering further, that the institution of learning involved herein is a appellee university, despite the knowledge that plaintiff-appellant failed
university which is engaged in legal education, it should have practiced what it in Practice Court I, again included plaintiff-appellant's name in the
inculcates in its students, more specifically the principle of good dealings "tentative list of candidates for graduation which was prepared after the
enshrined in Articles 19 and 20 of the Civil Code which states: deliberation and which became the basis for the commencement rites
program. Dean Tiongson reasons out that plaintiff-appellant's name was
Art. 19. Every person must, in the exercise of his rights and in the performance allowed to remain in the tentative list of candidates for graduation in the
of his duties, act with justice, give everyone his due, and observe honesty and hope that the latter would still be able to remedy the situation in the
good faith. remaining few days before graduation day. Dean Tiongson, however, did
Art. 20. Every person who, contrary to law, wilfully or negligently causes not explain how plaintiff appellant Jader could have done something to
damage to another, shall indemnify the latter for the same. complete his deficiency if defendant-appellee university did not exert any
effort to inform plaintiff-appellant of his failing grade in Practice Court I.
• Art. 19 was intended to expand the concept of torts by granting adequate legal
remedy for the untold number of moral wrongs which is impossible for human
foresight to provide specifically in statutory law.8 In civilized society, men must
be able to assume that others will do them no intended injury — that others
will commit no internal aggressions upon them; that their fellowmen, when
they act affirmatively will do so with due care which the ordinary understanding
and moral sense of the community exacts and that those with whom they deal
in the general course of society will act in good faith. The ultimate thing in the
theory of liability is justifiable reliance under conditions of civilized society.9
Schools and professors cannot just take students for granted and be indifferent
to them, for without the latter, the former are useless.
• Educational institutions are duty-bound to inform the students of their
academic status and not wait for the latter to inquire from the former. The
conscious indifference of a person to the rights or welfare of the
person/persons who may be affected by his act or omission can support a
claim for damages. Want of care to the conscious disregard of civil obligations
coupled with a conscious knowledge of the cause naturally calculated to
produce them would make the erring party liable.
• Petitioner ought to have known that time was of the essence in the
performance of its obligation to inform respondent of his grade. It cannot feign
ignorance that respondent will not prepare himself for the bar exams since that
is precisely the immediate concern after graduation of an LL.B. graduate. It
failed to act seasonably. Petitioner cannot just give out its student's grades at
any time because a student has to comply with certain deadlines set by the
Supreme Court on the submission of requirements for taking the bar.
Petitioner's liability arose from its failure to promptly inform respondent of the
result of an examination and in misleading the latter into believing that he had
satisfied all requirements for the course.
• It is apparent from the testimony of Dean Tiongson that defendant-
appellee University had been informed during the deliberation that the
professor in Practice Court I gave plaintiff-appellant a failing grade. Yet,
defendant-appellee still did not inform plaintiff-appellant of his failure to
complete the requirements for the degree nor did they remove his name
from the tentative list of candidates for graduation. Worse, defendant- FRANK TAMARGO
Page 251 of 528

229 Sea Commercial vs. CA | “cardinal law on human conduct” expressed in said article has given rise to certain
G.R. 122823 November 25, 1999 | rules, e.g. that where a person exercises his rights but does so arbitrarily or unjustly
or performs his duties in a manner that is not in keeping with honesty and good
FACTS faith, he opens himself to liability. The elements of an abuse of rights under Article
• SEACOM is a corporation engaged in the business of selling and distributing 19 are: (1) there is a legal right or duty; (2) which is exercised in bad faith; (3) for the
agricultural machinery, products and equipment. On September 20, 1966, sole intent of prejudicing or injuring another.
SEACOM and JII entered into a dealership agreement whereby SEACOM • Clearly, the bad faith of SEACOM was established. By appointing as a dealer of its
appointed JII as its exclusive dealer in the City and Province of Iloilo. Tirso agricultural equipment, SEACOM recognized the role and undertaking of JII to
Jamandre executed a suretyship agreement binding himself jointly and severally with promote and sell said equipment. Under the dealership agreement, JII was to act as
JII to pay for all obligations of JII to SEACOM. The agreement was subsequently a middleman to sell SEACOM’s products, in its area of operations, i.e. Iloilo and
amended to include Capiz in the territorial coverage and to make the dealership Capiz provinces, to the exclusion of other places, to send its men to Manila for
agreement on a non-exclusive basis. In the course of the business relationship training on repair, servicing and installation of the items to be handled by it, and to
arising from the dealership agreement, JII allegedly incurred a balance of P18,843.85 comply with other personnel and vehicle requirements intended for the benefit of
for unpaid deliveries, and SEACOM brought action to recover said amount plus the dealership After being informed of the demonstrations JII had conducted to
interest and attorney’s fees. promote the sales of SEACOM equipment, including the operations at JII’s expense
• JII filed an Answer denying the obligation and interposing a counterclaim for conducted for five months, and the approval of its facilities (service and parts) by
damages representing unrealized profits when JII sold to the Farm System FSDC, SEACOM participated in the bidding for the said equipment at a lower
Development Corporation (FSDC) twenty one (21) units of Mitsubishi power tillers. price, placing itself in direct competition with its own dealer. The actuations of
In the counterclaim, JII alleged that as a dealer in Capiz, JII contracted to sell in SEACOM are tainted by bad faith.
1977 twenty-four (24) units of Mitsubishi power tillers to a group of farmers to be • Even if the dealership agreement was amended to make it on a non-exclusive basis,
financed by said corporation, which fact JII allegedly made known to petitioner, but SEACOM may not exercise its right unjustly or in a manner that is not in keeping
the latter taking advantage of said information and in bad faith, went directly to with honesty or good faith; otherwise it opens itself to liability under the abuse of
FSDC and dealt with it and sold twenty one (21) units of said tractors, thereby right rule embodied in Article 19 of the Civil Code above-quoted. This provision,
depriving JII of unrealized profit of eighty-five thousand four hundred fifteen and together with the succeeding article on human relation, was intended to embody
61/100 pesos (P85,415.61). certain basic principles “that are to be observed for the rightful relationship between
human beings and for the stability of the social order.” What is sought to be written
ISSUES & ARGUMENTS into the law is the pervading principle of equity and justice above strict legalism.
• W/N SEACOM acted in bad faith when it competed with its own dealer as
regards the sale of farm machineries to FSDC

• "Art. 19. Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due and observe honesty and good
faith.”
• Article 19 was intended to expand the concept of torts by granting adequate legal
remedy for the untold number of moral wrongs which is impossible for human
foresight to provide specifically in statutory law. If mere fault or negligence in one’s
acts can make him liable for damages for injury caused thereby, with more reason
should abuse or bad faith make him liable. The absence of good faith is essential to
abuse of right. Good faith is an honest intention to abstain from taking any
unconscientious advantage of another, even through the forms or technicalities of
the law, together with an absence of all information or belief of fact which would
render the transaction unconscientious. In business relations, it means good faith as
understood by men of affairs.
• While Article 19 may have been intended as a mere declaration of principle, the J.C. LERIT
Page 252 of 528

230 Andrade v CA De Leon lessons and to function as an Assistant Librarian. As for the deletion of Andrade’s
G.R. No. 127932. December 7, 2001 name from the regular monthly payroll, Wingsing declared that he and his co-
defendants were merely exercising and doing their duties in accordance with the
FACTS existing school policies, rules and regulations.
• Virgina Andrade was appointed as permanent teacher in the Division of City
Schools, Manila. She was initially assigned as English teacher at the Araullo High ISSUES & ARGUMENTS
School, Manila. • W/N Wingsing, Fermin and Coronel are liable for damages against Andrade
• Two days before the opening of classes for the school year 1985-1986, Andrade
inquired from the English Department Head, Virginia E. Fermin, about her teaching HOLDING & RATIO DECIDENDI
load, and in response thereto, she was referred to Dominador Wingsing, Principal of
the Araullo High School. However, a subsequent visit by Andrade to Wingsing on NO.
June 19, 1985 yielded negative results as the latter merely referred back the Andrade
to English Department Head Fermin. • It must be noted that the present petition originated from an action for damages for
• Irked by the manner by which she was being referred back and forth from one alleged withholding of petitioner’s teaching load and deletion of her name from the
person to another, the Andrade wrote to Arturo F. Coronel, Assistant Schools regular monthly payroll caused by Wingsing, Fermin and Coronel. From the initial
Division Superintendent of the Division of City Schools, Manila, requesting that she pleading and the testimony of petitioner Andrade, it appeared that her claim for
be given a teaching assignment. In an indorsement, addressed to Superintendent damages was based on Article 19 of the New Civil Code which provides that:
Coronel, Wingsing cited three (3) reasons why Andrade Andrade was not given any “Every person must, in the exercise of his rights and in the performance of his
teaching load: (1) drastic drop of enrollment; (2) she was declared an excess teacher; duties, act with justice, give everyone his due, and observe honesty and good faith.”
and (3) she ranked lowest in her performance rating. Hence Superintendent Coronel • While Article 19 of the New Civil Code may have been intended as a declaration of
informed the Andrade, through Wingsing, that the Andrade would be designated principle, the “cardinal law on human conduct” expressed in said article has given
to a non-teaching position in the meantime that arrangements were being made for rise to certain rules, e.g., that where a person exercises his rights but does so
her eventual reassignment to other schools where her services may be needed. arbitrarily or unjustly or performs his duties in a manner that is not in keeping with
• Andrade made a request to Benedicto M. Hormilla, Chief of Personnel Services of honesty and good faith, he opens himself to civil liability. The elements of abuse of
the Division of City Schools of Manila, that she be transferred from Araullo High one’s rights under the said Article 19 are the following: (1) there is a legal right or
School to Ramon Magsaysay High School in Manila, and said request was favorably duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing or
acted upon by Superintendent Coronel. Andrade then reported for work at the injuring another.[19] In this regard, it appeared that the complaint of petitioner
Ramon Magsaysay High School, but in a letter of the same date of first day at such Andrade failed to meet the second and third requirements.
school, Andrade relayed that she is withdrawing her request for transfer and • A careful review of the records reveals that the declaration of petitioner as an excess
indicated her intention of remaining at the Araullo High School. Thereafter, teacher was not motivated by any personal desire on the part of respondent
Andrade discovered that her name has been deleted from the regular monthly Wingsing to cause her undue misery or injury, but merely the result of the valid
payroll and transferred to a special voucher list. exercise of authority. The decrease in the enrollment for the school year 1985-1986
• Feeling aggrieved, Andrade filed an action for damages with mandatory injunction in the Araullo High School resulted in a number of teachers being declared as
against Wingsing, English Department Head Fermin and Assistant Schools Division excess teacher.
Superintendent Coronel before the RTC. Andrade claimed that Wingsing, Fermin • In exercising his judgment, the evidence reveals that respondent Wingsing was not
and Coronel conspired in depriving her of her teaching load and humiliated her at all dictated by whim or fancy, nor of spite against the petitioner but was rather
further by excluding her name from the regular monthly payroll. guided by the following factors: qualification to teach, seniority, teaching
• In his answer, Wingsing disclaimed any intention to maliciously deprive the Andrade performance and attitude towards the school community. For two (2) consecutive
of her teaching load. He explained that the decrease in the enrollment for the years petitioner received an unsatisfactory rating, the lowest, from two (2) English
school year 1985-1986 necessitated that a number of teachers be declared in a list as Department Heads. Andrade was therefore correctly declared as an excess teacher,
excess teachers, and as Andrade had the lowest performance rating, she was as rightfully recommended by Wingsing, the latter being the school principal. It was
included in the said list. Nonetheless, Wingsing asserted that due consideration a judgment made in good faith.
was extended to Andrade upon instruction from Superintendent Coronel to provide
her with a non-teaching job in the meantime that her next assignment was being
determined. However, Andrade declined his offer to handle Developmental Reading JON LINA
Page 253 of 528
231 HSBC vs. Catalan |Austria Martinez become the source of some illegality. A person should be protected only when he
G.R. No. 159590 & 159591 October 18, 2004| acts in the legitimate exercise of his right, that is, when he acts with prudence and in
good faith; but not when he acts with negligence or abuse.
FACTS • There is an abuse of right when it is exercised for the only purpose of prejudicing or
• Thomson drew 5 checks payable to Catalan in the total amount of HK$3.2 million. injuring another. The exercise of a right must be in accordance with the purpose for
Catalan presented these checks to HSBC [Bank]. The checks were dishonored for which it was established, and must not be excessive or unduly harsh; there must be
having insufficient funds. Thomson demanded that the checks be made good no intention to injure another.
because he, in fact, had sufficient funds. • Thus, in order to be liable under the abuse of rights principle, three elements must
• Catalan knowing that Thomson had communicated witht the Bank, asked HSBC concur, to wit: (a) that there is a legal right or duty; (b) which is exercised in bad
Bank to clear the checks and pay her the said amount. HSBC did not heed her. faith; and (c) for the sole intent of prejudicing or injuring another.
• Thomson died but Catalan was not paid yet. The account was transferred to HSBC • HSBANK is being sued for unwarranted failure to pay the checks notwithstanding
[Trustee]. Catalan then requested Trustee to pay her. They still refused and even the repeated assurance of the drawer Thomson as to the authenticity of the checks
asked her to submit back to them the original checks for verification. and frequent directives to pay the value thereof to Catalan. Her allegations in the
• Catalan and her lawyer went to Hongkong on their own expense to personally complaint that the gross inaction of HSBANK on Thomson’s instructions, as well
submit the checks. They still were not honored. as its evident failure to inform Catalan of the reason for its continued inaction and
• So Catalan now is suing HSBC to collect her HK$3.2M. non-payment of the checks, smack of insouciance on its part, are sufficient
statements of clear abuse of right for which it may be held liable to Catalan for any
ISSUES & ARGUMENTS damages she incurred resulting therefrom. HSBANK’s actions, or lack thereof,
• W/N HSBC Bank and Trustee are liable to pay damages to Catalan on the prevented Catalan from seeking further redress with Thomson for the recovery of
ground of Abuse of right under Article 19 of the Civil Code her claim while the latter was alive.
o Petitioner: HSBC claims that they are a foreign corporation not doing business
in the Philippines thus the courts do not have jurisdiction over them.
Moreover, there is no cause of action because it was not alleged in the that
there was abuse of right.
o Respondent: Catalan claims that although HSBC has the right to examine the
checks, they did so in bad faith becase they required her to submit all sorts of
documents and yet even upon showing that the checks were good, the Bank
still refused to relaease the money to her. There was abuse of right on the part
of the Bank.
THERE IS CAUSE OF ACTION, IT NEED NOT BE EXPRESSLY STATED,

THE FACTS SUFFICIENTLY DESCRIBE THAT THERE WAS AN ABUSE
OF RIGHT.
• Article 19 of the Civil Code speaks of the fundamental principle of law and human
conduct that a person "must, in the exercise of his rights and in the performance of
his duties, act with justice, give every one his due, and observe honesty and good
faith." It sets the standards which may be observed not only in the exercise of one’s
rights but also in the performance of one’s duties.
• When a right is exercised in a manner which does not conform with the norms
enshrined in Article 19 and results in damage to another, a legal wrong is thereby
committed for which the wrongdoer must be held responsible. But a right, though
by itself legal because recognized or granted by law as such, may nevertheless MIK MALANG
Page 254 of 528

232 NAPOCOR vs. CA | Carpio • Ordinarily, the dismissal of the expropriation case restores possession of the
G.R. No. 106804, August 12, 2004| expropriated land to the landowner. However, when possession of the land cannot
be turned over to the landowner because it is neither convenient nor feasible
FACTS anymore to do so, the only remedy available to the aggrieved landowner is to
• National Power Corporation (NPC) is a public corporation created to generate demand payment of just compensation
geothermal, hydroelectric, nuclear and other power and to transmit electric power • In this case, the Court agreed with the trial and appellate courts that it is no longer
nationwide and is authorized by law to acquire property and exercise the right of possible and practical to restore possession of the Property to Pobre. The Property
eminent domain is no longer habitable as a resort-subdivision. The Property is worthless to Pobre
• Pobre is the owner of a parcel of land to which he developed into a resort- and is now useful only to NPC. Pobre has completely lost the Property as if NPC
subdivision, named as “Tiwi Hot Springs Resort Subdivision” (the Property) duly had physically taken over the entire 68,969 square-meter Property
approved by the CFI • This case ceased to be an action for expropriation when NPC dismissed its
• The Commission on Volcanology certified that thermal mineral water and steam complaint for expropriation. Since this case has been reduced to a simple case of
were present beneath the Property and that it is suitable for domestic use and recovery of damages, the provisions of the Rules of Court on the ascertainment of
potentially for commercial or industrial use the just compensation to be paid were no longer applicable. A trial before
• Because of this, NPC became involved with the Property in 3 instances commissioners, for instance, was dispensable
o Leased 11 of the lots in the approved subdivision plan for one year • From the beginning, NPC should have initiated expropriation proceedings for Pobre's entire
o Filed its 1st expropriation case against Pobre, where NPC began its drilling 68,969 square-meter Property. NPC did not. Instead, NPC embarked on a piecemeal
and construction operations and pending its case, dumped waste materials expropriation of the Property. Even as the second expropriation case was still pending, NPC was
that altered the topography of some portions of the Property well aware of the damage that it had unleashed on the entire Property. NPC, however, remained
o Filed its 2nd expropriation case against Pobre to acquire additional parts of impervious to Pobre's repeated demands for NPC to abate the damage that it had wrought on his
the Property, this is the subject of the case Property
• By virtue of the writ of possession issued by the trial court, upon NPC’s deposit of • NPC's abuse of its eminent domain authority is appalling. However, we cannot award moral
the equivalent FMV of the lots covered by the 2nd expropriation case, NPC entered damages because Pobre did not assert his right to it. The Court also cannot award
the property attorney's fees in Pobre's favor since he did not appeal from the decision of the
• Pobre filed a motion to dismiss the 2nd expropriation case and claimed damages due Court of Appeals denying recovery of attorney's fees
to NPC’s actions • The lesson in this case must not be lost on entities with eminent domain authority. Such entities
• Thereafter, NPC also filed a motion to dismiss the 2nd expropriation case on the cannot trifle with a citizen's property rights. The power of eminent domain is an extraordinary
ground that it found an alternative site and it abandoned the Property power they must wield with circumspection and utmost regard for procedural requirements. Thus,
• The trial court granted NPC’s motion and allowed Pobre to adduce evidence, to we hold NPC liable for exemplary damages of P100,000. Exemplary damages or
which the trial court admitted because NPC failed to object corrective damages are imposed, by way of example or correction for the public
• The trial court issued an Order in favor of Pobre; Motion for Reconsideration good, in addition to the moral, temperate, liquidated or compensatory damages
denied
• On appeal, the Court of Appeals upheld the decision of the trial court; Motion for Appealed decision AFFIRMED WITH MODIFICATION
Reconsideration denied. Hence, this petition
ISSUES & ARGUMENTS

• W/N Pobre is entitled to the damages claimed for the dumping of waste
materials by NPC which altered the topography of the Propety supposedly
used for a resort-subdivision
POBRE IS ENTITLED TO THE DAMAGES CLAIMED.

KATH MATIBAG
Page 255 of 528

233 Carpio v. Valmonte| Tinga, J. rights and in the performance of his duties, act with justice, give everyone his due and observe honesty
G.R. No. 151866. September 9, 2004 and good faith.” To find the existence of an abuse of right, the following elements
must be present: (1) there is a legal right or duty; (2) which is exercised in bad faith;
FACTS (3) for the sole intent or prejudicing or injuring another. When a right is exercised in
• Respondent Leonora Valmonte is a wedding coordinator. Michelle del Rosario and a manner which discards these norms resulting in damage to another, a legal wrong
Jon Sierra engaged her services for their church wedding. On that day, Valmonte is committed for which the actor can be held accountable.
went to the Manila Hotel where the bride and her family were billeted. When she • The following provisions Complement the abuse of right principle:
arrived at the Suite, several persons were already there including the bride. Among Art. 20. Every person who, contrary to law, willfully or negligently causes damage to another,
those present was petitioner Soledad Carpio, an aunt of the bride who was preparing shall indemnify the latter for the same.
to dress up for the occasion. Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to
• After reporting to the bride, Valmonte went out of the suite carrying the items morals or good customs or public policy shall compensate the latter for the damage.
needed for the wedding rites and the gifts from the principal sponsors. She • The foregoing rules provide the legal bedrock for the award of damages to a party
proceeded to the Maynila Restaurant where the reception was to be held. who suffers damage whenever one commits an act in violation of some legal
• She went back to the suite after, and found several people lstaring at her when she provision, or an act which though not constituting a transgression of positive law,
entered. . It was at this juncture that petitioner allegedly uttered the following words nevertheless violates certain rudimentary rights of the party aggrieved.
to Valmonte: “Ikaw lang ang lumabas ng kwarto, nasaan ang dala mong bag? Saan ka • In the case at bar, petitioner’s verbal reproach against respondent was certainly
pumunta? Ikaw lang and lumabas ng kwarto, ikaw ang kumuha.” Petitioner then ordered uncalled for considering that by her own account nobody knew that she brought
one of the ladies to search Valmonte’s bag. It turned out that after Valmonte left such kind and amount of jewelry inside the paper bag. True, petitioner had the right
the room to attend to her duties, petitioner discovered that the pieces of jewelry to ascertain the identity of the malefactor, but to malign respondent without an iota
which she placed inside the comfort room in a paper bag were lost. Hotel Security of proof that she was the one who actually stole the jewelry is an act which, by any
was later called. standard or principle of law is impermissible. Petitioner had willfully caused injury to
• A few days after the incident, petitioner received a letter from Valmonte demanding respondent in a manner which is contrary to morals and good customs. She did
a formal letter of apology which she wanted to be circulated to the newlyweds’ not act with justice and good faith for apparently, she had no other purpose in mind
relatives and guests to redeem her smeared reputation as a result of petitioner’s but to prejudice respondent. Certainly, petitioner transgressed the provisions of
imputations against her. Petitioner did not respond to the letter. Thus, on 20 Article 19 in relation to Article 21 for which she should be held accountable.
February 1997, Valmonte filed a suit for damages against petitioner.
ISSUES & ARGUMENTS

• W/N respondent Valmonte is entitled to damages
Valmonte is entitled to damages.

• To warrant recovery of damages, there must be both a right of action, for a wrong
inflicted by the defendant, and the damage resulting therefrom to the plaintiff.
Wrong without damage, or damage without wrong, does not constitute a cause of
action.
• In the our law on human relations, the victim of a wrongful act or omission,
whether done willfully or negligently, is not left without any remedy or recourse to
obtain relief for the damage or injury he sustained. Incorporated into our civil law
are not only principles of equity but also universal moral precepts which are
designed to indicate certain norms that spring from the fountain of good conscience
and which are meant to serve as guides for human conduct. First of these
fundamental precepts is the principle commonly known as “abuse of rights” under
Article 19 of the Civil Code. It provides that “Every person must, in the exercise of his NINA MEIJA
Page 256 of 528

234 D.M. Wenceslao et al.. vs. Readycon Trading Construction Corp. | • The SC found that petitioner is not entitled to an award of actual or compensatory
Quisumbing damages. Unlike Lazatin and MC Engineering, wherein the respective complaints
G.R. No. 154106 June 29, 2004| were dismissed for being unmeritorious, the writs of attachment were found to
be wrongfully issued, in the present case, both the trial and the appellate
FACTS courts held that the complaint had merit. Stated differently, the two courts
• Petitioner Wenceslao had a contract with the PEA to improve Coastal Road. To found respondent entitled to a writ of preliminary attachment as a provisional
fulfill its obligation, it also contracted with respondent Readycon for the latter to remedy by which the property of the defendant is taken into custody of the law as a
supply petitioner with asphalt materials valued at 1.1MPhp. Under the contract, security for the satisfaction of any judgment which the plaintiff may recover.
petitioner was bound to pay 20% upon delivery of the materials and the balance 15 • If petitioner suffered damages as a result, it is merely because it did not heed the
days after completion of the road. It was further stipulated by the parties that demand letter of the respondent in the first place. It could have averted such
respondent was to furnish, deliver, lay, roll the asphalt, and if necessary, make the damage if it immediately filed a counter-bond or a deposit in order to lift the writ at
needed corrections on a prepared base at the jobsite. once. It did not, and must bear its own loss, if any, on that account.
• Respondent fulfilled its part of the contract but petitioner refused to pay the balance
despite repeated demands. Respondent was therefore constrained to file suit in the
RTC for collection of sum of money with application for a writ of preliminary
attachment. After filing the bond, the writ was granted and the sheriff seized the
following heavy equipments of petitioner: 1 asphalt paver, 1 bulldozer, 1 dozer and
1 grader. Upon posting of a counter-bond, the petitioner was able to have the
aforementioned equipments released.
• During the course of trial in the RTC, petitioner admitted its debt to respondent but
interposed the defense that the same was not yet due and demandable because
payment was only to made after the government accepted the respondent’s work as
to the quality and condition of the asphalt. Petitioner by way of counterclaim
sought damages because of respondent’s suit and the issuance of the writ of
preliminary attachment.
• The RTC held petitioner liable for the unpaid sums and dismissed it counterclaim
and the CA affirmed the RTC in toto. Hence this petition for review.
ISSUES & ARGUMENTS

• W/N the petitioners are liable for the unpaid balance.
• W/N the respondents are liable for damages for the issuance of the writ of
preliminary attachment
YES Petitioner must pay the balance.
• Petitioner’s defense that the contract failed to express the true intent of the parties is
primarily a factual issue which is not a proper question to be raised under Rule 45
since only questions of law may be raised. Besides, telling against petitioner
WENCESLAO is its failure still to pay the unpaid account, despite the fact of the
work’s acceptance by the government already.
NO. Respondent is not liable for damages.

JOHAN UY
Page 257 of 528

235 Llorente v Sandiganbayan | Sarmiento obligations noted on his clearance totalling Pl0,714.98. For this reason, the clearance
G.R. No. 85464 October 3, 1991 | was held up in his office and did not reach Atty. Rodriguez.
• It appears that Mr. Curio heavily pursued the passing of his clearance to the point
FACTS that he filed a case in the Tanodbayan against Atty. Llorente and Col. Dueñas.
• As a result of a massive reorganization in 1981, hundreds of Philippine Coconut • Subsequently, Mr. Curio was able to file another clearance which did not require the
Authority (PCA) employees resigned effective October 31, 1981. Among them were aforesaid condition.
Mr. Curio, Mrs. Perez, Mr. Azucena, and Mrs. Javier. By reason of which they were • Between December 1981 and December 1986, Mr. Curio failed to get gainful
all required to apply for PCA clearances in support of their gratuity benefits, one of employment; as a result, his family literally went hungry. In 1981, he applied for
the condition of which: work with the Philippine Cotton Authority, but was refused, because he could not
The clearance shall be signed by the PCA officers concemed only when there is no item present his PCA clearance. The same thing happened when he sought employment
appearing under "PENDING ACCOUNTABILITY" or after every item previously with the Philippine Fish Marketing Administration in January 1982. In both
entered thereunder is fully settled. Settlement thereof shall be written in RED ink. prospective employers, the item applied for was P2,500.00 a month. At that time, he
• After the clearance was signed by the PCA officers concerned, it was to be was only about 45 years old and still competitive in the job market. But in 1986,
approved, first, by Atty. Llorente, in the case of a rank-and-file employee, or by Col. being already past 50 years, he could no longer be hired permanently, there being a
Dueñas, the acting administrator, in the case of an officer, and then by Atty. regulation to that effect. His present employment with the Philippine Ports
Rodriguez, the corporate auditor . Authority, which started on March 16, 1987, was casual for that reason. Had his
• The clearance of Mrs. Javier dated October 30, 1991 was signed by all PCA officers gratuity benefits been paid in 1981, he would have received a bigger amount,
concerned, including Mrs. Sotto even though the former had unsettled obligations considering that since then interest had accrued and the foreign exchange rate of the
noted thereon, viz 'SIS loan — P5,387.00 and UCPB car loan P19,705.00, or a total peso to the dollar had gone up.
of P25,092.00, and later on approveed by Col. Dueñas, Mrs Javier being an officer, • On December 10, 1986, an Information for violation of Section 3(c) of the Anti-
and Atty. Rodriguez. Similarilv the, voucher of Mrs. Javier for her gratuity benefits Graft and Corrupt Practices Act was filed against Atty. Llorente for which he was
likewise recited her accountabilities of P25,092.00 plus P92.000.00, which was acquitted but held civilly liable for damages (P90,000) under Article 19 of the Civil
handwritten. Both accounts were deducted from her gratuity benefits, and the Code.
balance released to her on November 16, 1981. The voucher passed post-audit by
Atty. Rodriguez on December 1, 1981. ISSUES & ARGUMENTS
• The said P92,000.00 was the disallowed portion of the cash advances received by • W/N Sandiganbayan erred in holding Atty. Llorente civilly liable despite his
Mr. Curio in connection with his duties as "super cargo" in the distribution of seed acquittal?
nuts throughout the country. He received them through and in the name of Mrs. o Petitioner’: The Sandiganbayan's Decision is erroneous even if the
Javier from the UCPB. When the amount was disallowed, the UCPB withheld from Sandiganbayan acquitted him therein, because he was never in bad faith as
the PCA certain receivables; the latter, in turn, deducted the same amount from the indeed found by the Sandiganbayan.
gratuity benefits of Mrs. Javier, she being primarily liable therefor. At the time of the
deduction, the additional liquidation papers had already been submitted and were in HOLDING & RATIO DECIDENDI
process. Just in case she would not be successful in having the entire amount wiped
out, she requested Mr. Curio, who admittedly received it, to execute, as he did, an NO. It is the essence of Article 19 of the Civil Code, under which the petitioner
affidavit dated November 26, 1981, in which he assumed whatever portion thereof was made to pay damages, together with Article 27, that the performance of duty
might not be allowed. be done with justice and good faith.
• The clearance of Mr. Curio dated November 4,1981, likewise favorably passed all
officers concerned, including Mrs. Sotto, the latter signing despite the notation • The records show that the office practice indeed in the PCA was to clear the
handwritten on December 8, 1981, that Mr. Curio had pending accountabilities, employee (retiree) and deduct his accountabilities from his gratuity benefits. There
namely: GSIS loan — 2,193.74, 201 accounts receivable — P3,897.75, and UCPB seems to be no debate about the existence of this practice (the petitioner admitted it
loan — P3,623.49, or a total of P10,714.78. However, when the clearance was later on) and in fact, he cleared three employees on the condition that their
submitted to Atty. Llorente for approval, he refused to approve stating as cause the obligations should be deducted from their benefits. The Court quotes:
fact that he was already aware of the affidavit dated November 26, 1981, in which Confronted with these evidence (sic), Atty. Llorente conceded, albeit grudgingly, the existence of
Mr. Curio assumed to pay any residual liability for the disallowed cash advances, the practice by the accounting division of not complying with Condition (a). He, however,
which at the time, December 8, 1981. Moreover, Mr. Curio had other pending claimed that he learned of the practice only during the trial of the case and that he must have
Page 258 of 528
inadvertently approved the clearances of Mrs. Perez, Mr. Azucena, and possibly others who
were similarly situated (TSN, March 9/88,pp. 4-5). This the evidence belies. First, he
himself testified that when the clearance of Mr. Curio was presented to him in December
1981, it already bore the signature of Mrs. Sotto of the accounting division and the notation
set opposite her name about the outstanding accountabilities of Mr. Curio; but he (Atty.
Llorente) significantly did not ask her why she signed the clearance (TSN, Nov. 24/87, pp.
24-25). Second, in that month, Atty. Llorente approved Mrs. Perez's and Mr.
Azucena's vouchers showing that hey has pending obligations to the GSIS
and the UCPB, which were being deducted from their gratuity benefits
(thus are similarly situated with Mr. Curio). Attached to those vouchers were the
clearances as supporting documents (Exhs. M-2 and N-1; TSN, Dec. 7/87, pp. 13,23).
And third, in the same month, Atty. Llorente was already aware of the case of Mrs. Javier
whose clearance and voucher were, according to him, precisely withheld because of her unsettled
accountability for the cash advances of P92,000.00, but here later on given due course; and
her gratuity benefits released on November 16, 1981, minus that amount (TSN, Nov.
24/87, pp. 31-32; Exhs. L, L-1, L-2 and L-3).
The cash advances of P92,000.00 were the primary obligation of Mrs. Javier, since they were
secured through her and in her name from the UCPB. That was why they were charged to and
deducted from, her gratuity benefits. Consequently, as early as that date and in so far as the
PCA and the UCPB were concerned, the accountability was already fully paid. The
assumption of residual liability by Mr. Curio for the cash advances on November 26, 1981,
was a matter between him and Mrs. Javier.
• The general rule is that this Court is bound by the findings of fact of the
Sandiganbayan.
• The acts of Atty, Llorente were legal (that is, pursuant to procedures), as he insists in
this petition, yet it does not follow, as we said, that his acts were done in good faith.
For emphasis, he had no valid reason to "go legal" all of a sudden with respect to
Mr. Curio, since he had cleared three employees who, as the Sandiganbayan found,
"were all similarly circumstanced in that they all had pending obligations when, their
clearances were filed for consideration, warranting similar official action."
• The Court is convinced that the petitioner had unjustly discriminated against Mr.
Curio.
• It is no defense that the petitioner was motivated by no ill-will (a grudge, according
to the Sandiganbayan), since the facts speak for themselves. It is no defense either
that he was, after all, complying merely with legal procedures since, as we indicated,
he was not as strict with respect to the three retiring other employees. There can be
no other logical conclusion that he was acting unfairly, no more, no less, to Mr.
Curio.
TEL VIRTUDEZ
Page 259 of 528

236 Heirs of Purisima Nala vs Artemio Cabansag| Austria-Martinez that the basis for his claim for damages is Article 19 of the Civil Code, which
G.R. No.161188 13 June 2008| provides:
FACTS Art. 19. Every person must, in the exercise of his rights and in the performance of his
• Artemio Cabansag (respondent) filed Civil Case for damages in October 1991. duties, act with justice, give everyone his due, and observe honesty and good faith.
According to respondent, he bought a 50-square meter property from spouses
Eugenio Gomez, Jr. and Felisa Duyan Gomez on July 23, 1990. • It should be stressed that malice or bad faith is at the core of Article 19 of the Civil
• Said property is part of a 400-square meter lot registered in the name of the Gomez Code. Good faith is presumed, and he who alleges bad faith has the duty to prove
spouses. In October 1991, he received a demand letter from Atty. Alexander del the same. Bad faith, on the other hand, does not simply connote bad judgment to
Prado (Atty. Del Prado), in behalf of Purisima Nala (Nala), asking for the payment simple negligence, dishonest purpose or some moral obloquy and conscious doing
of rentals from 1987 to 1991 until he leaves the premises, as said property is owned of a wrong, or a breach of known duty due to some motives or interest or ill will
by Nala, failing which criminal and civil actions will be filed against him. that partakes of the nature of fraud. Malice connotes ill will or spite and speaks not
• Another demand letter was sent on May 14, 1991. Because of such demands, in response to duty. It implies an intention to do ulterior and unjustifiable harm.
respondent suffered damages and was constrained to file the case against Nala and • In the present case, there is nothing on record which will prove that Nala and her
Atty. Del Prado. counsel, Atty. Del Prado, acted in bad faith or malice in sending the demand letters
• Atty. Del Prado claimed that he sent the demand letters in good faith and that he to respondent. In the first place, there was ground for Nala's actions since she
was merely acting in behalf of his client, Nala, who disputed respondent's claim of believed that the property was owned by her husband Eulogio Duyan and that
ownership. respondent was illegally occupying the same. She had no knowledge that spouses
• Nala alleged that said property is part of an 800-square meter property owned by her Gomez violated the trust imposed on them by Eulogio and surreptitiously sold a
late husband, Eulogio Duyan, which was subsequently divided into two parts. The portion of the property to respondent. It was only after respondent filed the
400-square meter property was conveyed to spouses Gomez in a fictitious deed of case for damages against Nala that she learned of such sale. The bare fact that
sale, with the agreement that it will be merely held by them in trust for the Duyan's respondent claims ownership over the property does not give rise to the conclusion
children. that the sending of the demand letters by Nala was done in bad faith. Absent any
• Said property is covered by Transfer Certificate of Title (TCT) No. 281115 in the evidence presented by respondent, bad faith or malice could not be attributed to
name of spouses Gomez. Nala also claimed that respondent is only renting the petitioner since Nala was only trying to protect their interests over the property.
property which he occupies. • In order to be liable for damages under the abuse of rights principle, the following
• After trial, the RTC of Quezon City, Branch 93, rendered its Decision on August 10, requisites must concur: (a) the existence of a legal right or duty; (b) which is
1994, in favor of respondent. Nala and Atty. Del Prado appealed to the CA. exercised in bad faith; and (c) for the sole intent of prejudicing or injuring another.
• In affirming the RTC Decision, the CA took note of the Decision rendered by the
RTC of Quezon City, dismissing Civil Case action for reconveyance of real property • Thus, there can be damage without injury in those instances in which the loss or
and cancellation of TCT with damages, filed by Nala against spouses Gomez. harm was not the result of a violation of a legal duty. In such cases, the
consequences must be borne by the injured person alone; the law affords no remedy
ISSUES & ARGUMENTS for damages resulting from an act which does not amount to a legal injury or wrong.
• W/N the Court of Appeals erred in awarding damages and attorney's fees These situations are often called damnum absque injuria.
without any basis. • Nala was acting well within her rights when she instructed Atty. Del Prado to send
the demand letters. She had to take all the necessary legal steps to enforce her
legal/equitable rights over the property occupied by respondent. One who makes
use of his own legal right does no injury. Thus, whatever damages are suffered by
HOLDING & RATIO DECIDENDI respondent should be borne solely by him.
Yes.
• Preliminarily, the Court notes that both the RTC and the CA failed to indicate the
particular provision of law under which it held petitioners liable for damages.
Nevertheless, based on the allegations in respondent's complaint, it may be gathered SATURDAY ALCISO
Page 260 of 528

237 Hermosisima vs. CA| Concepcion
G.R. No. L-14628, September 30, 1960 |109 SCRA 629
FACTS
• Complainant Soledad Cagigas was born on July 1917. Since 1950, complainant, then
a teacher in the Sibonga Provincial High School in Cebu, dated petitioner Francisco
Hermosisima who was almost 10 years younger than her. They were regarded as
engaged although he had made no promise of marriage prior thereto.
• In 1951, she gave up teaching and became a life insurance underwriter when one
evening, after coming from the movies, they had sexual intercourse in his cabin on
board M/V Escano to which he was then attached as apprentice pilot.
• In February 1954, Soledad advised petitioner that she was pregnant whereupon he
promised to marry her. Their child Chris Hermosisima was born on July 17, 1954.
Subsequently however, petitioner married Romanita Perez.
• Soledad then filed with the CFI of Cebu a complaint for the acknowledgment of her
child, as well as for support of said child and moral damages from breach of
promise to marry.
• Petitioner admitted the paternity of the child and expressed willingness to support
the latter but denied having ever promised to marry complainant.
ISSUES & ARGUMENTS

• W/N moral damages are recoverable for breach of promise to marry.
• W/N petitioner is morally guilty of seduction.
NO, BREACH OF PROMISE TO MARRY NOT ACTIONABLE.
• It is the clear and manifest intent of Congress not to sanction actions for breach of
promise to marry.
NO, PETITIONER NOT GUILTY OF SEDUCTION
• The “seduction” contemplated in Article 2219 of the New Civil Code as one of the
cases where moral damages may be recovered, is the crime punished as such in
Articles 337 & 338 of the Revised Penal Code.
• Where a woman, who was an insurance agent and former high school teacher,
around 36 years of age and approximately 10 years older than the man,
“overwhelmed by her love” for the man, had intimate relations with him,
because she “wanted to bind” him “by having a fruit of their engagement
even before they had the benefit of clergy,” it cannot be said that he is
morally guilty of seduction.
BON ARCILLA
Page 261 of 528

238 Gashem Shookat Baksh vs. CA and Marilou Gonzales| Davide, Jr. EMPLOYMENT.’ OBVIOUSLY THEN, HE WAS NOT AT ALL MOVED BY
G.R. No. 97336, February 19, 1933| GOOD FAITH AND AN HONEST MOTIVE. HIS PROFESSION OF LOVE
AND PROMISE TO MARRY WERE EMPTY WORDS INTENDED TO
FACTS DECEIVE MARILOU.
• Private respondent Marilou is a pretty 22 y/o Filipina of good moral character and
reputation. On the other hand, petitioner is an Iranian citizen taking up medicine at • The existing rule is that a breach of promise to marry per se is not an actionable
the Lyceum NW Colleges in Dagupan and residing at the Lozano Apartments. The wrong. Congress deliberately eliminated from the draft of the NCC the provisions
two met in Mabuhay Luncheonette where the former used to work. that would have made it so.
• Marilou filed a complaint for damages for the alleged violation of their agreement to • However, the same Code contains a provision, Art. 21, which is designed to expand
get married. She claimed that she accepted Gashem’s love on the condition that they the concept of torts or quasi-delict in this jurisdiction by granting adequate legal
would get married. She said she was a virgin before she began living with him. She remedy for the untold number of moral wrongs which is impossible for human
narrated that a week before the filing of the complaint, petitioner’s attitude towards foresight to specifically enumerate and punish in the statute books.
her started to change (i.e. he maltreated and threatened to kill her). Further, he • In the light of the above laudable purpose of Art. 21, where a man’s promise to
repudiated their marriage agreement and asked her not to live with him anymore. marry is in fact the PROXIMATE CAUSE of the acceptance of his love by a
• In his answer, petitioner denied proposing marriage or agreeing to be married. He woman and his representation to fulfill that promise thereafter becomes the
denied maltreating Marilou and asserted that the complaint is baseless. proximate cause of the giving of herself unto him in a sexual congress, proof that he
• Trial court, applying Art 21, ruled in favor of private respondent. It concluded that had, in reality, no intention of marrying her and that the promise was only a subtle
(a) Gashem and Marilou were lovers, (b) the latter is not a woman of loose morals scheme to entice or inveigle her to accept him and to obtain her consent to the
or questionable virtue who readily submits to sexual advances, (c) Gashem, thru sexual act, could justify the award of damages pursuant to Art 21. It is essential,
machinations, deceit and false pretenses, promised to marry private respondent, (d) however, that such injury should have been committed in a manner contrary to
because of his persuasive promise to marry her, she allowed herself to be morals, good customs or public policy. (Cause: Promise to Marry, Effect: Carnal
deflowered by him; (e) by reason of that deceitful promise, Marilou and her parents- Knowledge= Cause of Action: Criminal (RPC, Art 338) or Moral (NCC, Art 21)
in accordance with FIl customs and traditions- made some preparations for the Seduction, Damages Due: Moral and Actual (should there be any, such as expenses
wedding by looking for pigs and chickens, inviting friends and relatives and for the wedding preparations).
contracting sponsors, (f) Gashem did not fulfill his promise to marry her and (g)
such acts of Gashem, who is a foreigner and who has abused FIl hospitality, have
offended our sense of morality, good customs, culture and traditions.
• CA affirmed.
ISSUES & ARGUMENTS

• W/N damages may be recovered for a breach of promise to marry on the
basis of Article 21 of the Civil Code
o Petitioner: As an Iranian Moslem, he is not familiar with Catholic and
Christian ways. Even if he had a promise to marry, the subsequent failure
to fulfill the same is excusable or tolerable because of his Moslem
upbringing (apat nga pde nya pakasalan). Besides, his acts would not be
actionable because according to jurisprudence, mere breach of promise is
not actionable.
YES. IN THIS CASE, PETITIONER’S STATEMENTS REVEAL HIS TRUE

CHARACTER AND MOTIVE. HE HARBORS A CONDASCENDING, IF
NOT SARCASTIC REGARD FOR MARILOU ON ACCT OF HER BIRTH,
INFERIOR EDUCL BACKGROUND, POVERTY AND ‘DISHONORABLE DANI BOLONG
Page 262 of 528

239 Ponce vs. Legaspi | Gutierrez, Jr. liable for malicious prosecution, where probable cause is shown, even where it
G.R. No. 79184, May 1992 | 208 SCRA 337 appears that the suit was brought for the mere purpose of vexing, harassing and
injuring his adversary.
FACTS • The petitioner, at the time of her filing of the administrative complaint against the
• The case stemmed from the filing before the SC of a complaint for disbarment respondent, held substantial stockholdings in L'NOR. She believed that L'NOR was
against respondent Atty. Valentino Legaspi by petitioner Erlinda Ponce. defrauded by its President/General Manager, Edward Porter, and filed a complaint
• At the time of the filing of the disbarment proceedings, Ponce owned forty three for estafa against the latter. Porter was convicted by the trial court but, upon appeal,
percent of the stockholdings of L'NOR Marine Services (L'NOR). She was then was acquitted by the appellate court
Treasurer and director of the Board of Directors of L'NOR while her husband was • Apparently, at that time, petitioner Ponce saw a conflict of interest situation.
a director. Forty eight percent of L'NOR's stocks was owned by the spouses • True, at that time, the Corporation Law did not prohibit a director or any other
Edward and Norma Porter who were then serving as President/General Manager person occupying a fiduciary position in the corporate hierarchy from engaging in a
and Secretary respectively. venture which competed with that of the corporation. But as a lawyer, Atty.
• During the time respondent is the legal counsel of the corporation, there occurred Legaspi should have known that while some acts may appear to be permitted
certain fraudulent manipulations by certain officers of said corporation, Porter et al. through sheer lack of statutory prohibition, these acts are nevertheless
• Edward J. Porter and Norma Y. Porter, together with Zenaida T. Manaloto, circumscribed upon ethical and moral considerations.
facilitated, assisted and aided by herein respondent Legaspi incorporated the • Since we adjudge that petitioner Ponce was moved by probable cause, we need not
Yrasport Drydocks, Inc., hereinafter designated YRASPORT, which they control anymore ascertain whether or not the petitioner acted with malice in filing the
that directly competes with the business of L’NOR. complaint. The existence of probable cause alone, regardless of considerations of
• That respondent Legaspi has committed gross misconduct in office as a practicing malice, is sufficient to defeat the charge of malicious prosecution.
lawyer and member of the Philippine Bar, because, as legal counsel, he violated his • Atty. Legaspi may have suffered injury as a consequence of the disbarment
duty to and the trust of his client, L'NOR when he assisted the Porter spouses in proceedings. But the adverse result of an action does not per se make the
incorporating said corporation. action wrongful and subject the actor to make payment of damages for the
• This is now an action to recover against Ponce commenced by Legaspi, alleging the law could not have meant to impose a penalty on the right to litigate.
disbarment proceedings are malicious and unfounded. • If damage results from a person's exercising his legal rights, it is damnum absque
injuria.
ISSUES & ARGUMENTS
• W/N the action by Ponce is malicious and would entitle Atty. Legaspi
damages
PONCE IS NOT LIABLE FOR DAMAGES FOR THERE IS NO PROBOBLE

CAUSE TO CHARGE HER WITH MALICIOUS PROSECUTION.
• In order, however, for the malicious prosecution suit to prosper, the plaintiff must
prove: (1) the fact of the prosecution and the further fact that the defendant was
himself the prosecutor, and that the action finally terminated with an acquittal; (2)
that in bringing the action, the prosecutor acted without probable cause; and (3) that
the prosecutor was actuated or impelled by legal malice, that is by improper or
sinister motive.
• The foregoing requisites are necessary safeguards to preserve a person's right to
litigate which may otherwise be emasculated by the undue filing of malicious
prosecution cases.
• Malice is essential to the maintenance of an action for malicious prosecution and not
merely to the recovery of exemplary damages. But malice alone does not make one GINO CAPATI
Page 263 of 528

240 Medel vs. Court of Appeals | Pardo consistently held that Circular No. 905 of the Central Bank has expressly removed
G.R. No. 131622, November 27, 1998 | the interest ceilings prescribed by the Usury Law and that the Usury Law is now
"legally inexistent".
FACTS • Usury has been legally non-existent in our jurisdiction. Interest can now be charged
• Franco and Medel obtained a loan from Gonzales, who was engaged in the money as lender and borrower may agree upon." Nevertheless, we find the interest at 5.5%
lending business under the name "Gonzales Credit Enterprises", in the amount of per month, or 66% per annum, stipulated upon by the parties in the promissory
P50,000.00, payable in two months. Veronica gave only the amount of P47,000.00, note iniquitous or unconscionable, and, hence, contrary to morals ("contra bonos
to the borrowers, as she retained P3,000.00, as advance interest for one month at mores"), if not against the law. The stipulation is void. The courts shall reduce
6% per month. Franco and Medel executed a promissory note for P50,000.00. equitably liquidated damages, whether intended as an indemnity or a penalty if they
• Thereafter, Franco and Medel obtained from Gonzales another loan in the amount are iniquitous or unconscionable.
of P90,000.00, payable in two months, at 6% interest per month. They executed a • Consequently, the Court of Appeals erred in upholding the stipulation of the parties.
promissory note to evidence the loan. On maturity of the two promissory notes, the Rather, we agree with the trial court that, under the circumstances, interest at 12%
borrowers failed to pay the indebtedness. per annum, and an additional 1% a month penalty charge as liquidated damages may
• For a third time Franco and Medel secured from Gonzales still another loan in the be more reasonable.
amount of P300,000.00, maturing in one month, secured by a real estate mortgage
over a property belonging to Yaptinchay, who issued a special power of attorney in Petition granted. Decision of Regional Trial Court Revived and affirmed.
favor of Medel, authorizing her to execute the mortgage.
• Like the previous loans, Franco and Medel failed to pay the third loan on maturity.
• Franco and Medel with the latter's husband, Dr. Rafael Medel, consolidated all their
previous unpaid loans totaling P440,000.00, and sought from Gonzales another loan
in the amount of P60,000.00, bringing their indebtedness to a total of P500,000.00.
• On maturity of the loan, the borrowers failed to pay the indebtedness of
P500,000.00, plus interests and penalties, evidenced by the above-quoted promissory
note.
• Gonzales, joined by her husband, filed a complaint for collection of the full amount
of the loan including interests and other charges.
• Defendants Medel alleged that the loan was the transaction of Yaptinchay, who
executed a mortgage in favor of the plaintiffs over a parcel of real estate situated in
San Juan, Batangas; that the interest rate is excessive at 5.5% per month with
additional service charge of 2% per annum, and penalty charge of 1% per month;
that the stipulation for attorney's fees of 25% of the amount due is unconscionable,
illegal and excessive, and that substantial payments made were applied to interest,
penalties and other charges.
ISSUES & ARGUMENTS

• W/N the interest rate stipulated upon in the loan agreements is valid?
THE STIPULATED RATE OF INTEREST OF 5.5% PER MONTH ON THE

LOAN IN THE SUM OF P500,000 IS USURIOUS.
• We agree with petitioners that the stipulated rate of interest at 5.5% per month on
the P500,000.00 loan is excessive, iniquitous, unconscionable and exorbitant.
MAUI MORALES
However, we can not consider the rate "usurious" because this Court has
Page 264 of 528
241 Perez vs. CA| Gonzaga-Reyes Said sum was paid in Producers Bank of the Philippines Check No. (illegible) 164595
G.R. No. 107737 October 1, 1999 |SCRA dated June 6, 1978.
Mr. Luis Keh has not transferred his rights over the fishpond to any person.
FACTS Caloocan City, June 6, 1978.
• Along with Maria Perez, Fructuosa Perez, Victoria Perez, Apolonio Lorenzo and JUAN L. PEREZ ET AL.
Vicente Asuncion, petitioner Juan Perez is a usufructuary of a parcel of land By:
popularly called the "Papaya Fishpond." (Sgd.)
• On June 5, 1975, the usufructuaries entered into a contract leasing the fishpond to Rosendo G. Tansinsin, Jr.
Luis Keh for a period of five (5) years and renewable for another five (5) years by CONFORME TO THE ABOVE:
agreement of the parties, under the condition that for the first five-year period the (Sgd.)
annual rental would be P150,000.00 and for the next five years, P175,000.00. LUIS KEH
Paragraph 5 of the lease contract states that the lessee "cannot sublease" the fishpond "nor assign Handwritten below that receipt but above the signature of petitioner Charlie Lee, are the
his rights to anyone." following: "Rec'd from Luis Crisostomo sum of one hundred fifty-four thousand
• Private respondent Luis Crisostomo, who reached only the 5th grade, is a P154,000.00 for above payment.
businessman engaged in the operation of fishponds. • Crisostomo incurred expenses for repairs in and improvement of the fishpond in
• On September 20, 1977, while he was at his fishpond in Almazar, Hermosa, Bataan, the total amount of P486,562.65.
his bosom friend named Ming Cosim arrived with petitioner Charlie Lee. The two • However, sometime in June 1979, petitioners Tansinsin and Juan Perez, in the
persuaded private respondent to take over the operation of "Papaya Fishpond" as company of men bearing armalites, went to the fishpond and presented Crisostomo
petitioner Lee and his partner, petitioner Luis Keh, were allegedly losing money in with a letter dated June 7, 1979 showing that petitioner Luis Keh had surrendered
its operation. possession of the fishpond to the usufructuaries.
• Crisostomo having agreed to the proposal, sometime in December of that year, he • Because of the threat to deprive him of earnings of around P700,000.00 that the
and petitioners Lee and Keh executed a written agreement denominated as 700,000 milkfish in the fishpond would yield, and the refusal of petitioners Keh,
"pakiao buwis" whereby private respondent would take possession of the "Papaya Juan Perez and Lee to accept the rental for June 5, 1979 to June 6, 1980,
Fishpond" from January 6, 1978 to June 6, 1978 in consideration of the amount of Crisostomo filed on June 14, 1979 with the then Court of First Instance of Bulacan
P128,000.00. an action for injunction and damages.
• Crisostomo paid the P75,000.00 to petitioner Keh at the house of petitioner Lee. • Thereafter, the usufructuaries entered into a contract of lease with Vicente
He paid the balance to petitioner Lee sometime in February or March 1978 Raymundo and Felipe Martinez for the six-year period of June 1, 1981 to May 30,
because he was uncertain as to the right of petitioners Keh and Lee to transfer 1987 in consideration of the annual rentals of P550,000.00 for the first two years
possession over the fishpond to him. Crisostomo made that payment only after he and P400,000.00 for the next four years. Upon expiration of that lease, the same
had received a copy of a written agreement dated January 9, 1978 4 whereby petitioner property was leased to Pat Laderas for P1 million a year.
Keh ceded, conveyed and transferred all his "rights and interests" over the fishpond to petitioner Lee, • Petitioners: Crisostomo could not have been an assignee or sub-lessee of the
"up to June 1985." fishpond because no contract authorized him to be so.
o From Crisostomo’s point of view, that document assured him of • Private respondent Crisostomo: petitioner Perez had no right to demand
continuous possession of the property for as long as he paid the agreed possession of the fishpond from him because Perez had no contract with him.
rentals of P150,000.00 until 1980 and P.175,000.00 until 1985.1â • TC and CA: Defendants [Juan Perez et.al.] conspired with one another to exploit
• For the operation of the fishpond from June 1978 to May 1979, Crisostomo paid the plaintiff's [Crisostomo] naivete and educational inadequacies and, in the process,
the amount of P150,000.00 at the Malabon, Metro Manila office of petitioner Keh. to defraud him by inducing him into taking possession of the "Papaya Fishpond" in
The following receipt was issued to him: their fond hope that, as soon as the plaintiff [Crisostomo] — applying his known
o RECEIPT expertise as a successful fishpond operator — shall have considerably improved the
June 6, 1978 fishpond, they will regain possession of the premises and offer the lease thereof to
P150.000,00 other interested parties at much higher rental rates as laid bare by supervening
Received from Mr. LUIS KEH the sum of ONE HUNDRED FIFTY THOUSAND realities." Agreeing with the court a quo that "defendants-appellants [Juan Perez
PESOS (P150,000.00), Philippine Currency, as full payment of the yearly leased rental of et.al.] employed fraud to the damage and prejudice of plaintiff-appellee
the Papaya Fishpond for the year beginning June 1978 and ending on May 1979. The next [Crisostomo]," the Court of Appeals held that appellants should be held liable for
payment shall be made on June 6, 1979. damages.
Page 265 of 528

petitioner Keh shall be liable to private respondent for the value of the
ISSUES & ARGUMENTS improvements he had made in the fishpond or for P486,562.65 with
• W/N private petitioner Keh is liable for damages. interest of six percent (6%) per annum from the rendition of the decision of
• W/N private petitioner Keh should be restored to the possession of the the trial court on September 6, 1989.
fishpond. • They violated Article 21 of the Civil Code and therefore private respondent should
be entitled to an award of moral damages. Article 21 states that "(a)ny person who
HOLDING & RATIO DECIDENDI wilfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage."
Yes. Private petitioner Keh is liable for damages. • Exemplary damages shall likewise be awarded pursuant to Article 2229 of the Civil
Code. Because private respondent was compelled to litigate to protect his interest,
• Admittedly, the contract between the usufructuaries and petitioner Keh has a attorney's fees shall also be awarded.
provision barring the sublease of the fishpond. However, it was petitioner Keh
himself who violated that provision in offering the operation of the fishpond to
Crisostomo.
• Apparently on account of Crisostomo's apprehensions as regards the right of
petitioners Keh and Lee to transfer operation of the fishpond to him, on January 9,
1978, petitioner Keh executed a document ceding and transferring his rights and
interests over the fishpond to petitioner Lee. Petitioner Keh transferred his rights
as a lessee to petitioner Lee in writing and that, by virtue of that document, private
respondent acceded to take over petitioner Keh's rights as a lessee of the fishpond.
• Although no written contract to transfer operation of the fishpond to private
respondent was offered in evidence, 33 the established facts further show that
petitioner Juan Perez and his counsel, petitioner Tansinsin, knew of and
acquiesced to that arrangement by their act of receiving from the Crisostomo the
rental for 1978-79. By their act of receiving rental from private respondent
Crisostomo through the peculiarly written receipt dated June 6, 1978, petitioners
Perez and Tansinsin were put in estoppel to question Crisostomo’s right to possess
the fishpond as a lessee.
No.
• To restore possession of the fishpond to him would entail violation of contractual

obligations that the usufructuaries have entered into over quite a long period of time
now.
• The Court may not supplant the right of the usufructuaries to enter into contracts
over the fishpond through a Decision. Nonetheless, under the circumstances of the
case, it is but proper that private respondent Crisostomo should be properly
compensated for the improvements he introduced in the fishpond.
Damages:
• Art. 1168 of the Civil Code provides that when an obligation "consists in not doing
and the obligor does what has been forbidden him, it shall also be undone at his
expense."
o Petitioner Keh led private respondent to unwittingly incur expenses to
improve the operation of the fishpond. By operation of law, therefore, NICO CRISOLOGO
Page 266 of 528

242 Investors Finance Corporation vs. Autoworld Sales Corporation and Pio ISSUES & ARGUMENTS
Barreto Realty Development Coporation| • W/N the contracts executed in lieu of the IPP a legitimate contract? Or was
Bellosillo J. it merely to conceal a usurious loan?
G.R. No. 128990, September 21, 2000 |

• Petitioner Finance (FNCB) is a private finance company and has been doing
business with Autoworld sales. It was a Usurious loan.
o Anthony Que, the president of autoworld and holds the same position as
well in Pio Realty, an affiliate of autoworld applied for a direct loan with • Petitioner admitted that its lawyers were the ones who drafted all the three (3)
petitioner contracts involved21 which were executed on the same day.22 Also, petitioner was
• Since the Usury law that time was still in place, petitioner said that it was not in the the one who procured the services of the Asian Appraisal Company to determine
business of direct selling, therefore the request was denied. the fair market value of the land to be sold way back in September of 1980 or six (6)
• But sometime thereafter, FNCB's Assistant Vice President, Mr. Leoncio Araullo, months prior to the sale.
informed Anthony Que that although it could not grant direct loans it could extend • Petitioner wrote a letter to Barreto stating on what to do with the money they got
funds to AUTOWORLD by purchasing any of its outstanding receivables at a from the sales by property of Barreto. If it was a sale, then BARRETTO, as seller,
discount. would have received the whole purchase price, and free to dispose of such proceeds
o After a series of negotiations the parties agreed to execute an Installment in any manner it wanted.
Paper Purchase ("IPP") transaction to enable AUTOWORLD to acquire • in its 17 November 1980 letter to BARRETTO, petitioner itself designated the
the additional capital it needed. The mechanics of the proposed "IPP" proceeds of the "IPP" transaction as a "loan."27 In that letter, petitioner stated that
transaction was the "loan proceeds" amounting to P6,980,000.00 would be released to BARRETTO
 First, Pio Barretto (BARRETTO) would execute a Contract to only upon submission of the documents it required.
Sell a parcel of land in favor of AUTOWORLD for • after the interest rate ceilings were lifted on 21 July 1981 petitioner extended on 18
P12,999,999.60 payable in sixty (60) equal monthly installments of June 1982 a direct loan of P3,000,000.00 to AUTOWORLD. This time however,
P216,666.66. Consequently, BARRETTO would acquire with no more ceiling rates to hinder it, petitioner imposed a 28% effective interest
P12,999,999.60 worth of receivables from AUTOWORLD rate on the loan.
 FNCB would then purchase the receivables worth P12,999,999.60 • In the case at bar, the attending factors surrounding the execution of the three (3)
from BARRETTO at a discounted value of P6,980,000.00 subject contracts on 9 February 1981 clearly establish that the parties intended to transact a
to the condition that such amount would be "flowed back" to usurious loan. These contracts should therefore be declared void.
AUTOWORLD • the stipulation on the interest is considered void thus allowing the debtor to claim
 BARRETTO, would in turn, execute a Deed of Assignment (in the whole interest paid.
favor of FNCB) obliging AUTOWORLD to pay the installments • In the instant case, AUTOWORLD obtained a loan of P6,980,000.00. Thereafter, it
of the P12,999,999.60 purchase price directly to FNCB paid nineteen (19) consecutive installments of P216,666.66 amounting to a total of
 Lastly, to secure the payment of the receivables under the Deed P4,116,666.54, and further paid a balance of P6,784,551.24 to settle it. All in all, it
of Assignment, BARRETTO would mortgage the property paid the aggregate amount of P10,901,217.78 for a debt of P6,980,000.00. For the
subject of the sale to FNCB. 23-month period of the existence of the loan covering the period February 1981 to
• Subsequently, the respondents again obtained a loan from petitioner for P3m, with January 1982, AUTOWORLD paid a total of P3,921,217.78 in interests. Applying
28% interest per anum the 12% interest ceiling rate mandated by the Usury Law, AUTOWORLD should
• After paying 19 installments, the respondents asked the petitioner for the status of have only paid a total of P1,605,400.00 in interests.38 Hence, AUTOWORLD is
their debt entitled to recover the whole usurious interest amounting to P3,921,217.78.
• Petitioner wrote back stating that they still owed petitioner around P10m
• Respondents did not agree with the computation, thus they reluctantly paid for the
said amount. Which in time, they asked the petitioner to refund them of their
overpayments.
JOFEE CUENCA
Page 267 of 528
243 Silvestre vs. Ramos | Davide 1995, which simply ordered the payment by the PASCUALs of the amount of P511,000
G.R. No. 144712. July 4, 2002 without interest thereon. No relief can be granted a party who does not appeal.
Therefore, the order of the trial court should stand.
FACTS
• The case at bar stemmed from the petition for consolidation of title or ownership
filed on 5 July 1993 with the trial court by herein respondent Ramos against herein
petitioners, Spouses Silvestre and Celia Pascual In his petition, RAMOS alleged that
on 3 June 1987, for and in consideration of P150,000, the PASCUALs executed in
his favor a Deed of Absolute Sale with Right to Repurchase over two parcels of land
and the improvements thereon located in Bambang, Bulacan, Bulacan,. This
document was annotated at the back of the title. The PASCUALs did not exercise
their right to repurchase the property within the stipulated one-year period; hence,
RAMOS prayed that the title or ownership over the subject parcels of land and
improvements thereon be consolidated in his favor.
• The PASCUALs admitted having signed the Deed of Absolute Sale with Right to
Repurchase for a consideration of P150,000 but averred that what the parties had
actually agreed upon and entered into was a real estate mortgage. They further
alleged that there was no agreement limiting the period within which to exercise the
right to repurchase and that they had even overpaid RAMOS.
• TC ruled in favor of Ramos. On the MR, the TC ruled that it erred in using an
interest rate of 7% per annum in the computation of the total amount of obligation
because what was expressly stipulated in the Sinumpaang Salaysay was 7% per month.
It lowered the interest rate to 5% pursuant to NCC Art 24
• The CA affirmed the TC’s ruling in toto. Hence this petition
ISSUES & ARGUMENTS

• W/N they are liable for 5% interest per month from 3 June 1987 to 3 April 1995.

CA decision AFFIRMED
It is a basic principle in civil law that parties are bound by the stipulations in the
contracts voluntarily entered into by them. Parties are free to stipulate terms and
conditions which they deem convenient provided they are not contrary to law, morals,
good customs, public order, or public policy.
With the suspension of the Usury Law and the removal of interest ceiling, the parties are
free to stipulate the interest to be imposed on loans. Absent any evidence of fraud,
undue influence, or any vice of consent exercised by RAMOS on the PASCUALs, the
interest agreed upon is binding upon them. This Court is not in a position to impose
upon parties contractual stipulations different from what they have agreed upon. We
cannot supplant the interest rate, which was reduced to 5% per month without
opposition on the part of RAMOS.
RAMOS’s claim that the interest due should earn legal interest cannot be acted
upon favorably because he did not appeal from the Order of the trial court of 5 June JAVIN OMPOC
Page 268 of 528

244 Wassmer vs. Velez | Bengzon
G.R. No. L-20089, December 26, 1964 | Petition DENIED. Lower court’s decision AFFIRMED.
FACTS
• Velez and Wassmer decided to get married and set the wedding day for September
4, 1954. On September 2, 1954, Velez left a note for Wassmer stating that the
wedding would have to be postponed because his mother opposes it, and that he
was leaving for his hometown.
• The next day, however, he sent her a telegram stating that nothing changed and that
he would be returning very soon. But then, Velez did not appear nor was he heard
from again.
• Wassmer sued him, and he was declared in default. Judgment was rendered ordering
Velez to pay actual damages, moral and exemplary damages, and attorney’s fees.
• Velez filed a petition for relief from judgment and motion for new trial and
reconsideration. Since he still failed to appear during the hearings set by the lower
court, and because his counsel had declared that there was no possibility for an
amicable settlement between the parties, the court issued an order denying his
petition. Hence this appeal. Dante Capuno was a member of the Boy Scouts
organization and a student of the Balintawak Elementary School. He attended a
parade in honor of Jose Rizal upon instruction of the city school’s supervisor. He
boarded a jeep, took hold of the wheel and drove it.
ISSUES & ARGUMENTS

• W/N Velez is liable to pay damages to Wassmer.
VELEZ LIABLE TO PAY DAMAGES.
• In support of his motion for new trial and reconsideration, Velez asserts that the
judgment is contrary to law because there is no provision in the Civil Code
authorizing an action for breach of a promise to marry. Moreover, the same thing
was declared by this court in the cases of Hermosisima and Estopa.
• It must not be overlooked, however, that the extent to which acts not contrary to
law may be perpetrated with impunity, is not limitless for Article 21 of the NCC
provides that “any person who willfully causes loss or injury to another in a manner
that is contrary to morals, good customs or public policy shall compensate the latter
for the damage.”
• Here, the invitations had already been printed out and distributed, and numerous
things had been purchased for the bride and for wedding. Bridal showers were given
and gifts had been received.
• Surely this is not a case of mere breach of promise to marry. To formally set a
wedding and go through all the preparation and publicity, only to walk out of it at
the last minute, is quite different. This is palpably and unjustifiably contrary to good
customs for which defendant must be held answerable for damages. CHRISSIE MORAL
Page 269 of 528

245 Gashem Shookat Baksh vs. CA and Marilou Gonzales| Davide, Jr. EMPLOYMENT.’ OBVIOUSLY THEN, HE WAS NOT AT ALL MOVED BY
G.R. No. 97336, February 19, 1933| GOOD FAITH AND AN HONEST MOTIVE. HIS PROFESSION OF LOVE
AND PROMISE TO MARRY WERE EMPTY WORDS INTENDED TO
FACTS DECEIVE MARILOU.
• Private respondent Marilou is a pretty 22 y/o Filipina of good moral character and
reputation. On the other hand, petitioner is an Iranian citizen taking up medicine at • The existing rule is that a breach of promise to marry per se is not an actionable
the Lyceum NW Colleges in Dagupan and residing at the Lozano Apartments. The wrong. Congress deliberately eliminated from the draft of the NCC the provisions
two met in Mabuhay Luncheonette where the former used to work. that would have made it so.
• Marilou filed a complaint for damages for the alleged violation of their agreement to • However, the same Code contains a provision, Art. 21, which is designed to expand
get married. She claimed that she accepted Gashem’s love on the condition that they the concept of torts or quasi-delict in this jurisdiction by granting adequate legal
would get married. She said she was a virgin before she began living with him. She remedy for the untold number of moral wrongs which is impossible for human
narrated that a week before the filing of the complaint, petitioner’s attitude towards foresight to specifically enumerate and punish in the statute books.
her started to change (i.e. he maltreated and threatened to kill her). Further, he • In the light of the above laudable purpose of Art. 21, where a man’s promise to
repudiated their marriage agreement and asked her not to live with him anymore. marry is in fact the PROXIMATE CAUSE of the acceptance of his love by a
• In his answer, petitioner denied proposing marriage or agreeing to be married. He woman and his representation to fulfill that promise thereafter becomes the
denied maltreating Marilou and asserted that the complaint is baseless. proximate cause of the giving of herself unto him in a sexual congress, proof that he
• Trial court, applying Art 21, ruled in favor of private respondent. It concluded that had, in reality, no intention of marrying her and that the promise was only a subtle
(a) Gashem and Marilou were lovers, (b) the latter is not a woman of loose morals scheme to entice or inveigle her to accept him and to obtain her consent to the
or questionable virtue who readily submits to sexual advances, (c) Gashem, thru sexual act, could justify the award of damages pursuant to Art 21. It is essential,
machinations, deceit and false pretenses, promised to marry private respondent, (d) however, that such injury should have been committed in a manner contrary to
because of his persuasive promise to marry her, she allowed herself to be morals, good customs or public policy. (Cause: Promise to Marry, Effect: Carnal
deflowered by him; (e) by reason of that deceitful promise, Marilou and her parents- Knowledge= Cause of Action: Criminal (RPC, Art 338) or Moral (NCC, Art 21)
in accordance with FIl customs and traditions- made some preparations for the Seduction, Damages Due: Moral and Actual (should there be any, such as expenses
wedding by looking for pigs and chickens, inviting friends and relatives and for the wedding preparations).
contracting sponsors, (f) Gashem did not fulfill his promise to marry her and (g)
such acts of Gashem, who is a foreigner and who has abused FIl hospitality, have
offended our sense of morality, good customs, culture and traditions.
• CA affirmed.
ISSUES & ARGUMENTS

• W/N damages may be recovered for a breach of promise to marry on the
basis of Article 21 of the Civil Code
o Petitioner: As an Iranian Moslem, he is not familiar with Catholic and
Christian ways. Even if he had a promise to marry, the subsequent failure
to fulfill the same is excusable or tolerable because of his Moslem
upbringing (apat nga pde nya pakasalan). Besides, his acts would not be
actionable because according to jurisprudence, mere breach of promise is
not actionable.
YES. IN THIS CASE, PETITIONER’S STATEMENTS REVEAL HIS TRUE

CHARACTER AND MOTIVE. HE HARBORS A CONDASCENDING, IF
NOT SARCASTIC REGARD FOR MARILOU ON ACCT OF HER BIRTH,
INFERIOR EDUCL BACKGROUND, POVERTY AND ‘DISHONORABLE DANI BOLONG
Page 270 of 528

246 Pecson vs. Court of Appeals| Davide
G.R. No. 115814, May 26, 1998 | 244 SCRA 407
FACTS
• Pecson was an owner of a commercial lot with a four-door two-storey apartment
building. For his failure to pay realty taxes, the lot was sold at a public action.
• It was bought by a certain Nepomuceno who in turn sold it to private respondents
Spouses Nuguid.
• Pecson challenged the sale but the trial court upheld such, excluding the apartment
building. The CA affirmed such decision, saying that there was no proof that the
building was included in the sale.
• Spouses Nuguid then filed for delivery of possession of the lot and building. Both
trial court and CA found Pecson to be a builder in good faith, and that Nuguid
should compensate him P53,000 for the cost of the building when he constructed it
in 1965.
ISSUES & ARGUMENTS
• W/N the basis for indemnity was correct
No, the computation of indemnity should be based on the current market value of
the apartment building
• Technically, Pecson could not be a builder in good faith as contemplated in the

relevant provisions of the civil code for he built the building when he was still the
valid owner of the lot. However, such provisions may be applied in analogy.
• The respondent court and the private respondents espouse the belief that the cost
of construction of the apartment building in 1965, and not its current market value,
is sufficient reimbursement for necessary and useful improvements made by the
petitioner. This position is, however, not in consonance with previous rulings of this
Court in similar cases.
• The objective of Article 546 of the Civil Code is to administer justice between the
parties involved. The said provision was formulated in trying to adjust the rights of
the owner and possessor in good faith of a piece of land, to administer complete
justice to both of them in such a way as neither one nor the other may enrich
himself of that which does not belong to him. Guided by this precept, it is therefore
the current market value of the improvements which should be made the basis of
reimbursement.
Case is remanded to trial court for proper determination of the current market value of the building.
MARICE PACHECO
Page 271 of 528

247 Security Bank and Trust Company vs. CA | guides for human conduct [that] should run as golden threads through society to the end
G.R. No. 117009. October 11, 1995| that law may approach its supreme ideal which is the sway and dominance of justice."
FACTS In the present case, petitioners' arguments to support absence of liability for the cost of
• Private respondent Ysmael C. Ferrer was contracted by herein petitioners Security construction beyond the original contract price are not persuasive.
Bank and Trust Company (SBTC) and Rosito C. Manhit to construct the building of
SBTC in Davao City for the price of P1,760,000.00. The contract provided that Hence, to allow petitioner bank to acquire the constructed building at a price far below
Ferrer would finish the construction in two hundred (200) working days. its actual construction cost would undoubtedly constitute unjust enrichment for the bank
Respondent Ferrer was able to complete the construction of the building within the to the prejudice of private respondent. Such unjust enrichment, as previously discussed,
contracted period but he was compelled by a drastic increase in the cost of is not allowed by law.
construction materials to incur expenses of about P300,000.00 on top of the original
cost. The additional expenses were made known to petitioner SBTC thru its Vice-
President Fely Sebastian and Supervising Architect Rudy de la Rama as early as
March 1980. Respondent Ferrer made timely demands for payment of the increased
cost. Said demands were supported by receipts, invoices, payrolls and other
documents proving the additional expenses.
• SBTC thru Assistant Vice-President Susan Guanio and a representative of an
architectural firm consulted by SBTC, verified Ferrer's claims for additional cost. A
recommendation was then made to settle Ferrer's claim but only for P200,000.00.
SBTC, instead of paying the recommended additional amount, denied ever
authorizing payment of any amount beyond the original contract price. SBTC
likewise denied any liability for the additional cost based on Article IX of the
building contract which states: If at any time prior to the completion of the work to
be performed hereunder, increase in prices of construction materials and/or labor
shall supervene through no fault on the part of the contractor whatsoever or any act
of the government and its instrumentalities which directly or indirectly affects the
increase of the cost of the project, OWNER shall equitably make the appropriate
adjustment on mutual agreement of both parties.
• Ysmael C. Ferrer then filed a complaint for breach of contract with damages.
ISSUES & ARGUMENTS

• W/N Ysmael Ferrer should be reimbursed for its additional expenses
incurred during the construction of the building.
Ysmael should be reimbursed for its additional expenses.
Art. 22. Every person who through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense of the latter
without just or legal ground, shall return the same to him.
The above-quoted article is part of the chapter of the Civil Code on Human Relations,
the provisions of which were formulated as "basic principles to be observed for the
rightful relationship between human beings and for the stability of the social order, . . .
designed to indicate certain norms that spring from the fountain of good conscience, . . . VP PADILLA
Page 272 of 528

248 Spouses Theis v CA | Hermosisima, Jr. mistake committed by the private respondent in selling parcel no. 4 to the
G.R. No. 126013. February 12, 1997 | petitioners falls within the second type. Verily, such mistake invalidated its consent
and as such, annulment of the deed of sale is proper
FACTS • Article 1390 of the Civil Code provides that contracts where the consent is vitiated
• Calson’s Development owned three lots in Tagaytay – Parcels Nos. 1, 2, and 3. by mistake are annullable. In order that mistake may invalidate consent, it should
Adjacent to parcel no. 3 was parcel no. 4, which was not owned by Calsons. refer to the substance of the thing which is the object of the contract, or to those
• Calson’s built a house on Parcel No. 3. In a subsequent survey, parcel no. 3, where conditions which have principally moved one or both parties to enter into the
the house was built, was erroneously indicated to be covered by the title to parcel no. contract. The concept of error includes: (1) ignorance, which is the absence of
1. Parcel nos. 2 and 3 were mistakenly surveyed to be located where parcel no. 4 was knowledge with respect to a thing; and (2) mistake, which is a wrong conception
located. about said thing, or a belief in the existence of some fact, circumstance, or event,
• Unaware of this mistake by which Calson’s appeared to be the owner of parcel no. 4, which in reality does not exist. In both cases, there is a lack of full and correct
Calson’s sold what it thought was parcel nos. 2 and 3 (but what was actually parcel knowledge about the thing.
no. 4) to the Theis spouses. Upon execution of the deed of sale, Calson’s delivered • In this case, Calson’s committed an error of the second type. This mistake
the certificates of title to parcel nos. 2 and 3 to the spouses. The spouses then went to invalidated its consent, and as such, annulment of the deed of sale is proper. The
Germany. error was an honest mistake, and the good faith of Calson’s is evident in the fact
• About three years later, they returned to Tagaytay to plan the construction of their that when the mistake was discovered, it immediately offered two other vacant lots
house. It was then that they discovered that parcel no. 4, which was sold to them, was to the spouses or to reimburse them with twice the amount paid.
owned by someone else, and that what was actually sold to them were parcel • Petitioners’ insistence in claiming parcel no. 3 on which stands a house whose value
nos. 2 and 3. The real parcel no. 3, however, could not have been sold to them since exceeds the price paid by them is unreasonable. This would constitute unjust
a house had already been built thereon by Calson’s even before the execution of the enrichment. Moreover, when the witness for the spouses testified, he stated that
contract, and its construction cost far exceeded the price paid by the spouses for the what was pointed out to the spouses was a vacant lot. Therefore, they could not
two parcels of land. have intended to purchase the lot on which a house was already built.
• The spouses insisted that they wanted parcel no. 4, but this was impossible,
since Calson’s did not own it. Calson’s offered them the real parcel nos. 1 and 2
instead since these were really what it intended to sell to the spouses. The spouses
refused and insisted that they wanted parcel nos. 2 and 3 since the TCTs to these lots
were the ones that had been issued in their name. Calson’s then offered to return
double the amount already paid by the spouses. The spouses still refused. Calson’s
filed an action to annul the contract of sale.
ISSUES & ARGUMENTS

• W/N Calson’s may rescind the contract on the ground of mistake
YES.
• Art. 1331. In order that mistake may invalidate consent, it should refer to the
substance of the thing which is the object of the contract, or to those conditions
which have principally moved one or both parties to enter into the contract."
• Tolentino explains that the concept of error in this article must include both
ignorance, which is the absence of knowledge with respect to a thing, and mistake
properly speaking, which is a wrong conception about said thing, or a belief in the
existence of some circumstance, fact, or event, which in reality does not exist. In
both cases, there is a lack of full and correct knowledge about the thing. The JON LINA
Page 273 of 528

249 Valarao v CA | Panganiban. • Spouses unmistakably reserved ownership of the land until full payment of the
G.R. No. 130347, March 3, 1999 | contract price. Therefore demand by judicial or notarial act is not needed.
FACTS • The facts unmistakably state that petitioners refused to accept payment attempts
made on December, their maid refused to accept the payment and even refused to
• Petitioners Valarao through their son as attorney-in-fact sold to respondent appear during the barangay hearings. Likewise, their past actuations of allowing the
Arrelano a parcel of land in Diliman, QC for Php 3.225 M under a deed of maid to receive payments precludes them from claiming that the maid had no
conditional sale. Vendee Arrellano was obligated to encumber a separate piece of authority as under Art. 1241 of the Civil Code states payment through a third
her property under mortgage for P2.225M in favor of petitioners and upon payment person is valid if by the creditor's conduct, debtor has been led to believe that the
the said mortgage will be void. The conditions also included that should respondent third person had authority to receive payment
fail to pay 3 successive installments or any one year end lump sum payment sale
shall be considered automatically rescinded and all payments made shall be forfeited • Intent of respondent to pay installments is clear. She is not only willing to pay the
in favor of petitioners. installments she has failed to pay but the entire residual amount. She even filed a
• Private respondent alleges she had already paid P2.028 M by September but motion to deposit albeit without actually depositing the amount in the courts. To
admitted failure to pay October and November installments of the same year (1990) allow petitioners to take the payments previously made would be inequitable.
respondent attempted to settle October and November installments along with her
December installment on December 30 and 31 but was turned down by petitioners' • Under the Maceda Law respondent is entitled to one month grace period for every
maid who had previously accepted the payments for them. Respondent attempted to year of payment. She therefore has a total grace period of three months from
reach the petitioners through the barangay but petitioners never appeared, Arrellano December 31, 1990. It would be unjust enrichment to allow petitioners to enforce
managed to contact the petitioners via phone but was told that they no longer would the automatic forfeiture clause.
be accepting payment and respondent should talk to their lawyer instead.
• Respondent consigned the amount to the court and petitioners filed a case against
respondent alleging that there was no attempt at payment and that they were
enforcing automatic rescission and forfeiture clause.
ISSUES & ARGUMENTS

• W/N Answer indicating willingness to accept amount due, failure to pay will
result in rescission, ordering respondent to vacate and turn-over possession
and asking for attorney's fees is equivalent to demand letter
• W/N Automatic forfeiture clause is binding on parties
• W/N Action for consignation will produce any effects without actual deposit
in court of amount
Notice either judicially or notarial act not needed in contracts to sell or

installments concerning real property
Automatic forfeiture clause is valid and binding however, petitioners cannot be
rewarded for failing to accept payment
Petitioners cannot enforce automatic forfeiture clause even without actual deposit
Rescission cannot be effected because of the Maceda Law
CHRIS PALARCA
Page 274 of 528

250 Grepalife vs. CA
In the year 1995, DBP foreclosed on the residential lot, in satisfaction of Leuterio’s
FACTS: outstanding loan.
A contract of group life insurance was executed between petitioner Great Pacific Life ISSUE:
Assurance Corporation (hereinafter Grepalife) and Development Bank of the Philippines Whether DBP may still collect on the insurance proceeds?
(hereinafter DBP). Grepalife agreed to insure the lives of eligible housing loan
mortgagors of DBP. RULING:
Dr. Wilfredo Leuterio, a physician and a housing debtor of DBP applied for membership NO
in the group life insurance plan. In an application form, Dr. Leuterio answered questions
concerning his health condition as follows: The insurance proceeds shall inure to the benefit of the heirs of the deceased person or
his beneficiaries. Equity dictates that DBP should not unjustly enrich itself at the expense
7. Have you ever had, or consulted, a physician for a heart condition, high blood pressure, of another (Nemo cum alterius detrimenio protest). Hence, it cannot collect the insurance
cancer, diabetes, lung; kidney or stomach disorder or any other physical impairment? NO proceeds, after it already foreclosed on the mortgage. The proceeds now rightly belong
to Dr. Leuterio's heirs represented by his widow, herein private respondent Medarda
8. Are you now, to the best of your knowledge, in good health? NO Leuterio.
On November 15, 1983, Grepalife issued Certificate No. B-18558, as insurance coverage
of Dr. Leuterio, to the extent of his DBP mortgage indebtedness amounting to eighty-six
thousand, two hundred (P86,200.00) pesos.
On August 6, 1984, Dr. Leuterio died due to "massive cerebral hemorrhage."

Consequently, DBP submitted a death claim to Grepalife. Grepalife denied the claim
alleging that Dr. Leuterio was not physically healthy when he applied for an insurance
coverage on November 15, 1983. Grepalife insisted that Dr. Leuterio did not disclose he
had been suffering from hypertension, which caused his death. Allegedly, such non-
disclosure constituted concealment that justified the denial of the claim.
The widow of the late Dr. Leuterio, respondent Medarda V. Leuterio, filed a complaint
with the Regional Trial Court of Misamis Oriental, Branch 18, against Grepalife for
"Specific Performance with Damages.
NOTE that the insured policy contains the following provision:
"In the event of the debtor's death before his indebtedness with the Creditor
[DBP] shall have been fully paid, an amount to pay the outstanding
indebtedness shall first be paid to the creditor and the balance of sum assured,
if there is any, shall then be paid to the beneficiary/ies designated by the
debtor."
When DBP submitted the insurance claim against petitioner, the latter denied payment
thereof, interposing the defense of concealment committed by the insured. Thereafter,
DBP collected the debt from the mortgagor and took the necessary action of foreclosure
on the residential lot of private respondent. BYRON PEREZ
Page 275 of 528
251 EPG Construction et al v. Vigilar | Buena • No. While "implied contracts", are void, in view of violation of applicable laws,
GR 131544 | March 16, 2001 auditing rules and lack of legal requirements,11 we nonetheless find the instant
petition laden with merit and uphold, in the interest of substantial justice, petitioners-
FACTS contractors' right to be compensated for the "additional constructions" on the
• In 1983, the Ministry of Human Settlement, through the BLISS Development public works housing project, applying the principle of quantum meruit
Corporation, initiated a housing project on a government property in Pasig • The illegality of the subject contracts proceeds from an express declaration or
City. Ministry of Human Settlement entered into a Memorandum of Agreement prohibition by law,16 and not from any intrinsic illegality. Stated differently, the
(MOA) with the Ministry of Public Works and Highways,where the latter subject contracts are not illegal per se.
undertook to develop the housing site and construct thereon 145 housing units. • The construction of the housing units had already been completed by
• By virtue of the MOA, the Ministry of Public Works and Highways forged petitioners-contractors and the subject housing units had been, since their
individual contracts with herein petitioners for the construction of the housing completion, under the control and disposition of the government pursuant to
units. Under the contracts, the scope of construction and funding therefor its public works housing project.
covered only around "2/3 of each housing unit.” After complying with the • Where payment is based on quantum meruit, the amount of recovery would only
terms of said contracts, and by reason of the verbal request and assurance of be the reasonable value of the thing or services rendered regardless of any
then DPWH Undersecretary Aber Canlas that additional funds would be agreement as to value
available and forthcoming, petitioners agreed to undertake and perform
"additional constructions"4 for the completion of the housing units, despite the
absence of appropriations and written contracts to cover subsequent expenses
for the "additional constructions."
• Petitioners then received payment for the construction work duly covered by
the individual written contracts, leaving the sum for the “additional
constructions” unpaid.
• Petitioners sent a demand letter to the DPWH Secretary and submitted that
their claim for payment was favorably recommended by DPWH Assistant
Secretary for Legal Services, who recognized the existence of implied contracts
covering the additional constructions. DPWH Assistant Secretary Madamba
opined that payment of petitioners' money claims should be based on quantum
meruit and should be forwarded to the Commission on Audit (COA) for its due
consideration and approval. COA returned the claim to DPWH for auditorial
action. On the basis of the Inspection Report of the Auditor's Technical Staff,
the DPWH Auditor interposed no objection to the payment of the money
claims subject to whatever action the COA may adopt.
• The documents were returned by COA to DPWH stating that funds should
first be made available before COA could pass upon and act on the money
claims. The Sec. of Budget and Management released the funds. However,
respondent Vigilar as DPWH Secretary denied the money claims.
ISSUE:
• W/N the "existence of appropriations and availability of funds as

certified to and verified by the proper accounting officials are conditions
sine qua non for the execution of government contracts.

AYEN QUA
Page 276 of 528

252 PADCOM vs. Ortigas Center| Davide HOLDING & RATIO DECIDENDI
G.R. No. 146807, May 9, 2002 |
YES.
FACTS • Under the Torrens system of registration, claims and liens of whatever character,
• Petitioner Padcom Condominium Corp (PADCOM) owns and manages the Padilla except those mentioned by law, existing against the land binds the holder of the title
Office Condominium Building (PADCOM Building) located at Emerald Avenue, and the whole world
Ortigas Center, Pasig City. The land on which the building stands was originally • It is undisputed that when the land in question was bought by PADCOM’s
acquired from the Ortigas & Co, Ltd Partnership (OCLP), by Tierra Development predecessor-in-interest, TDC, from OCLP, the sale bound TDC to comply with
Corporation (TDC) under a Deed of Sale. paragraph (G) of the covenants, conditions and restrictions of the Deed of Sale,
• Among the terms and conditions in the deed of sale was the requirement that the which provides for the automatic membership with the Association.
transferee and its successor-in-interest must become members of an association for • Moreover, Article 1311 of the Civil Code provides that contracts take effect
realty owners and long-term lessees in the area later known as the Ortigas Center. between the parties, their assigns and heirs. Since PADCOM is the successor-in-
Subsequently, the said lot, together with improvements thereon, was conveyed by interest of TDC, it follows that the stipulation on automatic membership with the
TDC in favor of PADCOM in a Deed of Transfer. Association is also binding on the former.
• In 1982, respondent Ortigas Center Association, Inc. (Association) was organized to • Art. 1159. Obligations arising from contracts have the force of law between the
advance the interests and promote the general welfare of the real estate owners and contracting parties and should be complied with in good faith.
long-term lessees of lots in the Ortigas Center. It sought the collection of • Assuming in gratis argumenti that PADCOM is not a member of the Association, it
membership dues in the amount of P2,724.40/month from PADCOM. cannot evade payment without violating the equitable principles underlying quasi-
• Corporate books showed that PADCOM owed the Association P639,961.47 contracts. Article 2142 of the Civil Code provides:
representing membership dues, interests and penalty charges from April 1983 to Art. 2142. Certain lawful, voluntary and unilateral acts give rise to the juridical
June 1993. relation of quasi-contract to the end that no one shall be unjustly enriched or
• Due to PADCOM’s failure and refusal to pay, the Association filed a complaint for benefited at the expense of another.
collection of sum of money. • Generally, it may be said that a quasi-contract is based on the presumed will or
• The Association averred that purchasers of lands within the Ortigas Center complex intent of the obligor dictated by equity and by the principles of absolute justice.
from OCLP are obligated under their contracts of sale to become members of the Examples of these principles are: (1) it is presumed that a person agrees to that
Association. This obligation was allegedly passed on to PADCOM when it bought which will benefit him; (2) nobody wants to enrich himself unjustly at the expense
the lot from TDC. of another; or (3) one must do unto others what he would want others to do unto
• PADCOM contended that it is a non-stock, non-profit association, and for it to him under the same circumstances.
become a special member of the Association, it should first apply for and be • As resident and lot owner in the Ortigas area, PADCOM was definitely benefited by
accepted for membership by the latter’s Board of Directors. No Automatic the Association’s acts and activities to promote the interests and welfare of those
membership was contemplated in its By-Laws.And it was not a member, it’s not who acquire property therein or benefit from the acts or activities of the
liable for dues. Association.
• The Trial Court dismissed the complaint. CA reversed and ruled that PADCOM
automatically became a member when TDC sold the lot to them. The intent to pass
the obligation to prospective transferees was evident from the annotation of the
same clause at the back of the TCT.
ISSUES & ARGUMENTS

• W/N PADCOM is an automatic member?
Petitioner: it cannot be compelled to be a member of the Association solely by virtue of
the "automatic membership" clause that appears on the title of the property and the
Deed of Transfer. In 1975, when it bought the land, the Association was still inexistent
and the provision on automatic membership is anticipatory in nature.
PAT FERNANDEZ
Page 277 of 528
253 David REYES v Jose LIM|Carpio procedure." Reyes adds the fact that the provisional remedies do not include
G.R. No. 134241 August 11, 2003 deposit is a matter of dura lex sed lex.

 REYES, the owner of a parcel land along FB Harrison Street along Pasay, was YES. ORDER TO DEPOSIT 10M IS PROPER.
then currently leasing the land to KENG, owner of Harrison Lumber.  The instant case, however, is precisely one where there is a hiatus in the law
 REYES later CONTRACTED TO SELL the same parcel of land to LIM for and in the Rules of Court. If left alone, the hiatus will result in unjust
28M enrichment to Reyes at the expense of Lim. The hiatus may also imperil
o DP: 10M restitution, which is a precondition to the rescission of the Contract to
o Balance: 18M by Mar 8, 1995, 930 am, deposited at the bank of choice Sell that Reyes himself seeks.
of the buyer provided:  This is not a case of equity overruling a positive provision of law or judicial rule
• if tenants leave before Mar 8, buyer will have 10 days from for there is none that governs this particular case. This is a case of silence or
notice to pay the balance insufficiency of the law and the Rules of Court. In this case, Article 9 of the
• if tenants leave beyond Mar 8, seller will pay penalty of 4% Civil Code expressly mandates the courts to make a ruling despite the "silence,
of 10M (4K)/ mo until the tenants leave obscurity or insufficiency of the laws." This calls for the application of equity,
 Keng was informed of the sale, but they refused to vacate by Mar 8. Reyes which "fills the open spaces in the law."
informed Keng that, despite delay in vacating the land, he will not pass the  The purpose of the exercise of equity jurisdiction in this case is to prevent
charge of 4K penalty to Keng. Later, Reyes filed a complaint claiming that unjust enrichment and to ensure restitution. Equity is the principle by
KENG and LIM connived: that KENG will not leave the premises until which substantial justice may be attained in cases where the prescribed or
penalty equals the remaining balance of 18M due from LIM. customary forms of ordinary law are inadequate.
 Keng and Lim denied that they intended to defraud Reyes. Keng, in his answer,  Reyes contends that he has the right to the 10M until the annulment of the
said that Reyes approved the extension of the lease since they found it difficult contract.
to move, although by March, they already started moving some of their stocks o Court said: To subscribe to Reyes’ contention will unjustly enrich
in the new Malabon location. Reyes at the expense of Lim. Reyes sold to Line One the Property
 Lim said that Reyes offered to return the 10M DP and cancel the contract to even before the balance of P18M under the Contract to Sell with Lim
sell since Reyes found it difficult to evict the lessee, but LIM rejected the offer. became due on 8 March 1995. On 1 March 1995, Reyes signed a Deed
LIM, instead went the RD to check the TCT of the lot. LIM learned that Reyes of Absolute Sale in favor of Line One. On 3 March 1995, the Register
already sold the lot on MARCH 1 to LINE ONE for 16.78M despite their of Deeds issued TCT No. 13476730 in the name of Line One. Reyes
subsisting contract to sell. cannot claim ownership of the P10M DP because Reyes had already
 Lim amended his answer and prayed for rescission and writ of preliminary sold to another buyer the Property for which Lim made the down
attachment. Attachment was denied. Lim asked for the 10M to be deposited to payment.
protect its dissipation while the case is pending. RTC granted. Reyes opposed  A court may not permit a seller to retain, pendente lite, money paid by a buyer
and filed and MR. MR denied. CA affirms RTC, hence this petition. if the seller himself seeks rescission of the sale because he has subsequently sold
the same property to another buyer.
ISSUES & ARGUMENTS  By seeking rescission, a seller necessarily offers to return what he has received
from the buyer. Thus to prevent unjust enrichment and ensure restitution, it
W/N depositing the 10M is proper given that it is not provided for in the ROC as a was proper for the court to place the money in judicial deposit.
remedy in cases of preliminary attachment?  There is unjust enrichment when a person unjustly retains a benefit to
 REYES: stresses the enumeration in the Rules is exclusive. Reyes argues the loss of another, or when a person retains money or property of
that a court cannot apply equity and require deposit if the law already another against the fundamental principles of justice, equity and good
prescribes the specific provisional remedies which do not include conscience. In this case, it was just, equitable and proper for the trial court to
deposit. Reyes invokes the principle that equity is "applied only in the order the deposit of the P10M DPto prevent unjust enrichment by Reyes at the
absence of, and never against, statutory law or x x x judicial rules of expense of Lim.
Petition denied. CA affirmed.
DIANE LIPANA
Page 278 of 528
254 UP vs. Philab Industries, Inc. | Callejo, Sr. • The CA erred in ruling that UP is liable to PHILAB based on the doctrine of unjust
G.R. No. 152411, September 29, 2004 | 439 SCRA 467 enrichment. Unjust enrichment claims do not lie simply because a party benefits
from the efforts or obligations of others. Instead, it must be shown that a party was
FACTS unjustly enriched meaning that enriched refers to being acquired illegally or
• UP decided to construct a Research Complex. As part of the project, laboratory unlawfully.
equipment and furniture were purchased for the BIOTECH at UP Los Banos. The • Moreover, to substantiate a claim for unjust enrichment, the claimant must
Ferdinand E. Marcos Foundation (FEMF) agreed to fund and donate money for the unequivocally prove that another party knowingly received something of value to
project. which he was not entitled and that the state of affairs are such that it would be
• BIOTECH arranged for PHILAB to fabricate the laboratory furniture and unjust for the person to keep the benefit. To be entitled to remuneration, one must
equipment and deliver the same to BIOTECH, but for the account of FEMF. confer benefit by mistake, fraud, coercion, or request.
• BIOTECH requested the issuance of a purchase order and downpayment from • Article 22, NCC: Every person who, through an act or performance by another, or
FEMF, assuring it that the contract would be prepared ASAP before their issuance. any other means, acquires or comes into possession of something at the expense of
• However, PHILAB failed to submit the contract. Instead, they submitted an the latter without just or legal ground, shall return the same to hin.
accomplishment report on the project. Nevertheless, it made partial deliveries to • Essential elements of unjust enrichment: (1) the defendant has been enriched, (2)
BIOTECH, and FEMF made 2 remittances to PHILAB, for which the latter issued the plaintiff has suffered a loss, (3) the enrichment of the defendant is without just
official receipts. or legal ground, and (4) the plaintiff has no other action based on contract, quasi-
• Later, when PHILAB submitted the final bill to BIOTECH, FEMF failed to pay for contract, crime or quasi-delict. An action in rem reverso is considered merely an
the same. Despite having reiterated its request for payment, PHILAB did not auxiliary action.
receive anything from FEMF. Thus, it wrote BIOTECH appealing for payment. • Unjust enrichment is not present in this case. PHILAB had a remedy against FEMF
• At this time, Marcos was ousted because of the EDSA revolution. PHILAB then via an action based on an implied-in-fact contract. UP (BIOTECH) legally acquired
also requested President Cory Aquino to help secure the payment due from FEMF. the laboratory furniture under the MOA with FEMF. Hence, it is entitled to keep
Eventually, the request was forwarded to PCGG, which in turn requested UP to such furniture.
furnish it with a copy of the relevant contract and the MOA. However, PCGG was
told that there was no contract executed between PHILAB and FEMF. Petition GRANTED. CA reversed and set aside.
• PHILAB filed a complaint for sum of money against UP. The latter denied liability,
alleging that PHILAB had no cause of action against it because it was merely the
donee/beneficiary of the laboratory furniture, and that the FEMF was the one liable
for the purchase price.
• The TC dismissed the complaint without prejudice to any recourse that PHILAB
might have against FEMF. However, the CA reversed and held UP liable to
PHILAB to prevent unjust enrichment. Hence this petition.
ISSUE AND ARGUMENTS
W/N UP is liable to pay PHILAB for the laboratory equipment and furniture.
UP IS NOT LIABLE.
• PHILAB has not shown that UP ever obliged itself to pay for the laboratory
furniture. Moreover, UP is right in saying that there was an implied-in-fact contract
entered into between PHILAB and FEMF.
• PHILAB was aware that it was FEMF who was to pay for the same, and that UP
was merely the donee-beneficiary. From the inception, FEMF paid all the bills, for
CHRISSIE MORAL
which PHILAB unconditionally issued official receipts.
Page 279 of 528
Petitioner was in delay and in breach of contract. Clearly, the obligor is liable for
255 H.L. Carlos Construction v. MPC damages that are the natural and probable consequences of its breach of obligation. In
G.R. No. 137147. January 29, 2002 order to finish the project, the latter had to contract the services of a second
construction firm for P11,750,000. Hence, MPC suffered actual damages in the amount
FACTS of P4,604,579 for the completion of the project.
 MARINA PROPERTIES CORPORATION (MPC for brevity) is engaged in
the business of real estate development. It entered into a contract with H.I. Petitioner is also liable for liquidated damages as provided in the Contract.
CARLOS CONSTRUCTION, INC. (HLC) to construct Phase III of a
condominium complex called MARINA BAYHOMES CONDOMINIUM Liquidated damages are those that the parties agree to be paid in case of a breach. As
PROJECT, consisting of townhouses and villas, totaling 31 housing units, for a worded, the amount agreed upon answers for damages suffered by the owner due to
total consideration of P38,580,609.00, within a period of 365 days from receipt delays in the completion of the project. Under Philippine laws, these damages take the
of ‘Notice to Proceed’. The original completion date of the project was May 16, nature of penalties. A penal clause is an accessory undertaking to assume greater liability
1989, but it was extended to October 31, 1989 with a grace period until in case of a breach. It is attached to an obligation in order to ensure performance.
November 30, 1989.
 “The contract was signed by Jovencio F. Cinco, president of MPC, and
Honorio L. Carlos, president of HLC.
 “On December 15, 1989, HLC instituted this case for sum of money against
not only MPC but also against the latter’s alleged president, [Respondent] Jesus
K. Typoco, Sr. (Typoco) and [Respondent] Tan Yu (Tan), seeking the payment
of various sums with an aggregate amount of P14 million pesos, broken down
as follows:
a. P7,065,885.03 for costs of labor escalation, change orders and material
price escalation;
ISSUES & ARGUMENTS

W/N H.L. is liable for actual and liquidated damages for failing to finish the construction
it undertook to complete ( Which party was in delay)
Yes. petitioner did not fulfill its contractual obligations. It could not totally pass the
blame to MPC for hiring a second contractor, because the latter was allowed to terminate
the services of the contractor.
Either party shall have the right to terminate this Contract for reason of violation or
non-compliance by the other party of the terms and conditions herein agreed upon.”
As of November 1989, petitioner accomplished only approximately 80 percent of the

project. In other words, it was already in delay at the time. In addition, Engineer
Miranda testified that it would lose money even if it finished the project; thus,
respondents already suspected that it had no intention of finishing the project at all.
MAGIC MOVIDO
Page 280 of 528

256 People vs. Baylon | Fernando, J.: • To establish an alibi, the accused must show that he was at another place for such
G.R. No. L-35785, May 29, 1974 | 57 SCRA 1974 period of time that it was impossible for him to have been at the place where the
crime was committed at the time of its commission
FACTS • Time and time again, this Court had correctly observed that no woman, especially
• Susana Aspili is only 13 years of age at the time of the alleged crime. one of tender age, would willingly expose herself to the embarrassment of a public
• She testified that as a 1st year high school student, she used to commute from the trial wherein she would have not only to admit but also to narrate the violation of
barrio where she lived to the poblacion, about 4 km away from where she lived, her person, if such indeed were not the case.
where the Batac Institute is located o Far better it is in not a few cases to spare herself the humiliation if
• On March 15, 1965, at about 5am, she was on her way to school for her 7:30 class there be some other way of bringing the offender to justice
• As she was nearing the barrio school of Colo, appellant Domiciano Baylon suddenly o Here, there was such a testimony coming from the offended party,
emerged from the thicket on the left side of the road, embraced her, and at the same firm, categorical, straight-forward
time pulled her towards him o Her clothing, including the most intimate garments, soiled and
• She shouted for help but her mouth was covered by appellant’s palm smudged, ripped and torn, were mute witnesses of the futile resistance
• There was a struggle but at the end, appellant successfully accomplished his carnal she put up.
desires against the victim o It is quite a strain on one’s credulity to believe that under such
• Susana then hurried back home to tell her mother what happened. Her mother then circumstances, the young girl’s honor remained unsullied, the
told her father about the incident nefarious design unfulfilled
• Both her mother and father later went to the house of Juan Asuncion (barangay • The state, as parens patriae, is under the obligation to minimize the risk of harm
captain) to those, who, because of their minority, are as yet unable to take care of
o Asuncion went to their house to interview Susana and he accompanied themselves fully
them to the house of Fidel Ramos (barrio councilor), who then called for o Those of tender years deserve its utmost protection
Baylon for an inquiry o Moreover, the injury in cases of rape is not inflicted on the
• Baylon exercised his right to remain silent until advised by his counsel unfortunate victim alone
• Upon the testimonies of the following, Baylon was found guilty by the court: o The consternation it causes her family must also be taken into account
o Dr. Ofelia Agabin Flor – resident physician of the Provincial Hospital of o It may reflect a failure to abide by the announced concern in the
Ilocos Norte, who conducted on the very same day the medical fundamental law for such institution
examination
o Aquilino Gamiao – a member of the police force of Batac, Ilocos Norte,
with 16 years of experience behind him, who investigated the matter
o Monica Lagmay Aspili – mother of the offended party
• The appellant now comes to this court praying for a reversal of the finding of guilt
against him
ISSUES & ARGUMENTS

• W/N Baylon may be acquitted on the basis of his defense of alibi
NO.
• The determination by the trial judge who could with and appraise the testimony as
to the facts duly proven is entitled to the highest respect, absent a showing that he
ignored or disregarded circumstances of weight or influence to call for a different
conclusion
CHRISTINE OCAMPO
Page 281 of 528

257 Clarita Cruz vs. NLRC | Paras protection of our overseas workers is especially necessary because of the
G.R. No. 98273, October 28, 1991 inconveniences and even risks they have to undergo in their quest for a better life in
a foreign land away from their loved ones and their own government.
FACTS
• Clarita V. Cruz went abroad pursuant to an employment contract that she hoped • The domestic helper is particularly susceptible to abuse because she usually works
would improve her future. Although a high school graduate, she agreed to work as a only by herself in a private household unlike other workers employed in an open
domestic helper in Kuwait business concern who are able to share and discuss their problems and bear or solve
• After her two-year contract, she came back highly aggrieved and filed a complaint them together. The domestic helper is denied that comfort. She has no companions
against EMS Manpower and Placement Services (Phil.) and its foreign principal, for in her misery. She usually broods alone. There is no one to turn to for help. That is
underpayment of her salary and non-payment of her vacation leave. why we must carefully listen to her when she is finally able to complain against those
• She alleged that her foreign employer treated her as a slave and required her to work who would rob her of her just rewards and even of her dignity as a human being.
18 hours a day. She was beaten up and suffered facial deformity, head trauma and
decreased sensation in the right portion of her body and was paid only $120 per NLRC resolutions set aside. Affidavit of Desistance declared null and void. Case remanded to POEA.
month and her total salaries were given to her only three hours before her flight
back to Manila.
• This was after the plane she was supposed to take had left and she had to stay in the
airport for 24 hours before her employer finally heard her pleas and delivered her
passport and ticket to her.
• In its answer and position paper, the private respondent raised the principal defense
of settlement as evidenced by an Affidavit of Desistance, by virtue of which, POEA
dismissed her claim, and such was upheld by NLRC
• Petitioner faults the POEA and the NLRC with grave abuse of discretion for having
upheld the Affidavit of Desistance.
• Cruz rejects the settlement as having been obtained from her under duress and false
pretenses.
• Her contention is that she was inveigled into signing the Affidavit of Desistance
without the assistance of counsel. The "Attorney" Alvarado who assisted her was
not really a lawyer but only a helper in the Overseas Workers Welfare
Administration. Atty. Biolena, on the other hand, merely acknowledged the
document.
• Moreover, when she signed the affidavit, she was under the impression when she
was agreeing to settle only her claim for one month unpaid vacation leave, as the
wording of the receipt she issued on the same date showed.
• Private respondent argues that the petitioner is bound by her Affidavit of
Desistance.
ISSUES & ARGUMENTS

• W/N petitioner can still collect from her agency despite of the affidavit of
desistance.
Yes
• This decision demonstrates once again the tenderness of the Court toward the
worker subjected to the lawless exploitation and impositions of his employer. The TIN OCAMPO-TAN
Page 282 of 528

258 St Louis Realty vs CA and Aramil appeared in the Manila Times issues rectification of the same ad that appeal of
December 15, 1968 and January 5, 1969 wherein a photo of the house of
FACTS another Brookside Homeowner (Dr. Aramil-private respondent) was
• This case is about the recovery of damages for a wrongful advertisement in the mistakenly used as a background for the featured homeowner's the Arcadio
Sunday Times where Saint Louis Realty Corporation misrepresented that the house of family.
Doctor Conrado J. Aramil belonged to Arcadio S. Arcadio. The ad of March 18, 1969 shows the Arcadio family with their real house in the
• The same advertisement appeared in the Sunday Times dated January 5, 1969. Doctor background, as was intended all along.
Aramil a neuropsychiatrist and a member of the faculty of the U. E. Ramon • Judge Jose M. Leuterio observed that St. Louis Realty should have immediately
Magsaysay Memorial Hospital, noticed the mistake. On that same date, he wrote St. published a rectification and apology. He found that as a result of St. Louis Realty's
Louis Realty the following letter of protest: mistake, magnified by its utter lack of sincerity, Doctor Aramil suffered mental
This is anent to your advertisements appearing in the December 15, 1968 and anguish and his income was reduced by about P1,000 to P1,500 a month. Moreover,
January 5, 1969 issues of the Sunday Times which boldly depicted my house at there was violation of Aramil's right to privacy (Art. 26, Civil Code).
the above-mentioned address and implying that it belonged to another person. I
am not aware of any permission or authority on my part for the use of my house for ISSUES & ARGUMENTS
such publicity. • W/N St Louis Realty liable for damages
This unauthorized use of my house for your promotional gain and much more the apparent
distortions therein are I believe not only transgression to my private property but also HOLDING & RATIO DECIDENDI
damaging to my prestige in the medical profession I have had invited in several occasions
numerous medical colleagues, medical students and friends to my house and after reading your YES, St Louis Realty liable for damages
December 15 advertisement some of them have uttered some remarks purporting doubts as to • St. Louis Realty committed an actionable quasi-delict under articles 21 and 26
my professional and personal integrity. Such sly remarks although in light vein as "it looks of the Civil Code because the questioned advertisements pictured a beautiful
like your house," "how much are you renting from the Arcadios?", " like your wife portrayed house which did not belong to Arcadio but to Doctor Aramil who, naturally,
in the papers as belonging to another husband," etc., have resulted in no little mental anguish was annoyed by that contretemps.
on my part. • St. Louis Realty contends that the decision is contrary to law and that the case
I have referred this matter to the Legal Panel of the Philippine Medical Association and was decided in a way not in conformity with the rulings of this Court. It argues
their final advice is pending upon my submission of supporting ownership papers. that the case is not covered by article 26 which provides that "every person
I will therefore be constrained to pursue court action against your corporation unless you shall respect the dignity, personality, privacy and peace of mind of his
could satisfactorily explain this matter within a week upon receipt of this letter. neighbors and other persons". "Prying into the privacy of another's residence"
and "meddling with or disturbing the private life or family relations of another"
• The letter was received by Ernesto Magtoto, an officer of St. Louis Realty in charge and "similar acts", "though they may not constitute a criminal offense, shall
of advertising. He stopped publication of the advertisement. He contacted produce a cause of action for damages, prevention and other relief".
Doctor Aramil and offered his apologies. However, no rectification or apology • The damages fixed by Judge Leuterio are sanctioned by Articles 2200, 2208 and
was published. 2219 of the Civil Code. Article 2219 allows moral damages for acts and actions
• On February 20, 1969, Aramil's counsel demanded from St. Louis Realty actual, mentioned in Article 26. As lengthily explained by Justice Gatmaitan, the acts
moral and exemplary damages of P110,000 (Exh. D). In its answer dated March 10, and omissions of the firm fan under Article 26.
St. Louis Realty claimed that there was an honest mistake and that if Aramil so • St. Louis Realty's employee was grossly negligent in mixing up the Aramil and
desired, rectification would be published in the Manila Times Arcadio residences in a widely circulated publication like the Sunday Times. To
• It published in the issue of the Manila Times of March 18, 1969 a new advertisement suit its purpose, it never made any written apology and explanation of the mix-
with the Arcadio family and their real house. But it did not publish any apology to up. It just contented itself with a cavalier "rectification ".
Doctor Aramil and an explanation of the error. • Persons, who know the residence of Doctor Aramil, were confused by the
• On March 29, Aramil filed his complaint for damages. St. Louis Realty published in distorted, lingering impression that he was renting his residence from Arcadio
the issue of the Manila Times of April 15, 1969 the following "NOTICE OF or that Arcadio had leased it from him. Either way, his private life was
RECTIFICATION" in a space 4 by 3 inches: mistakenly and unnecessarily exposed. He suffered diminution of income and
This will serve as a notice that our print ad 'Where the Heart is' which appeared mental anguish.
in the Manila Times issue of March 18, 1969 is a rectification of the same ad that FRANK TAMARGO
Page 283 of 528
259 Castro Vs. People of the Philippines| Corona OSG can assail the said judgment in a petition for certiorari establishing that the
G.R. No. 180832, July 23, 2008| State was deprived of a fair opportunity to prosecute and prove its case.
• The rationale behind this exception is that a judgment rendered by the trial court
FACTS with grave abuse of discretion was issued without jurisdiction. It is, for this reason,
• Justin Albert was the son of Mr. Tan. void. Consequently, there is no double jeopardy.
• Justin was a Grade 12 student of Reedley International School (RIS). He was • In this case, the OSG merely assailed the RTC's finding on the nature of petitioner's
dismissed for violating the rules of his probation statement, that is, whether it constituted grave or slight oral defamation. The OSG
• Tan requested for a reconsideration and RIS imposed non-appealable conditions premised its allegation of grave abuse of discretion on the RTC's "erroneous"
such as not allowing Albert to participate in the graduation ceremonies. evaluation and assessment of the evidence presented by the parties.
• Tan filed a complaint in the DepEd, claiming malice and bad faith • What the OSG therefore questioned were errors of judgment (or those involving
• DepEd nullified RIS sanctions as unreasonable and a denial of due process. DepEd misappreciation of evidence or errors of law). However, a court, in a petition for
orders readmission of Albert without any conditions. certiorari, cannot review the public respondent's evaluation of the evidence and
• Albert finally participated in the graduation ceremonies. factual findings. Errors of judgment cannot be raised in a Rule 65 petition as a writ
• After the graduation ceremonies, Tan talked to a fellow parent Ching, intimating his of certiorari can only correct errors of jurisdiction (or those involving the
contemplating suit against officers of RIS in their personal capacities, including Asst. commission of grave abuse of discretion).
Headmaster Castro. • Because the OSG did not raise errors of jurisdiction, the CA erred in taking
• Ching relayed the information to Castro. At the end of the conversation, Castro said cognizance of its petition and, worse, in reviewing the factual findings of the RTC.
“be careful talking to Tan, that’s dangerous” We therefore reinstate the RTC decision so as not to offend the constitutional
• Ching then relayed the information to Tan, and Tan filed a grave oral defamation prohibition against double jeopardy.
suit against Castro. • At most, petitioner could have been liable for damages under Article 26 of the Civil
• MetC ruling: December 2005, Castro was guilty Code[:
• RTC ruling: Action had prescribed, as action was filed 5 months after discovery • Article 26. Every person shall respect the dignity, personality, privacy and peace of
(should have been within 4 months). But held guilty of only slight oral defamation. mind of his neighbors and other persons. The following and similar acts, though
• SolGen: RTC misinterpreted the facts and should not have lowered the offense to they may not constitute a criminal offense, shall produce a cause of action for
slight oral defamation only. damages, prevention and other relief:
• CA: Reinstate MeTC ruling. xxx xxx xxx
(3) Intriguing to cause another to be alienated from his friends;
xxx xxx xxx
ISSUES & ARGUMENTS • Petitioner is reminded that, as an educator, he is supposed to be a role model
• W/N petitioner can still be held liable, or has double jeopardy set in? for the youth. As such, he should always act with justice, give everyone his due
and observe honesty and good faith.
NO. PETITIONER CANNOT BE HELD LIABLE AS DOUBLE JEOPARDY

HAS SET IN.
• double jeopardy occurs upon (1) a valid indictment (2) before a competent court (3)
after arraignment (4) when a valid plea has been entered and (5) when the accused
was acquitted or convicted or the case was dismissed or otherwise terminated
without the express consent of the accused. Thus, an acquittal, whether ordered by
the trial or appellate court, is final and unappealable on the ground of double
jeopardy.
• The only exception is when the trial court acted with grave abuse of discretion or, as
we held in Galman v. Sandiganbayan, when there was mistrial. In such instances, the
FRANK TAMARGO
Page 284 of 528

260 Tenchavez vs. Ecano| JBL Reyes her present husband, Russell Leo Moran; while her parents denied that they had
G.R. No. L-19671 November 29, 1965| 15 SCRA 355 in any way influenced their daughter's acts, and counterclaimed for moral
damages.The appealed judgment did not decree a legal separation, but freed the
FACTS plaintiff from supporting his wife and to acquire property to the exclusion of
• Direct appeal, on factual and legal questions, from the judgment of the Court his wife. It allowed the counterclaim of Mamerto Escaño and Mena Escaño for
of First Instance of Cebu, denying the claim of the plaintiff-appellant, Pastor B. moral and exemplary damages and attorney's fees against the plaintiff-appellant,
Tenchavez, for legal separation and one million pesos in damages against his to the extent of P45,000.00, and plaintiff resorted directly to this Court.
wife and parents-in-law, the defendants-appellees, Vicente, Mamerto and Mena,
all surnamed "Escaño," respectively
• Missing her late afternoon classes on 24 February 1948 in the University of San ISSUES & ARGUMENTS
Carlos, Cebu City, where she was then enrolled as a second year student of • W/N Vicenta’s parents are liable for damages
commerce, Vicenta Escaño, 27 years of age (scion of a well-to-do and socially
prominent Filipino family of Spanish ancestry and a "sheltered colegiala"), HOLDING & RATIO DECIDENDI
exchanged marriage vows with Pastor Tenchavez, 32 years of age, an engineer, • No. There is no evidence that the parents of Vicenta, out of improper motives,
ex-army officer and of undistinguished stock, without the knowledge of her aided and abetted her original suit for annulment, or her subsequent divorce;
parents, before a Catholic chaplain, Lt. Moises Lavares, in the house of one she appears to have acted independently, and being of age, she was entitled to
Juan Alburo in the said city. The marriage was the culmination of a previous judge what was best for her and ask that her decisions be respected. Her
love affair and was duly registered with the local civil register. parents, in so doing, certainly cannot be charged with alienation of affections in
• Her parents were disgusted when they found out about the marriage and the absence of malice or unworthy motives, which have not been shown, good
considered a Re-celebration of the marriage as they believed it to be invalid. faith being always presumed until the contrary is proved.
The re-celebration never took place. • Plaintiff Tenchavez, in falsely charging Vicenta's aged parents with racial or
• On 24 June 1950, without informing her husband, Vicenta applied for a social discrimination and with having exerted efforts and pressured her to seek
passport, indicating in her application that she was single, that her purpose was annulment and divorce, unquestionably caused them unrest and anxiety,
to study, and she was domiciled in Cebu City, and that she intended to return entitling them to recover damages. While this suit may not have been impelled
after two years. The application was approved, and she left for the United by actual malice, the charges were certainly reckless in the face of the proven
States. facts and circumstances. Court actions are not established for parties to give
• On 22 August 1950, she filed a verified complaint for divorce against the herein vent to their prejudices or spleen.
plaintiff in the Second Judicial District Court of the State of Nevada in and for
the County of Washoe, on the ground of "extreme cruelty, entirely mental in
character." On 21 October 1950, a decree of divorce, "final and absolute", was
issued in open court by the said tribunal.
• In 1951 Mamerto and Mena Escaño filed a petition with the Archbishop of
Cebu to annul their daughter's marriage to Pastor (Exh. "D"). On 10 September
1954, Vicenta sought papal dispensation of her marriage (Exh. "D"-2).
• On 13 September 1954, Vicenta married an American, Russell Leo Moran, in
Nevada. She now lives with him in California, and, by him, has begotten
children. She acquired American citizenship on 8 August 1958.
• But on 30 July 1955, Tenchavez had initiated the proceedings at bar by a
complaint in the Court of First Instance of Cebu, and amended on 31 May
1956, against Vicenta F. Escaño, her parents, Mamerto and Mena Escaño,
whom he charged with having dissuaded and discouraged Vicenta from joining
her husband, and alienating her affections, and against the Roman Catholic
Church, for having, through its Diocesan Tribunal, decreed the annulment of
the marriage, and asked for legal separation and one million pesos in damages.
Vicenta claimed a valid divorce from plaintiff and an equally valid marriage to DEANNE REYES
Page 285 of 528
261 Concepcion vs. Court of Appeals and Sps. Nicolas | Bellosillo
GR. No.- 120706, January 31, 2000 | 324 SCRA 84 HOLDING & RATIO DECIDENDI
FACTS YES. THE VIOLATIONS MENTIONED IN ARTS. 26 AND 2219 ARE NOT
• Florence Concepcion was the lessor of the Nicolas spouses (Nestor and Allem). She EXCLUSIVE BUT ARE MERELY EXAMPLES AND DO NOT PRECLUDE
was also a contributor of capital to the latter’s business. One day, Rodrigo OTHER SIMILAR OR ANALOGOUS ACTS.
Concepcion, brother of the deceased husband of Florence, angrily accosted Nestor • Damages are allowable for actions against a person’s dignity, such as profane,
and accused him of conducting an adulterous relationship with Florence. In front of insulting, humiliating, scandalous or abusive language. Under Art. 2217 of the Civil
Nestor’s children and friends, Rodrigo shouted “Hoy Nestor, kabit ka ni Bing! x x x Code, moral damages which include physical suffering, mental anguish, fright,
Binigyan ka pala ni Bing Concepcion ng P100,000.00 para umakyat ng Baguio. serious anxiety, besmirched reputation, wounded feelings, moral shock, social
Pakaakyat mo at ng asawa mo doon ay bababa ka uli para magkasarilinan kayo ni humiliation and similar injury, although incapable of pecuniary computation, may be
Bing.” Worse, Rodrigo hurled the same accusation when he and Nestor confronted recovered if they are proximate result of the defendant’s wrongful act or omission.
Florence. • There is no question that Nestor suffered mental anguish, besmirched reputation,
• Because of said incidents, Nestor felt extreme embarrassment and shame to the wounded feelings and social humiliation as a proximate result of petitioner’s abusive,
extent that he could no longer face his neighbors. Florence also ceased to do scandalous and insulting language.
business with him by not contributing capital. Consequently, the business venture of
the Nicolas spouses declined as they could no longer cope with their commitments
to their clients and customers. To make matters worse, Allem started to doubt Petition DENIED. Court of Appeals’ decision AFFIRMED.
Nestor’s fidelity resulting in frequent bickerings and quarrels during which Allem DANI BOLONG
even expressed her desire to separate.
• Nestor was then forced to write Rodrigo, demanding public apology and payment of
damages. Due to the latter’s inaction, the spouses filed a civil suit for damages.
• Trial Court ruled in favor of the spouses and ordered payment of moral and
exemplary damages. CA affirmed.
ISSUES & ARGUMENTS

• W/N there is legal basis for the award of damages.
Petitioner: The alleged act imputed to him does not fall under Art. 2613 and
221914 of the Civil Code since it does not constitute libel, slander or any other form of
defamation. He only desired to protect the name and reputation of the Concepcion
family, which was why he sought an appointment with Nestor through Florence’s son
Roncali to ventilate his feelings about the matter.
13
Art. 26. Every person shall respect the dignity, personality, privacy and peace of mind of his
neighbors and other persons. The following and similar acts, though they may not constitute a criminal
offense, shall produce a cause of action for damages, prevention and other relief:
(1) Prying into the privacy of another's residence: (2) Meddling with or disturbing the private life or
family relations of another; (3) Intriguing to cause another to be alienated from his friends; (4) Vexing
or humiliating another on account of his religious beliefs, lowly station in life, place of birth, physical
defect, or other personal condition.
14
Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3)
Seduction, abduction, rape, or other lascivious acts; (4) Adultery or concubinage; (5) Illegal or arbitrary
detention or arrest; (6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious
prosecution; (9) Acts mentioned in Article 309; (10) Acts and actions referred to in Articles 21, 26, 27, DANI BOLONG
28, 29, 30, 32, 34, and 35 X X X X
Page 286 of 528
262 Navarrete vs. CA
FACTS
Petitioner is a lawyer and one of defendants in a Case for annulment of a “Deed of Sale
with right to Repurchase and Damages” alleging that his signature was forged in the aid
transaction. He now, challenges the lower court’s denial of his claims and further avers
that the private respondent imputed malicious comments upon him (i.e.
“bastard”,”swindler”,”plunderer”, etc.) during the trial that warrants additional
compensatory pay (damages) including attorney’s fees. CA affirmed the dismissal of the
lower court.
ISSUE
Whether private respondent is liable for damages?

No. It is a well settled principle that statements made during the course of judicial
proceedings are absolutely privileged. This remains despite the defamatory tenor if the
same is relevant, material and pertinent to the inquiry. Such were relevant to the
allegations made and shows disaffection to the adversary. Moreover, the imputations
were not directly made to him. They were generic for the parties.
JOY ADRANEDA
Page 287 of 528

263 Marquez vs. Desierto | Pardo, J. (MCs), as shown at its dorsal portion and as cleared by the Philippines Clearing
G.R. No. 135882, June 27, 2001 | 359 SCRA 772 House, not the International Corporate Bank.
• Notwithstanding the facts that the checks were payable to cash or bearer,
FACTS nonetheless, the name of the depositor(s) could easily be identified since the account
• Sometime in May 1998, petitioner Marquez received an Order from the numbers x x x where said checks were deposited are identified in the order.
Ombudsman Aniano A. Desierto dated April 29, 1998, to produce several bank • Even assuming that the accounts xxx were already classified as “dormant accounts,”
documents for purposes of inspection in camera relative to various accounts the bank is still required to preserve the records pertaining to the accounts within a
maintained at Union Bank of the Philippines, Julia Vargas Branch, where petitioner certain period of time as required by existing banking rules and regulations.
is the branch manager. The accounts to be inspected are Account Nos. 011-37270, • And finally, the in camera inspection was already extended twice from May 13, 1998
240-020718, 245-30317-3 and 245-30318-1, involved in a case pending with the to June 3,1998 thereby giving the bank enough time within which to sufficiently
Ombudsman entitled, Fact-Finding and Intelligence Bureau (FFIB) v. Amado comply with the order.”6
Lagdameo, et al. The order further states: • Thus, on June 16, 1998, the Ombudsman issued an order directing petitioner to
“It is worth mentioning that the power of the Ombudsman to investigate and produce the bank documents relative to accounts in issue. The order states:
to require the production and inspection of records and documents is • Viewed from the foregoing, your persistent refusal to comply with Ombudsman’s
sanctioned by the 1987 Philippine Constitution, Republic Act No. 6770, order in unjustified, and is merely intended to delay the investigation of the case.
otherwise known as Ombudsman Act of 1989 and under existing jurisprudence Your act constitutes disobedience of or resistance to a lawful order issued by this
on the matter. It must be noted that R.A. 6770 especially Section 15 thereof office and is punishable as Indirect Contempt under Section 3(b) of R.A. 6770. The
provides, among others, the following powers, functions and duties of the same may also constitute obstruction in the lawful exercise of the functions of the
Ombudsman Ombudsman which is punishable under Section 36 of R.A. 6770.7
• The basis of the Ombudsman in ordering an in camera inspection of the accounts is • On July 10,1998, petitioner together with Union Bank of the Philippines, filed a
a trail managers checks purchased by one George Trivinio, a respondent in OMB- petition for declaratory relief, prohibition and injunctions8 with the Regional Trial
097-0411, pending with the office of the Ombudsman. Court, Makati City, against the Ombudsman.
• It would appear that Mr. George Trivinio, purchased fifty one (51) Managers • The petition was intended to clear the rights and duties of petitioner. Thus,
Checks (MCs) for a total amount of P272.1 Million at Traders Royal Bank, United petitioner sought a declaration of her rights from the court due to the clear conflict
Nations Avenue branch, on May 2 and 3, 1995. Out of the 51 MCs, eleven (11) MCs between RA No.6770, Section 15 and R.A. No. 1405, Sections 2 and 3.
in the amount of P70.6 million, were deposited and credited to an account • Petitioner prayed for a temporary restraining order (TRO) because the Ombudsman
maintained at the Union Bank, Julia Vargas Branch.3 and the other persons acting under his authority were continuously harassing her to
• On May 26, 1998, the FFIB panel met in conference with petitioner Lourdes T. produce the bank documents relatives to the accounts in question. Moreover, on
Marquez and Atty. Fe B. Macalino at the bank’s main office, Ayala Avenue, Makati June 16, 1998, the Ombudsman issued another order stating that unless petitioner
City. The meeting was for the purpose of allowing petitioner and Atty. Macalino to appeared before the FFIB with the documents requested, petitioner manager would
view the checks furnished by Traders Royal Bank. After convincing themselves of be charged with indirect contempt and obstruction of justice.
the veracity of the checks, Atty. Macalino advised Ms. Marquez to comply with the • In the meantime,9 on July 14, 1998, the lower court denied petitioner’s prayer for a
order of the Ombudsman. Petitioner agreed to an in camera inspection set on June temporary restraining order and stated us:
3, 1998.4 • On July 20,1998, petitioner filed a motion for reconsideration
• However, on June 4,1998, petitioner wrote the Ombudsman explaining to him that • On July 23, 1998, the Ombudsman filed a motion to dismiss the petition for
the accounts in question cannot readily be identified and asked for time to respond declaratory relief12 on the ground that the Regional Trial Court has no jurisdiction to
to the order. The reason forwarded by the petitioner was that “despite diligent hear a petition for relief from the findings and orders of the Ombudsman, citing
efforts and from the accounts numbers presented, we can not identify these R.A. No. 6770, Sections 14 and 27. On August 7, 1998, the Ombudsman filed an
accounts since the checks are issued in cash or bearer. We surmised that these opposition to petitioner’s motion for reconsideration dated July 20, 1998.13
accounts have long been dormant, hence are not covered by the new account • On August 19,1998, the lower court denied petitioner’s motion for
number generated by the Union Bank system. We therefore have to verify from the reconsideration,14 and also the Ombudsman’s motion to dismiss. 15
Interbank records archives for the whereabouts of these accounts.5 • On August 21, 1998, petitioner received a copy of the motion to cite her for
• The Ombudsman, responding to the request of the petitioner for time to comply contempt, filed with the Office of the Ombudsman by Agapito B. Rosales, Director,
with the order, stated: “firstly, it must be emphasized that Union Bank, Julia Vargas Fact Finding and Intelligence Bureau (FFIB).16
Branch was depositary bank of the subject Traders Royal Bank Manager’s Check
Page 288 of 528
• On August 31, 1998, petitioner filed with the Ombudsman an opposition to the dwelling. Invasion of privacy is an offense in special laws like the Anti-Wiretapping
motion to cite her in contempt on the ground that the filing thereof was premature Law, the Secrecy of Bank Deposits Act, and the Intellectual Property Code.28
due to the petition pending in the lower court.17 Petitioner likewise reiterated that
she had no intention to disobey the orders of the Ombudsman. However, she
wanted to be clarified as to how she would comply with the orders without her
breaking any law, particularly RA. No. 1405.18
• Respondent Ombudsman panel set the incident for hearing on September 7, 1998.19
After hearing, the panel issued an order dated September 7, 1998, ordering
petitioner and counsel to appear for a continuation of the hearing of the contempt
charges against her.20
• On September 10, 1998, petitioner filed with the Ombudsman a motion for
reconsideration of the above order.21 Her motion was premised on the fact that
there was a pending case with the Regional Trial Court, Makati City,22 which would
determine whether obeying the orders of the Ombudsman to produce bank
documents would not violate any law.
• The FFIB opposed the motion,23 and on October 14, 1998, the Ombudsman denied
the motion by order the dispositive portion
•
Hence, the present petition
ISSUES & ARGUMENTS
• W/N the petitioner may be cited for indirect contempt for her failure to produce
the documents requested by the Ombudsman. And whether the order of the
Ombudsman to have an in camera inspection of the questioned account is allowed
as an exception to the law on secrecy of bank deposits (R.A. No.1405).

We rule that before an in camera inspection may be allowed, there must be a pending
case before a court of competent jurisdiction. Further, the account must be clearly
identified, the inspection limited to the subject matter of the pending case before the
court of competent jurisdiction. The bank personnel and the account holder must be
notified to be present during the inspection, and such inspection may cover only the
account identified in the pending case.
• In the case at bar, there is yet no pending litigation before any court of competent
authority. What is existing is an investigation by the Office of the Ombudsman. In
short, what the office of the ombudsman would wish to do is to fish for additional
evidence to formally charge Amado Lagdameo, et. al., with the Sandiganbayan.
Clearly, there was no pending case in court which would warrant the opening of the
bank account for inspection.
• Zone of privacy are recognized and protected in our laws. The Civil Code provides
that” [e]very person shall respect the dignity, personality, privacy and peace of mind
of his neighbors and other persons” and punishes as actionable torts several acts for
meddling and prying into the privacy of another. It also holds public officer or
employee or any private individual liable for damages for any violation of the rights
and liberties of another person, and recognizes the privacy of letters and other
private communications. The Revised Penal Code makes a crime of the violation of
secrets by an officer, revelation of trade and industrial secrets, and trespass to JAY DUHAYLONGSOD
Page 289 of 528

264 Zulueta v. Nicolas | Reyes
G.R. No. L-8252 January 31, 1958| 102 Phil. 944
FACTS
• Plaintiff filed libel charges against the provincial governor of Rizal and the staff of
Philippine Free Press. Defendant investigated on the complaint and rendered an
opinion that there was no prima facie case; that the alleged libelous statements were
made in good faith and for the sole purpose of serving the best interest of the
public; and that in consequence the fiscal absolved the said governor and the Free
Press staff from the crime of libel.
• Because of such finding, plaintiff sues defendant for dereliction of duty.
ISSUES & ARGUMENTS

• W/N Zulueta has a cause of action against Nicolas.
NO CAUSE OF ACTION.
• The present action is based on article 27 of the new Civil Code, which provides that
"any person suffering material or moral loss because a public servant or employee
refuses or neglects without just cause, to perform his official duty may file an action
for damages and other relief against the latter." But as we said in Bangalayvs. Ursal,*
50 Off. Gaz. 4231, this article "contemplates a refusal or neglect without just cause
by a public servant or employee to perform his official duty." Refusal of the fiscal to
prosecute when after the investigation he finds no sufficient evidence to establish a
prima facie case is not a refusal, without just cause, to perform an official duty. The
fiscal has for sure the legal duty to prosecute crimes where there is no evidence to
justify such action. But it is equally his duty not to prosecute when after the
investigation he has become convinved that the evidence available is not enough to
establish a prima facie case. The fiscal is not bound to accept the opinion of the
complainant in a criminal case as to whether or not a prima facie case exists. Vested
with authority and discretion to determine whether there is sufficient evidence to
justify the filing of corresponding the information and having control of the
prosecution of a criminal case, the fiscal cannot be subjected to dictation from the
offended party (People vs. Liggayu , et al., 97 Phil., 865, 51 Off Gaz., 5654; People
vs. Natoza, 100 Phil., 533, 53 Off Gaz., 8099). Having legal cause to refrain from
filing an information against the person whom the herein plaintiff wants him to
charge with libel, the defendant fiscal cannot be said to have refused or neglected
without just cause to perform his official duty. On the contrary, it would appear that
he performed it.
JOHN FADRIGO
Page 290 of 528

265 Javellana V. Tayo ISSUE:
G.R. L-18919 December 29, 1962
Whether petitioners entitled damages?
FACTS:
HOLDING & RATIONALE
• The petitioners are duly elected and qualified a members of the Municipal Council
of the Municipality of Buenavista, Province of Iloilo, Philippines; and that the Yes. Article 27 provides as follows:
respondent at the time the acts hereinbelow complained of took place, was and still
is the duly-elected and qualified Mayor of the Municipality of Buenavista, Province 'Any person suffering material or moral loss because a public servant or employee
of Iloilo Philippines where he resides and may be served with summons. refuses or neglects, without just cause, to perform his official duty may file an action
• On February 8, 1960 the Municipal Council of the Municipality of Buenavista, for damages and other relief against the latter, without prejudice to any disciplinary
Iloilo, unanimously approved Resolution No. 5, Series of 1960. On June 1, 1960, at administrative action that my be taken.'
the time and place set for the regular session of the Municipal Council, the Mayor,
Vice-Mayor, No. 1 and No. 2 Councilors, and the Secretary were absent Only petitioner Exequiel Golez was presented as a witness who proved moral
• The six councilors, who are the petitioners in this case, were present and they damages he suffered as a consequence of the refusal the respondent Susano Tayo to
proceeded to elect among themselves a temporary presiding officer and Acting perform his official duty. such, of all the petitioners, only Exequiel Golez is entitled
Secretary to take notes of the proceedings. Having thus elected a temporary receive moral damages in the sum of P100.00.
presiding officer and a secretary of the Council, they proceeded to do business.
• On June 15, 1960 at the time and place designated in Resolution No. 5, series of Respondent-appellant claims, in this appeal, that the trial court erred in holding that
1960, dated February 8, 1960 above referred to, the petitioners acting as duly elected the sessions held by petitioners-appellees during his absence and during the absence of
and qualified councilors were present and again, in view of the absence of the his Vice-Mayor and the No. 1 and No. 2 Councilors the Municipal Council of
Mayor, Vice-Mayor said to councilor and the Secretary proceeded to elect a Buenavista, Iloilo were valid an legal.The claim is untenable. In the first place, there is no
temporary presiding officer and temporary secretary from among them, and did question that the sessions at issue were held on the days set for regular sessions of the
business as a Municipal Council of Buenavista. council, as authorized an approved in a previous resolution. Secondly, it is not disputed
• When the minutes of the proceedings of June 1, June 15. July 6, July 20, August 17, that a majority of the members of the council (six out of ten) were present in these
September 7, and September 21, 1960 of the Municipal Council were presented to sessions.
the respondent for action, the respondent Mayor refused to act upon said minutes,
or particularly to approve or disapprove the resolution as approved by the municipal Appellant asserts that while under Section 2221 of the Revised Administrative Code,
Council, the Mayor declaring the sessions above referred to as null and void and not the majority of the members of the council constitutes a quorum to do business, the
in accordance with. council "shall be presided by the Mayor and no one else", inasmuch as it is one of the
• Petitioners made repeated demands for payment of their per diems for the of June duties imposed upon him under Section 2194(d) of the Revised Administrative Code.
1, June 15, July 6, July 20, August 3, August 17, September 7, 1960, by representing The argument would be correct if the mayor (herein appellant) were present at the
the payrolls; Provincial Forms No. 38(A) to the respondent Mayor for the latter sessions in question and was prevented from presiding therein, but not where, as in the
signature, but that the respondent refused to affix his signature to the payrolls thus instant case, he absented himself therefrom.
presented, covering the per diems of the petitioner alleging that the proceedings We find said award proper under Article 27 of the new Civil Code, considering that
were illegal due to his absence. according to the trial court, he (Golez) was able to prove that he suffered the same, as a
• The Honorable Provincial Fiscal of the Province of Iloilo in his indorsement, consequence of appellant's refusal to perform his official duty, not withstanding the
rendered an opinion upholding the validity of the controverted sessions of the action taken by the Provincial Fiscal an the Provincial Board upholding the validity of
Municipal Council, despite the opinion of the Provincial Fiscal, the respondent the session in question.
Mayor refused and still refuses to act upon the resolution petitions presented to him WHEREFORE, the decision appealed from is hereby affirmed with costs against
and to sign the payrolls covering the per diems of the herein petitioners. respondent-appellant. So ordered.
J.C. LERIT
Page 291 of 528
266 Phimco vs. City of Cebu | Aquino ISSUES & ARGUMENTS
G.R. No. L-30745 January 18, 1978 • W/N the city treasurer is liable for exemplary damages and attorney’s fees
o Company: The claim for damages is predicated on articles 19, 20, 21, 27
FACTS and 2229 of the Civil Code. It is argued that the city treasurer refused and
• Ordinance No. 279 of Cebu City is "an ordinance imposing a quarterly tax on gross neglected without just cause to perform his duty and to act with justice and
sales or receipts of merchants, dealers, importers and manufacturers of any good faith. The company faults the city treasurer for not following the
commodity doing business" in Cebu City. It imposes a sales tax of one percent (1%) opinion of the city fiscals, as legal adviser of the city, that all out-of-town
on the gross sales, receipts or value of commodities sold, bartered, exchanged or deliveries of matches are not subject to sales tax because such transactions
manufactured in the city in excess of P2,000 a quarter. were effected outside of the city's territorial limits.
• Section 9 of the ordinance provides that, for purposes of the tax, "all deliveries of o City treasurer: that in enforcing the tax ordinance in question he was
goods or commodities stored in the City of Cebu, or if not stored are sold" in that simply complying with his duty as collector of taxes (Sec. 50, Revised
city, "shall be considered as sales" in the city and shall be taxable. Charter of Cebu City). Moreover, he had no choice but to enforce the
• Thus, it would seem that under the tax ordinance sales of matches consummated ordinance because according to section 357 of the Revised Manual of
outside of the city are taxable as long as the matches sold are taken from the Instruction to Treasurer's "a tax ordinance win be enforced in accordance
company's stock stored in Cebu City. with its provisions" until d illegal or void by a competent court, or
• The Philippine Match Co., Ltd., whose principal office is in Manila, is engaged in the otherwise revoked by the council or board from which it originated.
manufacture of matches. Its factory is located at Punta, Sta. Ana, Manila. It ships
cases or cartons of matches from Manila to its branch office in Cebu City for HOLDING & RATIO DECIDENDI
storage, sale and distribution within the territories and districts under its Cebu NO.
branch or the whole Visayas-Mindanao region. Cebu City itself is just one of the Article 27 of the Civil Code provides that "any person suffering material or moral
eleven districts under the company's Cebu City branch office. lose because a public servant or employee refuses or neglects, without just cause, to
• The company does not question the tax on the matches of matches consummated in perform his official duty may file an action for damages and other relief against the
Cebu City, meaning matches sold and delivered within the city. latter, without prejudice to any disciplinary administrative action that may be taken."
• It assails the legality of the tax which the city treasurer collected on out-of- town Article 27 presupposes that the refuse or omission of a public official is attributable
deliveries of matches, to wit: (1) sales of matches booked and paid for in Cebu City to malice or inexcusable negligence. In this case, it cannot be said that the city
but shipped directly to customers outside of the city; (2) transfers of matches to treasurer acted wilfully or was grossly t in not refunding to the plaintiff the taxes
newsmen assigned to different agencies outside of the city and (3) shipments of which it paid under protest on out-of-town sales of matches.
matches to provincial customers pursuant to salesmen's instructions. The record clearly reveals that the city treasurer honestly believed that he was
• The company paid under protest to the city t the sum of P12,844.61 as one percent justified under section 9 of the tax ordinance in collecting the sales tax on out-of-
sales tax on those three classes of out-of-town deliveries of matches for the second town deliveries, considering that the company's branch office was located in Cebu
quarter of 1961 to the second quarter of 1963. City and that all out-of-town purchase order for matches were filled up by the
• The company in its letter of April 15, 1961 to the city treasurer sought the refund of branch office and the sales were duly reported to it.
the sales tax paid for out-of-town deliveries of matches. It invoked Shell Company The city treasurer acted within the scope of his authority and in consonance with his
of the Philippines, Ltd. vs. Municipality of Sipocot, Camarines Sur, 105 Phil. 1263. bona fide interpretation of the tax ordinance. The fact that his action was not
In that case sales of oil and petroleum products effected outside the territorial limits completely sustained by the courts would not him liable for We have upheld his act
of Sipocot, were held not to be subject to the tax imposed by an ordinance of that of taxing sales of matches booked and paid for in the city.
municipality. It has been held that an erroneous interpretation of an ordinance does not
• The city treasurer denied the request. His stand is that under section 9 of the constitute nor does it amount to bad faith that would entitle an aggrieved
ordinance all out-of-town deliveries of latches stored in the city are subject to the party to an award for damages. That salutary in addition to moral temperate,
sales tax imposed by the ordinance. liquidated or compensatory damages (Art. 2229, Civil Code). Attorney's fees
• The company filed the complaint herein, praying that the ordinance be declared are being claimed herein as actual damages. We find that it would not be just
void insofar as it taxed the deliveries of matches outside of Cebu City, that the city and equitable to award attorney's fees in this case against the City of Cebu
be ordered to refund to the company said sum of P12,844.61 as excess sales tax and its (See Art. 2208, Civil Code).
paid, and that the city treasurer be ordered to pay damages.
JON LINA
Page 292 of 528
267 Torio vs. Fontanilla| Munoz Palma exercised for the special benefit and advantage of the community and include
G.R. No. L-29993 October 23, 1978 | those which are ministerial private and corporate.
• This distinction of powers becomes important for purposes of determining the
FACTS liability of the municipality for the acts of its agents which result in an injury to
third persons.
• The Municipal Council of Malasiqui, Pangasinan passed Resolution No. 159 to • If the injury is caused in the course of the performance of a governmental function
manage the town fiesta celebration on January 1959. It also passed creating the or duty no recovery, as a rule, can be had from the municipality unless there is an
1959 Malasiqui 'Town Fiesta Executive Committee which in turn organized a sub- existing statute on the matter, nor from its officers, so long as they performed their
committee on entertainment and stage, with Jose Macaraeg as Chairman. duties honestly and in good faith or that they did not act wantonly and maliciously.
• The council appropriated the amount of P100.00 for the construction of 2 stages, • With respect to proprietary functions, the settled rule is that a municipal
one for the "zarzuela" and another for the cancionan Jose Macaraeg supervised the corporation can be held liable to third persons ex contract or ex delicto.
construction of the stage and as constructed the stage for the "zarzuela" • The rule of law is a general one, that the superior or employer must answer civilly
• The "zarzuela" entitled "Midas Extravaganza" was donated by an association of for the negligence or want of skill of its agent or servant in the course or fine of
Malasiqui employees of the Manila Railroad Company in Caloocan, Rizal. The his employment, by which another, who is free from contributory fault, is injured.
troupe arrived in the evening of January 22 for the performance and one of the Municipal corporations under the conditions herein stated, fall within the
members of the group was Vicente Fontanilla. operation of this rule of law, and are liable, accordingly, to civil actions for
• The program started at about 10:15 o'clock that evening with some speeches, and damages when the requisite elements of liability co-exist.
many persons went up the stage. The "zarzuela" then began but before the • It follows that under the doctrine of respondent superior, petitioner-municipality is
dramatic part of the play was reached, the stage collapsed and Vicente Fontanilla to be held liable for damages for the death of Vicente Fontanilla if that was
who was at the rear of the stage was pinned underneath. Fontanilla was taken to attributable to the negligence of the municipality's officers, employees, or agents.
tile San Carlos General Hospital where he died in the afternoon of the following • We can say that the deceased Vicente Fontanilla was similarly situated as
day Sander The Municipality of Malasiqui resolved to celebrate the town fiesta
• Heirs brought action to enforce liability against the Municipality. Won in CA. in January of 1959; it created a committee in charge of the entertainment
and stage; an association of Malasiqui residents responded to the call for
ISSUES & ARGUMENTS the festivities and volunteered to present a stage show; Vicente Fontanilla
was one of the participants who like Sanders had the right to expect that he
• W/N the celebration of a town fiesta an undertaking in the exercise of a would be exposed to danger on that occasion.
municipality's governmental or public function or is it or a private or
proprietary character? Liability of the municipal councilors who enacted the ordinance and created the
 Fontanilla Heirs: Municipality liable for acts because fiesta is in exercise of its fiesta committee.
proprietary acts
 Municipality: As a legally and duly organized public corporation it performs • Article 27 of the Civil Code covers a case of nonfeasance or non-performance by a
sovereign functions and the holding of a town fiesta was an exercise of its public officer of his official duty; it does not apply to a case of negligence or
governmental functions from which no liability can arise to answer for the misfeasance in carrying out an official duty.
negligence of any of its agents • The municipal councilors(who passed the resolution) are absolved from any
liability for the death of Vicente Fontanilla. The records do not show that said
HOLDING & RATIO DECIDENDI petitioners directly participated in the defective construction of the "zarzuela"
stage or that they personally permitted spectators to go up the platform
MUNICIPALITY IS LIABLE BECAUSE TOWN FIESTA IS AN EXERCISE
OF PROPRIETARY FUNCTIONS
• The powers of a municipality are twofold in character public, governmental or
political on the one hand, and corporate, private, or proprietary on the other.
Governmental powers are those exercised by the corporation in administering the
powers of the state and promoting the public welfare and they include the
JAN PORTER
legislative, judicial public, and political Municipal powers on the other hand are
Page 293 of 528
268 Spinner v. Hesslein Corporation | Street by the defendant upon goods sold by him in violation of the plaintiff’s right. The
G.R. No. L-31380, January 13, 1930| 54 PHIL 224 right to recover damages and the right to accounting are different remedies; and the
election to sue for the first is a waiver of the second.
FACTS
• Spinner is a corporation involved in textiles, including khaki. They are based in
England and India and are represented in the Philippines by Wise and Co. They sell
different brands and grades of khaki. One of the grades they are known for is called
“Wigan”
• Hesslein is a local corporation also in the business of textiles. In the process of
selling their khaki fabrics, they also make use of the term “Wigan.”
• Spinner, however, holds the trademark for the brand both in Englang and here in
the Philippines, “Wigan” and is not asking the court to restrain Hesslein from using
such term. Spinner also wants to claim damages on the basis of unfair competition.
ISSUES & ARGUMENTS

• W/N Spinner is entitled to damages based on unfair competition.
o Petitioner: Spinner has the trademark to the brand called “Wigan” and
Husslein infringed upon their right when in pasted the same brand and
picture on its khaki fabric so as to entice consumers to buy hi product.
o Respondent: There is no assessable damage shown by Spinner to hold
this Corporation liable.
DAMAGES CANNOT BE CLAIMED BY SPINNER. THERE WAS NO

FRAUD INVOLVED.
• On the one hand, the law concerning infringement of trade-marks and that
concerning unfair competition have a common conception at their root, which is
that one person shall not be permitted to misrepresent that his goods or his business
are the goods or the business of another, the law concerning unfair competition is
broader and more inclusive. On the other hand, the law concerning the
infringement of trade-mark is of more limited range, but within its narrower range
recognizes a more exclusive right derived from the adoption and registration of the
trade-mark by the person whose goods or business are first associated therewith.
Unfair competition cannot be placed on the plane of invasion of property right. The
tort is strictly one of fraud.
• With respect to the question of infringement of trade-mark right, it is clear that the
appropriation by the defendant of the word "Wigan" for use in the sale of its khaki
did not constitute a violation of trade-mark prior to April, 1925, when the word
"Wigan" was first incorporated in the plaintiff's registered trade-mark; but after that
date it was certainly illegal for the defendant to use the word "Wigan" stamped upon
the khaki sold by it; and this act was an infringement of trade-mark right.
• A plaintiff who elects to sue for the damages resulting to his business from
infringement of a trade-mark or from unfair competition of another and who fails to
prove any assessable damage is not entitled to an accounting for the profits obtained MIK MALANG
Page 294 of 528

269 Manila Oriental Sawmill Co. vs. National Labor Union and CIR| Bautista derogation of the principle underlying the freedom of contract and the good faith
Angelo that should exist in contractual relations
G.R. No. L-4330, March 24, 1952|91 Phil 28 • The record shows that the local chapter of National Labor is composed entirely,
except one, of members who made up the total membership of the United
FACTS Employees Welfare Association, a registered union in the Company. To be exact,
• The United Employees Welfare Association (the Union), is the duly registered union thirty-six of the thirty-seven members of said association tendered their resignations
in the Department of Labor whose members are the employees of Manila Oriental and joined the local chapter of National Labor without first securing the approval of
Sawmill Co. (the Company) their resignations. The new Union then sought to present a seven-point demand of
• They entered into an agreement of working conditions pursuant to a settlement the very same employees to petitioner, which in may respects differs from their
concluded in a case No. 173-V of the Court of Industrial Relations, which is to last previous demand
for one year • A labor organization is wholesome if it serves its legitimate purpose of settling labor disputes. That
• Subsequently, 36 out of its 37 members tendered in their resignations from the is why it is given personality and recognition in concluding collective bargaining agreements. But if it
Union and joined the local chapter of the National Labor Union (National Labor). is made use of as a subterfuge, or as a means to subvert valid commitments, it outlives its purpose
There is no evidence that these resignations were made with the approval of the for far from being an aid, it tends to undermine the harmonious relations between management and
Company labor. Such is the move undertaken by National Labor. Such a move cannot be
• Thereafter the president of National Labor sent a letter to the Company containing considered lawful and cannot receive the sanction of the Court. Hence, the strike it
7 demands allegedly on behalf of the members of its local chapter who are has staged is illegal
employed by the Company, to which the latter, through its counsel, answered with
another letter stating among other things that the laborers on whose behalf the letter Order appealed from is REVERSED.
has been written were affiliated with the Union
• National Labor reiterated its demands and in reply, counsel of the Company sent a
letter that it could not recognize the alleged local chapter of National Labor until
and after the previous agreement entered into by the same employees concerned
and the Company is declared null and void by the Court of Industrial Relations
• Because of this, the members of National Labor struck
• The Company then filed a petition in the CIR to declare the strike illegal
• The CIR issued an order denying the Company’s prayer that said strike be declared
illegal and setting the case for hearing on the demands prayed for by National
Labor. Motion for reconsideration denied by the CIR en banc
• Hence, this petition for review
ISSUES & ARGUMENTS

• W/N the transfer of the employees from the Union to the National Labor
Union is illegal

THE TRANSFER OF THE EMPLOYEES IS ILLEGAL FOR IT MERELY
CIRCUMVENTED AND DISREGARDED THE CONTRACT ENTERED
INTO BETWEEN THE UNION AND THE COMPANY
• It is evident that the purpose of their transfer is merely to disregard and circumvent
the contract entered into between the same employees and the petitioner on May 4,
1950, knowing full well that contract was effective for one year, and was entered
into with the sanction of the Court of industrial Relations. If this move were allowed
the result would be a subversion of a contract freely entered into without any valid
and justifiable reason. Such act cannot be sanctioned in law or in equity as is it in KATH MATIBAG
Page 295 of 528

270 Habana v. Robles
G.R. No. 131522 July 19, 1999
(Unfair Competition)
FACTS
• Habana was the author and copyright owner of a college textbook entitled “College
English Today” . He discovered that another textbook, which was written by
Robles, was similarly written with regard to the conten, illustrations and examples.
Several pages of Robles’ book was directly plagiarized from his book. Habana sued
Robles for unfair competition, copyright infringement and damages.
ISSUES & ARGUMENTS

• W/N Habana is entitled to damages
HABANA IS ENTITLED TO DAMAGES.
Robles is guilty of copyright infringement. Infringment of copyright consists of copying

of anything without the consent of the owner with whom is vested the sole right to do
anything. It may be likened to trespassing wherein a person trespasses on the private
dominion of another. With regard to literary works, such as a book, copyrighting is a
protection given to the intellectual product of an author. In such the copying must be
coupled with an injurious effect.
In the case at bar, even if Robles did not copy all of Habana’s book, if so much is taken
that it substantially reduces the value of the book, then Robles is guilty of infringement.
Robles should have acknowledged Habana as the source, because the copying without
permission is injurious enough.
NINA MEIJA
Page 296 of 528

271 Lim vs. Ponce De Leon | Martin impairs any of the following rights and liberties of another person shall be liable to
G.R. No. L-22554, August 29, 1975| the latter for damages, (9) The rights to be secure in one's person, house, papers,
and effects against unreasonable searches and seizures
FACTS • Pursuant to the foregoing provision, a person whose constitutional rights have been
• Plaintiff-appellant Jikil Taha sold to a certain Timbangcaya of Palawan a motor violated or impaired is entitled to actual and moral damages from the public officer
launch named M/L "SAN RAFAEL". A year later Timbangcaya filed a complaint or employee responsible therefor. In addition, exemplary damages may also be
with the Office of the Provincial Fiscal of Palawan alleging that after the sale Jikil awarded. In the instant case, plaintiff-appellant Lim claimed that he purchased the
Taha forcibly took away the motor launch from him. motor launch from Jikil Taha in consideration of P3,000.00, having given P2,000.00
• After conducting a preliminary investigation, Fiscal Ponce de Leon in his capacity as as advanced payment; that since its seizure, the motor launch had been moored at
Acting Provincial Fiscal of Palawan, filed with the CFI of Palawan the Balabac Bay and because of exposure to the elements it has become worthless at the
corresponding information for Robbery with Force and Intimidation upon Persons time of the filing of the present action; that because of the illegality of the seizure of
against Jikil Taha. Fiscal Ponce de Leon, upon being informed that the motor launch the motor launch, he suffered moral damages and that because of the violation of
was in Balabac, Palawan, wrote the Provincial Commander of Palawan requesting their constitutional rights they were constrained to engage the services of a lawyer
him to direct the detachment commander-in Balabac to impound and take custody whom they have paid for attorney's fees.
of the motor launch. • Defendant-appellee Fiscal Ponce de Leon wanted to wash his hands of the incident
• Fiscal Ponce de Leon reiterated his request to the Provincial Commander to by claiming that "he was in good faith, without malice and without the slightest
impound the motor launch, explaining that its subsequent sale to a third party, intention of inflicting injury to plaintiff-appellant, Jikil Taha" when he ordered the
plaintiff-appellant Lim, cannot prevent the court from taking custody of the same. seizure of the motor launch. We are not prepared to sustain his defense of good
So, upon order of the Provincial Commander, defendant-appellee Maddela, seized faith. To be liable under Article 32 of the New Civil Code it is enough that there was
the motor launch "SAN RAFAEL" from plaintiff-appellant Delfin Lim and a violation of the constitutional rights of the plaintiffs and it is not required that
impounded it. defendants should have acted with malice or bad faith.
• Plaintiff-appellant Lim pleaded with Maddela to return the motor launch but the • The very nature of Article 32 is that the wrong may be civil or criminal. It is not
latter refused. Likewise, Jikil Taha through his counsel made representations with necessary therefore that there should be malice or bad faith. To make such a
Fiscal Ponce de Leon to return the seized property to plaintiff-appellant Lim but requisite would defeat the main purpose of Article 32 which is the effective
Fiscal Ponce de Leon refused, on the ground that the same was the subject of a protection of individual rights. Public officials in the past have abused their powers
criminal offense. on the pretext of justifiable motives or good faith in the performance of their duties.
• All efforts to recover the motor launch going to naught, plaintiffs-appellants Lim • But defendant-appellee Orlando Maddela cannot be held accountable because he
and Jikil Tahafiled with the CFI of Palawan a complaint for damages against impounded the motor launch upon the order of his superior officer. While a
defendants-appellees Fiscal Francisco Ponce de Leon and Maddela, alleging that on subordinate officer may be held liable for executing unlawful orders of his superior
Maddela entered the premises of Lim without a search warrant and then and there officer, there are certain circumstances which would warrant Maddela's exculpation
took away the hull of the motor launch without his consent; that he effected the from liability. The records show that after Fiscal Ponce de Leon made his first
seizure upon order of Fiscal Ponce de Leon who knew fully well that his office was request to the Provincial Commander on June 15, 1962 Maddela was reluctant to
not vested with authority to order the seizure of a private property impound the motor launch despite repeated orders from his superior officer.
Petition granted. Decision of Regional Trial Court Revived and affirmed.
ISSUES & ARGUMENTS
W/N defendants are civilly liable to plaintiffs for damages allegedly suffered by
them granting that the seizure of the motor launch was unlawful.
PONCE DE LEON LIABLE UNDER ART. 32. DEFENDANT MADELLA

CANNOT BE LIABLE SINCE
• As to whether or not they are entitled to damages, plaintiffs-appellants anchor their
claim for damages on Articles 32 and 2219 of the New Civil Code which provide in
part as follows: ART. 32. Any public officer or employee, or any private individual,
who directly or indirectly obstructs, defeats, violates or in any manner impedes or MAUI MORALES
Page 297 of 528

272 Rama vs. Court of Appeals | Alampay officer is civilly liable for failure to observe honesty and good faith in the performance of
No. L-44842 March 16, 1987 | their duties as public officers or for wilfully or negligently causing damage to another
(Article 20, Civil Code) or for wilfully causing loss or injury to another in a manner that
FACTS is contrary to morals, good customs and/or public policy (Article 21, New Civil Code).
• During the incumbency of Rene Espina as provincial governor of Cebu, Neither can petitioners shield themselves from liability by invoking the ruling in the cases
Osmundo G. Rama as vice-governor and Pablo P. Garcia, Reynaldo M. of Carino vs. Agricultural Credit and Cooperative Financing Administration L-23966, May 22,
Mendiola and Valerians S. Carillo as members of the Sangguniang Panlalawigan, 1969, 28 SCRA 268. In those cases, the erring public officials were sued in their official
said officials adopted Resolution No. 990 which appropriated funds "for the capacities whereas in the instant cases, petitioners were specifically sued in their personal
maintenance and repair of provincial roads and bridges and for the operation capacities.
and maintenance of the office of the provincial engineer and for other
purposes."
• The provincial board resolved to abolish around thirty positions * the salaries
of which were paid from the "JJ" Road and Bridge Fund thus doing away with
the caminero (pick-shovel-wheelbarrow) system Consequently around 200
employees of the province were eased out of their respective jobs and, to
implement the mechanization program in the maintenance of roads and
bridges, the provincial government purchased heavy equipment worth
P4,000,000.00. However, contrary to its declared policy to economize the
provincial administration later on hired around one thousand new employees,
renovated the office of the provincial engineer and provided the latter with a
Mercedes-Benz car
• the employees whose positions were abolished filed separate petitions for
mandamus, damages and attorneys fees aimed at the annulment of Resolution
No. 990, their reinstatement and the recovery of damages
• The Court of First Instance of Cebu declared Resolution No. 990 null and void
and ordered. CA affirmed in toto.
• Hence, this petition
ISSUES & ARGUMENTS
• W/N Espina, Rama, Garcia, Mendiola and Carillo are personally liable for
damages for adopting a resolution which abolished positions to the detriment
of the occupants
They are all liable.
A public officer who commits a tort or other wrongful act, done in excess or beyond the
scope of his duty, is not protected by Ms office and is personally liable therefor like any
private individual (Palma vs. Graciano, 99 Phil. 72, 74; Carreon vs. Province of
Pampanga, 99 Phil. 808). This principle of personal liability has been applied to cases
where a public officer removes another officer or discharges an employee wrongfully, the
reported cases saying that by reason of non-compliance with the requirements of law in
respect to removal from office, the officials were acting outside of their official authority
(Stiles vs. Lowell 233 Mass. 174, 123 NE 615, 4 ALR 1365, cited in 63 Am. Jur. 2d. 770).
Indeed, municipal officers are liable for damages if they act maliciously or wantonly and
if the work which they perform is done rather to injure an individual than to discharge a
public duty (56 Am. Jur. 2d 334, citing Yearly V. Fink 43 Pa 212). As we have held in
JAVIN OMPOC
Vda de Laig vs. Court of Appeals, L-26882, April 5, 1978, 82 SCRA 294, 307-308, a public
Page 298 of 528
273 Aberca vs. Ver| En Banc 5. Freedom from being compelled to be a witness against one's self, or from being
G.R. No. L-69866, April 15, 1988 | 160 SCRA 590 forced to confess guilt, or from being induced by a promise of immunity or reward
to make a confession, except when the person confessing becomes a state witness.
FACTS
• Then President Marcos had already lifted Martial Law but the privilege of the writ of • The complaint alleges facts showing with abundant clarity and details, how plaintiffs'
habeas corpus was still suspended. constitutional rights and liberties mentioned in Article 32 of the Civil Code were
• General Ver ordered Task Force Makabansa (TFM) to conduct pre-emptive strikes violated and impaired by defendants.
against known communist-terrorist (CT) underground houses in view of increasing • The suspension of the privilege of the writ of habeas corpus does not destroy
reports about CT plans to sow disturbances in Metro Manila. petitioners' right and cause of action for damages for illegal arrest and detention and
• Plaintiffs filed a complaint which contained allegations of searches made without other violations of their constitutional rights. The suspension does not render valid
search warrants or based on irregularly issued or substantially defective warrants; an otherwise illegal arrest or detention. What is suspended is merely the right of the
seizures and confiscation, without proper receipts, of cash and personal effects individual to seek release from detention through the writ of habeas corpus as a
belonging to plaintiffs and other items of property which were not subversive and speedy means of obtaining his liberty.
illegal nor covered by the search warrants; arrest and detention of plaintiffs without • it does not and cannot suspend their rights and causes of action for injuries suffered
warrant or under irregular, improper and illegal circumstances; detention of because of respondents' confiscation of complainants’ private belongings, the
plaintiffs at several undisclosed places of 'safehouses" where they were kept violation of their right to remain silent and to counsel and their right to protection
incommunicado and subjected to physical and psychological torture and other against unreasonable searches and seizures and against torture and other cruel and
inhuman, degrading and brutal treatment for the purpose of extracting incriminatory inhuman treatment.
statements. The complaint contains a detailed recital of abuses perpetrated upon the
plaintiffs violative of their constitutional rights.
ISSUES & ARGUMENTS
• W/N the TFM may be held liable for their acts under an official duty
Respondents: They have immunity from suit of a state for they only followed the
orders of the President when he called them out. It was their constitutional duty to
exercise their functions.
YES, THEIR DUTY TO SUPPRESS LAWLESSNESS IS NOT A BLANKET

LICENSE WHICH IGNORED THE CONSTITUTIONAL RIGHTS OF THE
PEOPLE.
• Article 32 of the Civil Code provides:
1. Freedom from arbitrary arrest or illegal detention;

2. The right against deprivation of property without due process of law;
3. The right to be secure in one's person, house, papers and effects against
unreasonable searches and seizures;
4. The privacy of communication and correspondence;
MARICE PACHECO
Page 299 of 528

274 MHP Garments, Inc vs. CA | of the Article is to put an end to official abuse by plea of the good faith. In the United
G.R. No. 117009. October 11, 1995| States this remedy is in the nature of a tort.
FACTS
• MHP Garments, Inc., was awarded by the Boy Scouts of the Philippines, the
exclusive franchise to sell and distribute official Boy Scouts uniforms, supplies,
badges, and insignias. In their Memorandum Agreement, petitioner corporation was
given the authority to "undertake or cause to be undertaken the prosecution in court
of all illegal sources of scout uniforms and other scouting supplies."
• MHP received information that private respondents Agnes Villa Cruz, Mirasol
Lugatiman, and Gertrudes Gonzales were selling Boy Scouts items and
paraphernalia without any authority. Petitioner de Guzman, an employee of
petitioner corporation, was tasked to undertake the necessary surveillance and to
make a report to the Philippine Constabulary (PC).
• de Guzman, Captain Renato M. Peñafiel, and two (2) other constabulary men of the
Reaction Force Battalion, Sikatuna Village, Diliman, Quezon City went to the stores
of respondents at the Marikina Public Market. Without any warrant, they seized the
boy and girl scouts pants, dresses, and suits on display at respondents' stalls. The
seizure caused a commotion and embarrassed private respondents. Receipts were
issued for the seized items. The items were then turned over by Captain Peñafiel to
petitioner corporation for safekeeping.
ISSUES & ARGUMENTS

• W/N de Guzman, Captain Penafiel and the constabulary men are liable for damages
because of their warrantless search and seizure.
THEY ARE LIABLE FOR DAMAGES
Art. 32. Any public officer or employee, or any private individual, who directly or
indirectly obstructs, defeats, violates or in any manner impedes or impairs any of the
following rights and liberties of another person shall be liable to the latter for damages.
(9) The rights to be secure in one's person, house, papers, and effects against
unreasonable searches and seizures.
The indemnity shall include moral damages. Exemplary damages may also be adjudged.
The very nature of Article 32 is that the wrong may be civil or criminal. It is not
necessary therefore that there should be malice or bad faith. To make such a requisite
would defeat the main purpose of Article 32 which is the effective protection of
individual rights. Public officials in the past have abused their powers on the pretext of
justifiable motives or good faith in the performance of their duties. Precisely, the object
VP PADILLA
Page 300 of 528

275 Obra v CA | Mendoza. found that the Brett family had a valid permit over the lands and that the Gillies
G.R. No. 120852, October 28, 1999 | family did not have the permit although it worked the claim first.
FACTS • Seizure of the truck could not fall under the moving vehicle doctrine as the truck
was transporting the minerals within the claim.
• Petitioner Obra was a regional director of the Bureau of Mines and Geo Sciences in • Likewise Dumipit cannot disclaim liability, he is a ranking military officer and
Baguio City. On June 26, 1985 Jeannette Grybos wrote him a letter in behalf of the cannot claim to have acted ministerially on the orders of Obra.
Gillies heirs in Mankayan. The letter alleged that the spouses James and June Brett
were conducting illegal mining activities in lands owned by the said heirs and
without the requisite permits.
• Obra then wrote Regional Unified Command 1 (RUC-1) Brig. Gen. Dumipit and
enlisted his help in stopping a truck allegedly used by respondents in shipping the
illegally mined ores. Obra also wrote the provincial commander of Benguet Col.
Estepa and requested that he stop any mining activities over the contested area.
Elements of RUC-1 seized an Isuzu Elf truck belonging to respondents and
impounded it.
• Private respondents filed a complaint for injunction and damages with an

application for a TRO in the RTC due to violations of Art. 32 and 19-21 of the Civil
Code. Court likewise ruled that no investigation had been made and according to
jurisprudence respondents are entitled to damages for violation of their rights.
ISSUES & ARGUMENTS

• W/N Petitioners could not be held liable for damages in the performance of
their duty in Good Faith
• W/N Petitioners are entitled to an award of Damages
PETITION IS WITHOUT MERIT, CA DECISION AFFIRMED
• PD No. 1281gave powers to order arrest, even without warrant, of persons violation
PD No. 463 or any laws being enforced by Bureau of Mines and seize tools used for
the same in favor of the government and to deputize any PC, police agency,
barangay or any person qualified to police mining activities. The petitioners contend
that this grant of power is valid even in the Constitution
• The Constitution merely makes valid the grant of power to issue warrants but did
not in any way exempt the agencies so empowered from the duty of determining
probable cause as basis for the issuance of warrants. The real question is whether or
not petitioner conducted any investigation at all.
• Court held that Obra did not conduct an investigation and was even going to hold
CHRIS PALARCA
the investigation to determine the veracity of Grybos allegations. The Court also
Page 301 of 528
276 German v. Barangan| Escolin • Given the circumstances, there was a valid exercise of police power, consequently
G.R. No. L-68828 March 27, 1985| 135 SCRA 514 there was no violation of the right to religious freedom.
• Since 1972, when mobs of demonstrators crashed through the Malacañang gates
FACTS and scaled its perimeter fence, the use by the public of J.P. Laurel Street and the
• At about 5:00 in the afternoon of October 2, 1984, petitioners, composed of about streets approaching it have been restricted.
50 businessmen, students and office employees (August 21 Movement ‘ATOM’), • The reasonableness of this restriction is readily perceived and appreciated if it is
petitioner German was the leader of ATOM, converged at J.P. Laurel Street, considered that the same is designed to protect the lives of the President and his
Manila, for the ostensible purpose of hearing Mass at the St. Jude Chapel which family, as well as other government officials, diplomats and foreign guests
adjoins the Malacañang grounds located in the same street. transacting business with Malacañang.
• They were wearing the now familiar inscribed yellow T-shirts, they started to march • The need to secure the safety of heads of state and other government officials
down said street with raised clenched fists and shouts of anti-government invectives. cannot be overemphasized. The threat to their lives and safety is constant, real and
• Along the way, however, they were barred by respondent Major lsabelo Lariosa, felt throughout the world
upon orders of his superior and co-respondent Gen. Santiago Barangan, from • In the case at bar, petitioners are not denied or restrained of their freedom of belief
proceeding any further, on the ground that St. Jude Chapel was located within the or choice of their religion, but only in the manner by which they had attempted to
Malacañang security area. translate the same into action
• Earlier however, another ATOM leader Ramon Pedrosa who was wearing a barong
tagalog had gone through unnoticed to the church with some ten others. (from the SEPARATE OPINIONS
dissent’s facts.. para lang it looks like we actually read all the dissenting opions)
• They then knelt on the pavement in front of the barricade and prayed the holy • FERNANDO, C.J., concurring:
Rosary. Afterwards, they sang Bayan ko with clenched fists of protest against the o The separation of church and state shall be inviolable." The point, I wish
violation of their rights and thereafter dispersed peacefully to make, however, is that had there been no clear manifestation by both
• Having been then warned that any further attempts on their part to enter the church petitioners and respondents that the right to attend mass at St. Jude's
would be similarly barred, they filed the petition at bar (to enter the church), which Church would be respected, even if it is located in a security area but with
was heard and submitted for resolution on October 16, 1984 (rendering moot their due precautionary measures taken to avoid infiltration by subversive
prayer to enter the church on October 12, 1984 but not as to any open subsequent elements, this Court would have been called upon to rule and, if possible,
date, as prayed for). to delineate with some degree of precision the scope of such a right to free
• exercise and enjoyment of religious profession and worship.
ISSUES & ARGUMENTS • TEEHANKEE, J., dissenting:
• W/N Major Lariosa is liable for damages in denying ATOM entry to the St. o I vote to grant the petition on the ground that the right of free worship
Jude Chapel and movement is a preferred right that enjoys precedence and primacy and
o Petitioners: ATOM posits that their purpose in converging at J.P. Laurel is not subject to prior restraint except where there exists the clear and
Street was to pray and hear mass at St. Jude Chapel. present danger of a substantive evil sought to be prevented. There was and
o Respondents: They maintain however, that ATOM's intention was not is manifestly no such danger in this case.
really to perform an act of religious worship, but to conduct an anti- o Over and above all, public officials should ever be guided by the testament
government demonstration at a place close to the very residence and over half a century ago of the late Justice Jose Abad Santos in his
offices of the President of the Republic. Respondents further lament dissenting opinion in People vs. Rubio 13 that the "commendable zeal. . if
petitioners' attempt to disguise their true motive with a ritual as sacred and allowed to override constitutional limitations would become 'obnoxious to
solemn as the Holy Sacrifice of the Mass. Undoubtedly, the yellow T-shirts fundamental principles of liberty.' And if we are to be saved from the sad
worn by some of the marchers, their raised clenched fists, and chants of experiences of some countries which have constitutions only in name, we
anti-government slogans strongly tend to substantiate respondents must insist that governmental authority be exercised within constitutional
allegation limits; for, after all, what matters is not so much what the people write in
their constitutions as the spirit in which they observe their provisions." To
HOLDING & RATIO DECIDENDI require the citizen at every step to assert his rights and to go to court is to
NO. render illusory his rights
Page 302 of 528

o The burden to show the existence of grave and imminent danger that petitioners. The danger existed only in the fertile minds of the overzealous
would justify prior restraint and bar a group of persons from entering the guardians of the complex which is protected by a stout steel fence.
church of their choice for prayer and worship lies on the military or police • MELENCIO-HERRERA, J., dissenting:
officials who would so physically restrain them. Indeed, there is no o The location of the St. Jude Chapel within the perimeter of the Malacañang
precedent in this time and age where churchgoers whose right of free security area is not, to my mind, sufficient reason for a prior restraint on
exercise of their religion is recognized have been physically prevented from petitioners' right to freedom of religious worship. Proper security measures
entering their church on grounds of national security. On the other hand, it can always be taken. It is only when petitioners, in the exercise of their
does not lie within the compentence nor authority of such officials to religious beliefs, exceed those bounds and translate their freedoms into
demand of churchgoers that they show and establish their "sincerity and acts detrimental or inimical to the superior rights of public peace and
good faith . . . . in invoking the constitutional guarantee of freedom of order, that the test of a clear and present danger of a substantive evil is met
religious worship and of locomotion" as a pre-condition, as seems to be and the acts having a religious significance may be infringed upon in the
the thrust of the majority decision. Nor is there any burden on the exercise of the police power of the State. "Freedom of worship is
churchgoer to make "a satisfactory showing of a claim deeply rooted in susceptible of restriction only to prevent grave and immediate danger to
religious conviction" before he may worship at the church of his choice— interests which the State may lawfully protect" (West Virginia State Board
as appears to be the basis of Justice Gutierrez' concurring opinion for of Education vs. Barnette (319 U.S. 624 [1943]).
dismissal of the petition. The exercise of such basic and sacred rights • RELOVA, J., Separate vote and statement.
would be too tenuous if they were made to depend on the snap judgment o The fact that petitioners chose a Tuesday to hear mass and/or pray for
and disposition of such officials as to one's good faith and his attire. In their special intention negates the suspicion that they were out to stage a
fact, Article 132 of the Revised Penal Code penalizes public officers and demonstration.
employees who "prevent or disturb the ceremonies or manifestations of o Respondents should have allowed petitioners to hear mass and/or pray
any religion" while Article 32 of the Civil Code grants an independent and, thereafter, see what they would do. Only then would We know what
cause of action for moral and exemplary damages and "for other were really in their minds. What respondents did by acting before
relief" against such officials or employees or private individuals petitioners could display themselves was tantamount to prohibiting free
"who directly or indirectly obstruct, defeat, violate or in any manner exercise and enjoyment of religious worship. Demonstrations about or
impede or impair (the) freedom of religion (and) freedom of speech" near the premises of St. Jude Chapel because of its proximity to the
of any person. residence of the President may be restricted, but certainly, for petitioners
o or any group of men for that matter, to hear mass and/or pray at the
• MAKASIAR, J., dissenting: chapel should be tolerated.
o The petitioners gave the assurance that they are marching towards St. • GUTIERREZ, JR., J.: concurring:
Jude's Church only for the purpose of praying or attending mass therein; o Any claim to the free exercise of religion must be a genuine or valid one.
that they were and are going to march in an orderly manner without This Court is keenly sensitive to problems arising from the freedom of
blocking the traffic and with the marshals policing and Identifying the religion clause. We examine allegations of its violation to check any
marchers; that they are not armed and are not going to be armed with any infringement of this preferred freedom. A claim based on it should be
kind of weapon; and that they are willing to be frisked. rooted in genuine religious conviction, although as mentioned by Justice
o With the assurances aforestated given by both petitioners and respondents, Ameurfina A. Melencio-Herrera we have to take into account the
there is no clear and present danger to public peace and order or to the presumption of good faith.
security of persons within the premises of Malacañang and the adjacent
areas, as the respondents have adopted measures and are prepared to
insure against any public disturbance or violence.
• ABAD SANTOS, J.,dissenting:

o True it is that the free exercise of religion can be restrained under the clear
and present danger principle. But I fail to perceive the presence of any
clear danger to the security of Malacañang due to the action of the CHESKA RESPICIO
Page 303 of 528

277 Habana v. Robles
G.R. No. 131522 July 19, 1999
FACTS
• Habana was the author and copyright owner of a college textbook entitled “College
English Today” . He discovered that another textbook, which was written by
Robles, was similarly written with regard to the conten, illustrations and examples.
Several pages of Robles’ book was directly plagiarized from his book. Habana sued
Robles for unfair competition, copyright infringement and damages.
ISSUES & ARGUMENTS

• W/N Habana is entitled to damages
Habana is entitled to damages.
Robles is guilty of copyright infringement. Infringment of copyright consists of copying

of anything without the consent of the owner with whom is vested the sole right to do
anything. It may be likened to trespassing wherein a person trespasses on the private
dominion of another. With regard to literary works, such as a book, copyrighting is a
protection given to the intellectual product of an author. In such the copying must be
coupled with an injurious effect.
In the case at bar, even if Robles did not copy all of Habana’s book, if so much is taken
that it substantially reduces the value of the book, then Robles is guilty of infringement.
Robles should have acknowledged Habana as the source, because the copying without
permission is injurious enough.
NINA MEIJA
Page 304 of 528

278 Liwayway Vizons-Chato vs. Fortune Tobacco Corpation| YNARES-
SANTIAGO, J.:
G.R. No. 141309 | June 19, 2007
• Article 32 is the governing provision in determining whether or not
FACTS respondents' complaint had a valid cause of action.
• Petitioner, the Commissioner of Internal Revenue issued RMC 37-93 which
subjected cigarette brands "Champion," "Hope," and "More," to 55% ad valorem • Article 32 was patterned after the "tort" in American law. Presence of good motive,
tax. or rather, the absence of an evil motive, does not render lawful an act which is
otherwise an invasion of another’s legal right; that is, liability in tort is not precluded
• Respondent company filed a petition for review with the Court of Tax Appeals, by the fact that defendant acted without evil intent. The clear intention therefore of
which ultimately ruled that RMC 37-93 as defective, invalid and unenforceable. Such the legislature was to create a distinct cause of action in the nature of tort for
pronouncement was affirmed by the CA and the SC, for being an invalid violation of constitutional rights, irrespective of the motive or intent of the
administrative issuance. defendant.
• While the Civil Code, specifically, the Chapter on Human Relations is a general law,
• Thereafter, respondent filed with the RTC a complaint for damages against Article 32 of the same Chapter is a special and specific provision that holds a public
petitioner in her private capacity, under Article 32, considering that the issuance of officer liable for and allows redress from a particular class of wrongful acts that may
the RMC violated the constitutional right of the respondent against deprivation of be committed by public officers.
property without due process of law and the right to equal protection of the laws.
• Compared thus with Section 38 of the Administrative Code, which broadly deals
• Petitioner's motion to dismiss was denied by the RTC, and eventually the case got to with civil liability arising from errors in the performance of duties, Article 32 of the
the SC, wherein it is contended that it is Section 38, Book I of the Administrative Civil Code is the specific provision which must be applied in the instant case
Code which should be applied. Under this provision, liability will attach only when precisely filed to seek damages for violation of constitutional rights.
there is a clear showing of bad faith, malice, or gross negligence.
• The complaint in the instant case was brought under Article 32 of the Civil Code.
ISSUES Considering that bad faith and malice are not necessary in an action based on Article
32 of the Civil Code, the failure to specifically allege the same will not amount to
Is petitioner liable in his/her private capacity for acts done in connection with the failure to state a cause of action. The courts below therefore correctly denied the
discharge of the functions of his/her office? motion to dismiss on the ground of failure to state a cause of action, since it is
enough that the complaint avers a violation of a constitutional right of the plaintiff.
Does Article 32 of the NCC, or Sec 38, Book I of the Admin Code should govern
in determining whether the instant complaint states a cause of action? Petition denied.
• Petitioner in the case at bar is liable for damages.
• Although the general rule provides that a public officer is not liable for damages
which a person may suffer arising from the just performance of his official duties
and within the scope of his assigned tasks, there are exceptions to such,
(1) where said public officer acted with malice, bad faith, or negligence; or
(2) where the public officer violated a constitutional right of the plaintiff.
The second exception is clearly applicable in the instant case.

JR RUIZ
Page 305 of 528

279 Liwayway Vinzons-Chato vs. Fortune Tobacco Corporation| Nachura counsel in violation of the rule that it is the plaintiff or the principal party who
G.R. No. 141309 December 23, 2008| should sign the same.
• On September 29, 1997, the RTC denied petitioner's motion to dismiss; the case
FACTS was subsequently elevated to the Court of Appeals via a petition for certiorari under
• On June 10, 1993, the legislature enacted Republic Act No. 7654 (RA 7654), Rule 65. However, same was dismissed on the ground that under Article 32 of the
which took effect on July 3, 1993. Prior to its effectivity, cigarette brands Civil Code, liability may arise even if the defendant did not act with malice or bad
'Champion," "Hope," and "More" were considered local brands subjected to an ad faith. [It seems that in effect both RTC and CA ruled in favor of Fortune
valorem tax at the rate of 20-45%. However, on July 1, 1993, or two days before Tobacco and held Vinzons-Chato liable for damages under Art. 32 of NCC)
RA 7654 took effect, petitioner issued RMC 37-93 reclassifying "Champion," • In a decision dated June 19, 2007, SC affirmed the decision of the CA. MR
"Hope," and "More" as locally manufactured cigarettes bearing a foreign brand denied, petitioner filed, on April 29, 2008 her Motion to Refer [the case] to the
subject to the 55% ad valorem tax. RMC 37-93 in effect subjected "Hope," "More," Honorable Court En Banc. She contends that the petition raises a legal question
and "Champion" cigarettes to the provisions of RA 7654, specifically, to Sec. 142, that is novel and is of paramount importance. The earlier decision rendered by the
(c)(1) on locally manufactured cigarettes which are currently classified and taxed at Court will send a chilling effect to public officers, and will adversely affect the
55%, and which imposes an ad valorem tax of "55% provided that the minimum tax performance of duties of superior public officers in departments or agencies with
shall not be less than Five Pesos (P5.00) per pack." rule-making and quasi-judicial powers. With the said decision, the Commissioner of
• On July 2, 1993, at about 5:50 p.m., BIR Deputy Commissioner Victor A. Internal Revenue will have reason to hesitate or refrain from performing his/her
Deoferio, Jr. sent via telefax a copy of RMC 37-93 to Fortune Tobacco but it official duties despite the due process safeguards in Section 228 of the National
was addressed to no one in particular. On July 15, 1993, Fortune Tobacco received, Internal Revenue Code. Petitioner hence moves for the reconsideration of the June
by ordinary mail, a certified xerox copy of RMC 37-93. On July 20, 1993, 19, 2007 Decision.
respondent filed a motion for reconsideration requesting the recall of RMC
37-93, but was denied in a letter dated July 30, 1993. The same letter assessed ISSUES & ARGUMENTS
respondent for ad valorem tax deficiency amounting to P9,598,334.00 • Can a public officer, in particular, BIR, be held liable for damages under Art.
(computed on the basis of RMC 37-93) and demanded payment within 10 32 of NCC for violating the respondent’s consti right against deprivation of
days from receipt thereof. On August 3, 1993, respondent filed a petition for property without due process of law and the right to equal protection of the
review with the Court of Tax Appeals (CTA), which on September 30, 1993, laws, on the basis of the court’s decision holding that the RMC issued by said
issued an injunction enjoining the implementation of RMC 37-93. In its official is defective, invalid and unenforceable?
decision dated August 10, 1994, the CTA ruled that RMC 37-93 is defective,
invalid, and unenforceable and further enjoined petitioner from collecting the HOLDING & RATIO DECIDENDI
deficiency tax assessment issued pursuant to RMC No. 37-93. This ruling
was affirmed by the Court of Appeals, and finally by this Court in NO. When what is involved is a "duty owing to the public in general", an
Commissioner of Internal Revenue v. Court of Appeals. It was held, among individual cannot have a cause of action for damages against the public officer,
others, that RMC 37-93, has fallen short of the requirements for a valid even though he may have been injured by the action or inaction of the officer.
administrative issuance. The remedy in this case is not judicial but political. The exception to this rule
• On April 10, 1997, respondent filed before the RTC a complaint for damages occurs when the complaining individual suffers a particular or special injury on
against petitioner in her private capacity. Respondent contended that the latter account of the public officer's improper performance or non-performance of his
should be held liable for damages under Article 32 of the Civil Code public duty.
considering that the issuance of RMC 37-93 violated its constitutional right • There are two kinds of duties exercised by public officers: the "duty owing to the
against deprivation of property without due process of law and the right to public collectively" (the body politic), and the "duty owing to particular individuals,
equal protection of the laws. thus:
• Petitioner filed a motion to dismiss contending that: (1) respondent has no cause of 1. Of Duties to the Public. – The first of these classes embraces those
action against her because she issued RMC 37-93 in the performance of her official officers whose duty is owing primarily to the public collectively --- to the
function and within the scope of her authority. She claimed that she acted merely as body politic --- and not to any particular individual; who act for the public
an agent of the Republic and therefore the latter is the one responsible for her acts; at large, and who are ordinarily paid out of the public treasury. The officers
(2) the complaint states no cause of action for lack of allegation of malice or bad whose duties fall wholly or partially within this class are numerous and the
faith; and (3) the certification against forum shopping was signed by respondent's distinction will be readily recognized.
Page 306 of 528
personally liable for damages on account of an act or omission that
Thus, the governor owes a duty to the public to see that the laws are violates a constitutional right only if it results in a particular wrong or
properly executed, that fit and competent officials are appointed by him, injury to the former. This is consistent with this Court's pronouncement in its
that unworthy and ill-considered acts of the legislature do not receive his June 19, 2007 Decision (subject of petitioner's motion for reconsideration) that
approval, but these, and many others of a like nature, are duties which he Article 32, in fact, allows a damage suit for "tort for impairment of rights and
owes to the public at large and no one individual could single himself out liberties."
and assert that they were duties owing to him alone. So, members of the • It may be recalled that in tort law, for a plaintiff to maintain an action for
legislature owe a duty to the public to pass only wise and proper laws, but damages for the injuries of which he complains, he must establish that such
no one person could pretend that the duty was owing to himself rather injuries resulted from a breach of duty which the defendant owed the plaintiff,
than to another. Highway commissioners owe a duty that they will be meaning a concurrence of injury to the plaintiff and legal responsibility by the
governed only by considerations of the public good in deciding upon the person causing it. Indeed, central to an award of tort damages is the premise
opening or closing of highways, but it is not a duty to any particular that an individual was injured in contemplation of law.
individual of the community. • In the instant case, what is involved is a public officer's duty owing to
the public in general. The petitioner, as the then Commissioner of the Bureau
2. Of Duties to Individuals. - The second class above referred to includes of Internal Revenue, is being taken to task for Revenue Memorandum Circular
those who, while they owe to the public the general duty of a proper (RMC) No. 37-93 which she issued without the requisite notice, hearing and
administration of their respective offices, yet become, by reason of their publication, and which, in Commissioner of Internal Revenue v. Court of
employment by a particular individual to do some act for him in an official Appeals, we declared as having "fallen short of a valid and effective
capacity, under a special and particular obligation to him as an individual. administrative issuance." A public officer, such as the petitioner, vested
They serve individuals chiefly and usually receive their compensation from with quasi-legislative or rule-making power, owes a duty to the public to
fees paid by each individual who employs them. promulgate rules which are compliant with the requirements of valid
administrative regulations. But it is a duty owed not to the respondent
A sheriff or constable in serving civil process for a private suitor, a alone, but to the entire body politic who would be affected, directly or
recorder of deeds in recording the deed or mortgage of an individual, a indirectly, by the administrative rule.
clerk of court in entering up a private judgment, a notary public in • Furthermore, as discussed above, to have a cause of action for damages
protesting negotiable paper, an inspector of elections in passing upon the against the petitioner, respondent must allege that it suffered a particular
qualifications of an elector, each owes a general duty of official good or special injury on account of the non-performance by petitioner of the
conduct to the public, but he is also under a special duty to the particular public duty. A careful reading of the complaint filed with the trial court
individual concerned which gives the latter a peculiar interest in his due reveals that no particular injury is alleged to have been sustained by the
performance. respondent. The phrase "financial and business difficulties" mentioned
in the complaint is a vague notion, ambiguous in concept, and cannot
• An individual can never be suffered to sue for an injury which, technically, is translate into a "particular injury." In contrast, the facts of the case
one to the public only; he must show a wrong which he specially suffers, and eloquently demonstrate that the petitioner took nothing from the respondent,
damage alone does not constitute a wrong. A contrary precept (that an as the latter did not pay a single centavo on the tax assessment levied by the
individual, in the absence of a special and peculiar injury, can still institute an former by virtue of RMC 37-93.
action against a public officer on account of an improper performance or non- • The complaint in this case does not impute bad faith on the petitioner. Without
performance of a duty owing to the public generally) will lead to a deluge of any allegation of bad faith, the cause of action in the respondent's complaint
suits, for if one man might have an action, all men might have the like-the (specifically, paragraph 2.02 thereof) for damages under Article 32 of the Civil
complaining individual has no better right than anybody else. If such were the Code would be premised on the findings of this Court in Commissioner of
case, no one will serve a public office. Thus, the rule restated is that an Internal Revenue v. Court of Appeals (CIR v. CA), where we ruled that RMC
individual cannot have a particular action against a public officer without a No. 37-93, issued by petitioner in her capacity as Commissioner of Internal
particular injury, or a particular right, which are the grounds upon which all Revenue, had "fallen short of a valid and effective administrative issuance."
actions are founded. • If we divest the complaint of its reliance on CIR v. CA, what remains of
• Juxtaposed with Article 32 of the Civil Code, the principle may now respondent's cause of action for violation of constitutional rights would be
translate into the rule that an individual can hold a public officer paragraph 2.01, which reads:
Page 307 of 528

2.01. On or about July 1, 1993, defendant issued Revenue
Memorandum Circular No. 37-93 (hereinafter referred to as RMC No.
37-93) reclassifying specifically "Champion", "Hope" and "More" as
locally manufactured cigarettes bearing a foreign brand. A copy of the
aforesaid circular is attached hereto and made an integral part hereof
as ANNEX "A". The issuance of a circular and its implementation
resulted in the "deprivation of property" of plaintiff. They were done
without due process of law and in violation of the right of plaintiff to
the equal protection of the laws. (Italics supplied.)
• But, as intimated above, the bare allegations, "done without due process of law"
and "in violation of the right of plaintiff to the equal protection of the laws" are
conclusions of law. They are not hypothetically admitted in petitioner's motion
to dismiss and, for purposes of the motion to dismiss, are not deemed as facts.
• Furthermore, in an action for damages under Article 32 of the Civil Code
premised on violation of due process, it may be necessary to harmonize the
Civil Code provision with subsequent legislative enactments, particularly those
related to taxation and tax collection. Judicial notice may be taken of the
provisions of the National Internal Revenue Code, as amended, and of the law
creating the Court of Tax Appeals. Both statutes provide ample remedies to
aggrieved taxpayers; remedies which, in fact, were availed of by the respondent-
without even having to pay the assessment under protest-as recounted by this
Court in CIR v. CA. The availability of the remedies against the assailed
administrative action, the opportunity to avail of the same, and actual
recourse to these remedies, contradict the respondent's claim of due
process infringement.
• The Court discussed the American jurisprudence on this matter and in
summary it provides that “when the design of a Government program suggests
that Congress has provided what it considers adequate remedial mechanisms
for constitutional violations that may occur in the course of its administration,
additional Bivens remedies (Art. 32 of NCC in the Philippines) cannot be
claimed.
• Lastly, citing Section 227 of RA 8424 (Tax Reform Act of 1997) which
provides that any judgment, damages or costs recovered in an action
brought against any Internal Revenue officer shall be satisfied by the
Commissioner, upon approval of the Secretary of Finance, or if the same
be paid by the person sued shall be repaid or reimbursed to him. The
exception being where the person has acted negligently or in bad faith,
or with willful oppression. Because the respondent's complaint does not
impute negligence or bad faith to the petitioner, any money judgment by
the trial court against her will have to be assumed by the Republic of the
Philippines. As such, the complaint is in the nature of a suit against the
State.
Petitioner’s MR is GRANTED and the case pending in the RTC against the
former (for damages under Art. 32) is DISMISSED. TEL VIRTUDEZ
Page 308 of 528

280 Gilchrist vs. Cuddy, 29 Phil. 542 | TRENT, J. knowledge is required in order that the injured party may recover for the damage
suffered.
FACTS:
• Cuddy was the owner of the film “Zigomar” and that on the 24th of April 1913 he
rented it to C. S. Gilchrist for a week for P125, and it was to be delivered on the
26th of May 1913, the week beginning that day. Gilchrist paid the rental payment in
advance.
• A few days prior to this (26th of May 1913) Cuddy sent the money back to Gilchrist,
which he had forwarded to him in Manila, saying that he had made other
arrangements with his film.
• The other arrangements was the rental to the partners Jose Espejo and his partner
Mariano Zaldriagga for P350 for the week.
• An injunction was asked by Gilchrist against these parties from showing it for the
week beginning the 26th of May.
ISSUE:
Whether or not the partners Espejo and Zaldriagga are liable to Gilchrist for damages
because of interference in the contractual relation between Gilchrist and Cuddy?
HOLDING & RATIONALE:
YES.
• The only motive for the interference with the Gilchrist - Cuddy contract on the part
of the appellants was a desire to make a profit by exhibiting the film in their theater.
There was no malice beyond this desire; but this fact does not relieve them of the legal
liability for interfering with that contract and causing its breach. It is, therefore, clear, that
they are liable to Gilchrist for the damages caused by their acts.
• The liability of the Espejo and Zaldriagga arises from unlawful acts and not from
contractual obligations, as they were under no such obligations to induce Cuddy to
violate his contract with Gilchrist. So that if the action of Gilchrist had been one for
damages, it would be governed by chapter 2, title 16, book 4 of the Civil Code.
Article 1902 of that code provides that a person who, by act or omission, causes
damages to another when there is fault or negligence, shall be obliged to repair the
damage so done.
• There is nothing in this article which requires as a condition precedent to the liability
of a tort-feasor that he must know the identity of a person to whom he causes
BYRON PEREZ
damages. In fact, the chapter wherein this article is found clearly shows that no such
Page 309 of 528
281 Daywalt v. Corporacion De Los Padres Agustinos Recoletos |Street ISSUES & ARGUMENTS:
G.R. L-13505, Feb. 4, 1919 | 39 Phil 587 • W/N petitioner is entitled to P24,000 as compensation for pasturing cattle
from 1909 to 1913.
FACTS • W/N respondent is liable for interference in contractual relations.
• In 1902, plaintiff and Teodorica Endencia entered into a contract for the HOLDING & RATIO DECIDENDI
conveyance of a tract of land owned by the latter to the former; the deed should be
executed as soon as the title to the land should be perfected by proceedings in the 1. No. It is improbable to pasture 1,000 cattle in 1,248 ha of wild Mindoro land.
Court of Land Registration and a Torrens certificate should be produced in the There is no reason to suppose that the value of the property was more (40¢ per head
name of Endencia. monthly) before the petitioner obtained possession of it and from which respondent
• In 1906, a decree in favor of Endencia was entered but no Torrens title was issued. rented it at 50¢ per hectare annually.
Upon entry of the decree, Daywalt and Endencia entered into another contract with
a view to carry out the original agreement into effect. The 2nd contract was not 2. No. Defendants believed in good faith that the contract could not be enforced and
executed since no Torrens title was issued until the period for performance that Teodorica would be wronged if it should be carried into effect. Any advice or
contemplated in the contract expired. assistance which they may have given was prompted by no mean or improper
• In 1908, a 3rd agreement was entered into: that upon receiving the Torrens title, motive. Teodorica would have surrendered the documents of title and given
Endencia was to deliver the same to the Hongkong and Shanghai Bank in Manila, to possession of the land but for the influence and promptings of members of the
be forwarded to the Crocker National Bank in San Francisco, where it was to be defendants corporation. But the idea that they were in any degree influenced to the
delivered to the plaintiff upon payment of a balance of P3,100. giving of such advice by the desire to secure to themselves the paltry privilege of
• In the course of the proceedings for the issuance of the Torrens title, it was found grazing their cattle upon the land in question to the prejudice of the just rights of
that the boundaries inclosed was 1,248 ha instead of 452 ha stated in the contract. the plaintiff can’t be credited.
As such, after the issuance of the Torrens title, Endencia was reluctant to convey
the title to Daywalt, contending that she did not intend to transfer as big a property • What constitutes legal justification for interference - If a party enters into contract to
as that contained in the title and that she was misinformed of its area. go for another upon a journey to a remote and unhealthful climate, and a third
• Daywalt filed an action against Endencia for specific performance. On appeal person, with a bona fide purpose of benefiting the one who is under contract to go,
before the SC, Daywalt obtained a favorable decision, However, no damages was dissuades him from the step, no action will lie. But if the advice is not disinterested
sought or awarded in the case against Endencia. and the persuasion is used for "the indirect purpose of benefiting the defendant at
• Daywalt filed an action against respondent for interference in contractual relations the expense of the plaintiff," the intermedler is liable if his advice is taken and the
based on the ff. background: contract broken.
o Respondent was the original owner of the property and owned an • If performance is prevented by unlawful means such as force, intimidation,
adjacent tract of land managed by Fr. Sanz, a member of the Order. coercion, or threats, or by false or defamatory statements, or by nuisance or riot, the
o Fr. Sanz was well acquainted with Endencia and exerted over her an person is, under all the authorities, liable for the damage which ensues.
influence and ascendency due to his religious character as well as to • Whatever may be the character of the liability which a stranger to a contract may
the personal friendship which existed between them. Teodorica incur by advising or assisting one of the parties to evade performance, the stranger
appears to be a woman of little personal force. cannot become more extensively liable in damages for the nonperformance of the
o Fr. Sanz was fully aware of the contracts with Endencia and with its contract than the party in whose behalf he intermeddles.
developments. o As to damages, the defense of res judicata of the case between
o Between 1909 and 1914, large number of cattle of respondent was plaintiff and Endencia cannot apply to the defendant who was not a
pastured in the subject property. party thereto. Damages recoverable in case of the breach of a
o When the Torrens title was issued, it was delivered to respondent for contract are two sorts, namely, (1) the ordinary, natural, and in a sense
safekeeping and only turned it over upon order of the SC in 1914. necessary damage; and (2) special damages.
o Ordinary damages is found in all breaches of contract where there are

no special circumstances to distinguish the case specially from other
contracts. The consideration paid for an unperformed promise is an
Page 310 of 528
instance of this sort of damage. In all such cases the damages
recoverable are such as naturally and generally would result from such
a breach, "according to the usual course of things." In case involving
only ordinary damage no discussion is ever indulged as to whether
that damage was contemplated or not. This is conclusively presumed
from the immediateness and inevitableness of the damage, and the
recovery of such damage follows as a necessary legal consequence of
the breach. Ordinary damage is assumed as a matter of law to be
within the contemplation of the parties.
o Special damage, is such as follows less directly from the breach than
ordinary damage. It is only found in case where some external
condition, apart from the actual terms to the contract exists or
intervenes, as it were, to give a turn to affairs and to increase damage
in a way that the promisor, without actual notice of that external
condition, could not reasonably be expected to foresee
o Damages claimed could not be recovered from her, first, because the
damages in question are special damages which were not within
contemplation of the parties when the contract was made, and
secondly, because said damages are too remote to be the subject of
recovery.
• By advising Teodorica not to perform the contract, said corporation could in no

event render itself more extensively liable than the principle in the contract.
AYEN QUA
Page 311 of 528

282 People’s Bank vs. Dahican Lumber |
20 SCRA 84
FACTS
• Atlantic Gulf and Pacific Company of Manila sold and assigned all its rights in the
Dahican Lumber Concession to Dahican Lumber Company (DALCO) for$ 500,000
• Out of this amount, only $50,000 was paid
• Dalco loaned money from People’s Bank & Trust Company and as a security, a
deed of mortgage covering 5 parcels of land was executed
• Dalco executed a second mortgage on the same properties in favor of ATLANTIC
to secure payment of its unpaid balance of the sale price of the lumber concession
• The deed contained a provision to the effect that all property of every nature and
description within the mortgaged property shall also be subject to said mortgage and
the mortgagor shall furnish mortgagee an accurate inventory of all substituted and
subsequently acquired property.
• DALCO failed to pay its fifth promissory note upon maturity; the bank gave it up to
April 1, 1953 to pay.
• DALCO bought various machinery and equipment in addition and as replacement
to what it already owns. Pursuant to their agreement, the BANK demanded
DALCO to submit a list of the properties they acquired but it failed to do so.
• The Board of Directors of DALCO passed a resolution to rescind abovementioned
sales. Agreements of Rescission of sale were executed by Connel.
• On January 13,1953 the bank and Atlantic demanded that the rescission agreements
be cancelled but Connel and DALCO refused. The Bank commenced foreclosure
proceedings.
• ISSUE: W/N defendants are liable for damages for being guilty of an attempt
to defraud the plaintiff when they sought to rescind the sales in order to
defeat the mortgage lien
YES. Defendants’ liability for damages is clear.

• The execution of rescission of sale appears to be an attempt to improve
Connel and DALCO’s position by enabling the to assume the role of
unpaid suppliers and claim a vendor’s lien over the after acquired
properties.
• As to the plaintiff’s right to recover damages, the law provides that
creditors are protected in case of contracts intended to defraud them and
that any third person who induces another to violate his contract shall be
liable to damages to the other contracting party. Similar liability is
demandeable under Arts. 20 and 21.
DEANNE REYES
Page 312 of 528

283 Rubio vs. CA | Gutierrez, Jr. of the letter, the negotiations on the sale of the shares of stock of Hacienda
G.R. No. L-50911, March 12, 1986 | Benito to Alfonso Yuchengco continued.
• All the details of the negotiations in the sale of the shares of stock of Hacienda
FACTS Benito, Inc. from Phillips and Sons to Mr. Yuchengco, there is no factual or legal
• A TRO was issued against the defendant to prevent and restrain them from further basis for the appellate court's conclusion that the petitioner unlawfully and
unlawfully and willfully interference with the transaction between the plaintiff inofficiously interfered with the negotiations
corporation with Alfonso T. Yuchengco on the sale of the shares of stock of • There is no reason why the petitioner should be accused of unlawful interference in
Hacienda Benito, Inc., maintaining his stand regarding the sale of shares of stock of Hacienda Benito, Inc.
• It appears that the Perez Rubio spouses owned shares of stock in Hacienda Benito, that he still had the option to rescind the contract between him and Phillips
Inc. The Perez Rubios, sold said shares to Robert O. Phillips and Sons, Inc. for and Sons and stating the existence of his vendor's hen over said shares of
P5,500,000.00 payable in installments stock
• Robert O. Phillips, in his behalf and in that of his wife and Robert O. Phillips and • The petitioner never pretended that he still had full control of the shares of stock
Sons, Inc., entered into negotiations for the sale of their shares of stock in Hacienda which he sold to Phillips and Sons. He in fact admitted that the shares of stock were
Benito, Inc. to Alfonso Yuchengco. Upon being informed of this, the Perez Rubios, already transferred to the corporation and that he did not have a recorded lien
through their attorney-in-fact, Joaquin Ramirez, reminded the Phillips spouses and therein. He merely made of record his right to rescind under the original contract of
the Phillips corporation in writing of their obligations under the contract of sale sale. The details pertaining to the earlier transaction governing the sale of the
reminded them in particular that the shares subject matter thereof were still subject shares of stock between the petitioner and Phillips and Sons were in fact, all
to the payment of the unpaid balance of the sale price known to Yuchengco. And, more important, it is obvious from the records
• The Phillips (individuals and corporation), through their attorney, Juan T. David, that the petitioner's interest was only in the payment of the P4,250,000.00
sent a letter to the Perez Rubios telling them, in substance, that the only obstacle to balance due him from Phillips and Sons.
the consummation of the Phillips-Yuchengco sale of the shares of stock of • He had the right to refuse to withdraw the November 24, 1964 letter. We see
Hacienda Benito, Inc. was their letter of November 24, 1964 and warned that nothing illegal or inofficious about the letter or the refusal to withdraw it.
unless the same was withdrawn by March 29, they would seek redress
elsewhere. Perez Rubio did not withdraw the letter.
• Because of the issuance of a preliminary injunction ex parte which restrained
petitioner Perez Rubio from interfering with the Yuchengco transaction and the
denial of a motion to dissolve the injunction petitioner Perez Rubio was constrained
to file a petition for certiorari with this Court alleging that the lower court
committed a grave abuse of discretion in issuing the preliminary injunction
ISSUES & ARGUMENTS
• W/N the Perez Rubio unlawfully interfered in the transaction between
Philips and Yuchengco
No, he is not liable.

• A thorough examination of the record reveals that the factual findings of the
appellate court are incomplete and do not reflect the actual events that transpired
concerning the sale of shares of stock of Hacienda Benito to Alfonso Yuchengco.
• The important point left out by the appellate court refers to the controversial letter
of the petitioner to Phillips and Sons and to the Phillips spouses wherein the
petition stated that he has a vendor's lien over the shares of stock of Hacienda
Benito and that he still has the option to rescind the contract as regards his sale of
stock of the Hacienda. A copy of the letter was sent to Alfonso Yuchengeo, the
prospective buyer of the shares of stock of Hacienda Benito, but even after receipt GINO CAPATI
Page 313 of 528

284 Laforteza vs Machuca | Gonzaga-Reyes
G.R. No.137552 16 June 2000| HOLDING & RATIO DECIDENDI
FACTS Yes.
• The property involved in this case consists of a house and lot located at Green The Court of Appeals correctly found the petitioners guilty of bad faith and awarded
Village Paranaque City, registered in the name of Francisco Laforteza. moral damages to the respondent. As found by the said court, the petitioners refused to
• On August 2, 1988, defendant Lea Laforteza executed a special power of attorney in comply with their obligation for the reason that they were offered a higher price
favor of defendants Roberto and Gonzalo Laforteza, appointing both as her therefore and the respondent was even offered P100,000 by the petitioners’ lawyer, Atty.
Attorney in fact and authorizing them jointly to sell the subject property and sign Gutierrez, to relinquish his rights over the peoperty.
any document for the settlement of the estate of the late Francisco Laforteza.
• On the same day, defendant Michael Laforteza executed a Special Power of The award of moral damages is in accordance with Art 1191 of the New Civil Code to
Attorney in favor of defendant Roberto Laforteza for the purpose of sellng the Art 2220 which provides that moral damages may be awarded in case of a breach of
subject property. contract where the defendant acted in bad faith. The amount awarded depends on the
• On October 27, 1988, defendant Dennis Laforteza executed a Special Power of discretion of the court based on the circumstances of each case. Under the
Attorney in favor of defendant Roberto Laforteza for the purpose of selling the circumstances, the award given by the Court of Appeals amounting to P50,000 is fair and
property. reasonable.
• In the exercise of the above authority, Roberto and Gonzalo entered into a Contract
to sell with the plaintiff over the subject property for the sum of P 630,000.
P30,000 was paid as earnest money which is to be forfeited if the sale is not effected
due to the fault of the plaintiff. P660,000 shall be paid upon issuance of the new
Certificate of title in the name of the late Francisco Laforteza and upon execution of
the extra judicial partition.
• On January 20, 1989 the plaintiff paid the earnest money. On September 18, 1989
the plaintiff sent the defendant a letter stating that his request for an extension of
thirty days within which to produce the balance of P660,000.
• On November 15, 1989 plaintiff informed the defendant heirs through Roberto
Laforteza that he already had the balance of P660,000.
• The defendants refused to accept the balance. Defendant Roberto Laforteza
informed him that the subject property was no longer for sale.
• On November 20, 1998, the defendants informed the plaintiff that they are
canceling the contract to sell in view of the plaintiffs failure to comply with his
contractual obligations.
• Plaintiff reiterated his request to tender payment for the balance. The defendants
still insisted to rescind the contract.
• The plaintiff filed the instant action for specific performance. The lower court ruled
in favor of the plaintiff.
• A motion for reconsideration was filed but it was denied. The judgement was
modified so as to absolve Gonzalo Laforteza from paying damages.
ISSUES & ARGUMENTS
Whether the petitioners are in bad faith so as to make them liable for damages?
SATURDAY ALCISO
Page 314 of 528
285 So Ping Bun vs. CA March 1, 1991
GR No. 120554. September 21, 1999 / J. Quisimbing Dear Mr. So,
Due to my closed (sic) business associate (sic) for three decades with your late
Topic: grandfather Mr. So Pek Giok and late father, Mr. So Chong Bon, I allowed you
Interference in Contractual Relation (Under Article 1314, New Civil Code) temporarily to use the warehouse of Tek Hua Enterprising Corp. for several years to
generate your personal business.
Synopsis: Since I decided to go back into textile business, I need a warehouse immediately for
Tek Hua Enterprises is the lessee of Dee C. Chuan & Sons, Inc. in the latter’s premises in my stocks. Therefore, please be advised to vacate all your stocks in Tek Hua
Binondo but it was So Ping Bun who was occupying the same for his Trendsetter Marketing. Later, Mr. Enterprising Corp. Warehouse. You are hereby given 14 days to vacate the premises
Manuel Tiong asked So Ping Bun to vacate the premises but the batter refused and entered into formal unless you have good reasons that you have the right to stay. Otherwise, I will be
contracts of lease with DCCSI. In a suit for injunction, private respondents pressed for the nullification constrained to take measure to protect my interest.
of the lease contracts between DCCSI and petitioner, and for damages. The trial court ruled in favor of Please give this urgent matter your preferential attention to avoid inconvenience on
private respondents and the same was affirmed by the Court of Appeals. your part.
There was tort interference in the case at bar as petitioner deprived respondent corporation of the Very truly yours,
latter’s property right. However, nothing on record imputed malice on petitioner; thus, precluding (Sgd) Manuel C. Tiong
damages. But although the extent of damages was not quantifiable, it does not relieve petitioner of the • Petitioner refused to vacate. On March 4, 1992, petitioner requested formal
legal liability for entering into contracts and causing breach of existing ones. Hence, the Court confirmed contracts of lease with DCCSI in favor Trendsetter Marketing. So Ping Bun claimed
the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter that after the death of his grandfather, So Pek Giok, he had been occupying the
Marketing. premises for his textile business and religiously paid rent. DCCSI acceded to
FACTS: petitioner’s request. The lease contracts in favor of Trendsetter were executed.
• In the suit for injunction, private respondents pressed for the nullification of the
• In 1963, Tek Hua Trading Co, through its managing partner, So Pek Giok, entered lease contracts between DCCSI and petitioner and as well prayed for damages. The
into lease agreements with lessor Dee C. Chuan & Sons Inc. (DCCSI). Subjects of Trial Court ruled in their favor as upheld by the Court of Appeals.
four (4) lease contracts were premises located at Soler Street, Binondo, Manila. Tek ISSUE:
Hua used the areas to store its textiles. The contracts each had a one-year term.
They provided that should the lessee continue to occupy the premises after the WHETHER THE APPELLATE COURT ERRED IN AFFIRMING THE
term, the lease shall be on a month-to-month basis. TRIAL COURT’S DECISION FINDING SO PING BUN GUILTY OF
• When the contracts expired, the parties did not renew the contracts, but Tek Hua TORTUOUS INTERFERENCE OF CONTRACT (Given that no award for
continued to occupy the premises. In 1976, Tek Hua Trading Co. was dissolved. damages were given to the private respondents)?
Later, the original members of Tek Hua Trading Co. including Manuel C. Tiong,
formed Tek Hua Enterprising Corp., herein respondent corporation. HOLDING & RATIO DECIDENDI
• So Pek Giok, managing partner of Tek Hua Trading, died in 1986. So Pek Giok’s
grandson, petitioner So Ping Bun, occupied the warehouse for his own textile PETITION IS DENIED.
business, Trendsetter Marketing.
• On August 1, 1989, lessor DCCSI sent letters addressed to Tek Hua Enterprises, The CA did not err in its decision. There can still be tortuous interference despite no award
informing the latter of the 25% increase in rent effective September 1, 1989. The for damages were given by the Court.
rent increase was later on reduced to 20% effective January 1, 1990, upon other
lessees’ demand. Again on December 1, 1990, the lessor implemented a 30% rent Damage is the loss, hurt, or harm which results from injury, and damages are
increase. Enclosed in these letters were new lease contracts for signing. DCCSI the recompense or compensation awarded for the damage suffered. One becomes liable
warned that failure of the lessee to accomplish the contracts shall be deemed as lack in an action for damages for a non-trespassory invasion of another’s interest in the
of interest on the lessee’s part, and agreement to the termination of the lease. private use and enjoyment of asset if (a) the other has property rights and privileges with respect to
Private respondents did not answer any of these letters. Still, the lease contracts the use or enjoyment interfered with, (b) the invasion is substantial, (c) the defendant’s conduct is a legal
were not rescinded. cause of the invasion, and (d) the invasion is either intentional and unreasonable or unintentional and
• On March 1, 1991, private respondent Tiong sent a letter to petitioner, which reads actionable under general negligence rules. The elements of tort interference are: (1) existence of
as follows:
Page 315 of 528
valid contract; (2) knowledge on the part of the third person of the existence of contract; and (3)
interference of the third person is without legal justification or excuse.
In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI
to lease the warehouse to his enterprise at the expense of respondent corporation.
Though petitioner took interest in the property of respondent corporation and benefited
from it, nothing on record imputes deliberate wrongful motives or malice on him.
Section 1314 of the Civil Code categorically provides also that, “Any third person
who induces another to violate his contract shall be liable for damages to the other contracting party.”
Petitioner argues that damage is an essential element of tort interference, and since the
trial court and the appellate court ruled that private respondents were not entitled to
actual, moral or exemplary damages, it follows that he ought to be absolved of any
liability, including attorney’s fees.
It is true that the lower courts did not award damages, but this was only because
the extent of damages was not quantifiable. We had a similar situation in Gilchrist, where
it was difficult or impossible to determine the extent of damage and there was nothing
on record to serve as basis thereof. In that case we refrained from awarding damages.
We believe the same conclusion applies in this case.
While we do not encourage tort interferers seeking their economic interest to
intrude into existing contracts at the expense of others, however, we find that the
conduct herein complained of did not transcend the limits forbidding an obligatory
award for damages in the absence of any malice. The business desire is there to make
some gain to the detriment of the contracting parties. Lack of malice, however,
precludes damages. But it does not relieve petitioner of the legal liability for entering
into contracts and causing breach of existing ones. The respondent appellate court
correctly confirmed the permanent injunction and nullification of the lease contracts
between DCCSI and Trendsetter Marketing, without awarding damages. The injunction
saved the respondents from further damage or injury caused by petitioner’s interference.
JOY ADRANEDA
Page 316 of 528

286 Lagon vs. CA and Lapuz| Corona • The second and third elements are not present. Petitioner conducted his own
G.R. No. 119107, March 18, 2005 | personal investigation and inquiry, and unearthed no suspicious circumstance that
would have made a cautious man probe deeper and watch out for any conflicting
FACTS claim over the property. An examination of the entire property’s title bore no
• Petitioner Jose Lagon purchased from the estate of Bai Tonina Sepi, through an indication of the leasehold interest of private respondent. Even the registry of
intestate court, two parcels of land located at Tacurong, Sultan Kudarat. A few property had no record of the same.
months after the sale, private respondent Menandro Lapuz filed a complaint for • The records do not support the allegation of private respondent that petitioner
torts and damages against petitioner before the RTC of Sultan Kudarat. induced the heirs of Bai Tonina Sepi to sell the property to him. Records show that
• Respondent claimed that he entered into a contract of lease with the late Bai Tonina the decision of the heirs of the late Bai Tonina Sepi to sell the property was
Sepi Mengelen Guiabar over three parcels of land. One of the provisions agreed completely of their own volition and that petitioner did absolutely nothing to
upon was for private respondent to put up commercial buildings which would, in influence their judgment. Private respondent himself did not proffer any evidence
turn, be leased to new tenants. The rentals to be paid by those tenants would answer to support his claim. In short, even assuming that private respondent was able
for the rent private respondent was obligated to pay Bai Tonina Sepi for the lease. to prove the renewal of his lease contract with Bai Tonina Sepi, the fact was
• When Bai Tonina Sepi died, private respondent started remitting his rent to the that he was unable to prove malice or bad faith on the part of petitioner in
court-appointed administrator of her estate. But when the administrator advised him purchasing the property. Therefore, the claim of tortuous interference was
to stop collecting rentals from the tenants of the buildings he constructed, he never established.
discovered that petitioner, representing himself as the new owner of the property, • Petitioner’s purchase of the subject property was merely an advancement of his
had been collecting rentals from the tenants. He thus filed a complaint against the financial or economic interests, absent any proof that he was enthused by improper
latter. motives. In the very early case of Gilchrist v. Cuddy, the Court declared that a
• Petitioner claimed that before he bought the property, he went to Atty. Benjamin person is not a malicious interferer if his conduct is impelled by a proper business
Fajardo, the lawyer who allegedly notarized the lease contract between private interest. In other words, a financial or profit motivation will not necessarily
respondent and Bai Tonina Sepi, to verify if the parties indeed renewed the lease make a person an officious interferer liable for damages as long as there is no
contract after it expired in 1974. Petitioner averred that Atty. Fajardo showed him malice or bad faith involved.
four copies of the lease renewal but these were all unsigned. • This case is one of damnun absque injuria or damage without injury. “Injury” is the
ISSUES & ARGUMENTS legal invasion of a legal right while “damage” is the hurt, loss or harm which results
from the injury.
W/N THE PURCHASE BY PETITIONER OF THE PROPERTY DURING
THE EXISTENCE OF RESPONDENT’S LEASE CONTRACT
CONSTITUTED TORTUOUS INTERFERENCE?
NO, NOT ALL THREE ELEMENTS TO HOLD PETITIONER LIABLE

FOR TORTUOUS INTERFERENCE ARE PRESENT
• Article 1314 of the Civil Code provides that any third person who induces another
to violate his contract shall be liable for damages to the other contracting party. The
tort recognized in that provision is known as interference with contractual relations.
The interference is penalized because it violates the property rights of a party in a
contract to reap the benefits that should result therefrom.
• The Court, in the case of So Ping Bun v. Court of Appeals, down the elements of
tortuous interference with contractual relations: (a) existence of a valid contract;
(b) knowledge on the part of the third person of the existence of the contract
and (c) interference of the third person without legal justification or excuse.
BON ARCILLA
Page 317 of 528

287 People of the Philippines v. Relova | Feliciano from the offense charged subsequently under a national statute, provided that both
G.R. No. L-45129, March 6, 1987 | 148 SCRA 292 offenses spring from the same act.
• Where the offenses charged are penalized either by different sections of the same
FACTS statute or by different statutes, the important inquiry relates to the IDENTITY OF
• Equipped with a search warrant, members of the Batangas City Police together with OFFENSES CHARGED. The constitutional protection against double jeopardy is
personnel of the Batangas Electric Light System search and examined the premises available only where an identity is shown to exist between the earlier and the
of Opulencia Carpena Ice Plant and Cold Storage owned and operated by private subsequent offense charged. In contrast, where one offense is charged under a
respondent Manuel Opulencia. municipal ordinance while the other is penalized by a statute, the critical inquiry is to
• They discovered that electric wiring, devices and contraptions had been installed, the IDENTITY OF THE ACTS. The constitutional protection against double
without the necessary authority from the city government and architecturally jeopardy is available so long as the acts which constitute or have given rise to the 1st
concealed inside the walls of the building. The devices were designed purposely to offense under a municipal ordinance are the same acts which constitute or have
decrease the readings of electric current consumption in the electric meter of the given rise to the offense charged under a statute.
plant. • The question of IDENTITY OF OFFENSES is addressed by examining the
• Opulencia admitted in a written statement that he had caused the installation of the essential elements of each of the 2 offenses charged. The question of IDENTITY
devices in order to decrease the readings of his electric meter. OF THE ACTS must be addressed by examining the location of such acts in time
• Assistant City Fiscal of Batangas filed an information against Opulencia for violation and space.
of Ordinance No. I, Series of 1974, Batangas City. • In the instant case, the relevant acts took place within the same time frame. The
• Trial Court dismissed the information on the ground of prescription. taking of electric current was integral with the unauthorized installation of electric
• 14 days later, Acting City Fiscal of Batangas City filed another information for theft wiring and devices.
under Article 308, RPC. • The dismissal by the lower court of the information for the violation of the
• Trial Court dismissed the case on the ground that the 2nd information will violate the Ordinance upon the ground that such offense had already prescribed amounts to an
right of the accused against double jeopardy. acquittal. An order sustaining a motion to quash based on prescription is a bar to
• Acting City Fiscal filed a Petition for Certiorari and Mandamus. another prosecution for the same act.
ISSUES & ARGUMENTS NO. THE EXTINCTION OF CRIMINAL LIABILITY DOES NOT CARRY
• W/N the filing of the 2nd information constitutes violation of the right against WITH IT THE EXTINCTION OF CIVIL LIABILITY ARISING FROM THE
double jeopardy. OFFENSE CHARGED.
• W/N the extinction of the criminal liability carries with it the extinction of • Because no reservation of the right to file a separate civil action was made, the civil
civil liability arising from the offense charged. action for recovery of civil liability arising from the offense charged was impliedly
instituted with the criminal action.
HOLDING & RATIO DECIDENDI • However, the extinction of criminal liability whether by prescription or by the bar of
double jeopardy does not carry with it the extinction of civil liability arising from the
YES. THE 2ND INFORMATION CONSTITUTES VIOLATION OF THE offense charged.
RIGHT AGAINST DOUBLE JEOPARDY. • Since there is no evidence in the record as to the amount or value of the electric
• The constitution provides that “no person shall be twice put in jeopardy of power appropriated by Opulencia, the civil action should be remanded to the CFI of
punishment for the same offense. If an act is punished by a law and an ordinance, Batangas City for reception of evidence on the amount or value of the electric
conviction or acquittal under either shall constitute a bar to another prosecution for power appropriated and converted by Opulencia.
the same act.”
• The first sentence sets forth the general rule- the constitutional protection against Petition denied. Civil action for related civil liability remanded to the CFI.
double jeopardy is NOT available where the second prosecution is for an offense
that is DIFFERENT from the offense charged in the first prosecution, although
both the 1st and 2nd offenses may be based upon the same act. The second sentence
embodies an exception- the constitutional protection against double jeopardy IS
available although the prior offense charged under the ordinance be DIFFERENT
TIN OCAMPO-TAN
Page 318 of 528

288 Manuel vs. Alfeche, Jr.| Panganiban given that Manuel took an active part in the proceedings by presenting evidence and
G.R. No. 115683, July 26, 1996 | 259 SCRA 475 even filing a Petitioner’s Memorandum. Hence, there can be no longer any
independent civil action to speak of.
FACTS • Petitioner also cites the case of General vs. Claraval15l to prove that there is no need to
• The City Prosecutor of Roxas City filed with the RTC and Information for libel pay filing fees for moral and exemplary damages if the amounts for such claims are
against Celino (writer/author), Fajardo (editor-in-chief), Fernandez (associate not specified in the Information. However, it must be noted that this ruling was
editor), and Tia (assistant editor) of the regional newspaper “Panay News” for intended to apply to a situation wherein either:
allegedly publishing an article entitled “Local Shabu Peddler Now a Millionaire.” a) the judgment awards a claim not specified in the pleading, or
• According to the Information, the said article stated that Delia Manuel was the b) the complainant expressly claims moral, exemplary, temperate, and/or
“Shabu Queen” of Western Visayas, and has been raking in millions since she nomial damages but has not specified ANY amount at all, leaving it
started peddling prohibited drugs, thereby (unjustly) besmirching her reputation, entirely to the trial court’s discretion.
good name, and character as a private person and as a businesswoman. • In the present case, since Manuel claimed an amount of TEN MILLION PESOS as
• Thus, as a direct consequence of the publication, it was also alleged that Manuel damages, the doctrine under General has been rendered inapplicable to her petition.
suffered actual, moral, and exemplary damages in the amount of TEN MILLION
PESOS. Petition DISMISSED.
• The respondent judge finding three of the accused guilty and acquitting the fourth.
However, he dismissed the civil indemnity (by way of moral damages) for lack of
jurisdiction, on the ground that Manuel did not pay the filing fees therefor. Hence
this petition.
ISSUES & ARGUMENTS

• W/N Manuel is entitled to recover damages through an independent civil
action, and despite non-payment of filing fees.
o Petitioner: Under the New RoC, it is only when the amount of damages other
than actual has been specified in the information that the filing fees is required
to be paid upon filing, and that since in this case the amount of damages stated
in the information partakes firstly of actual damages and is not entirely other
than actual, there is no need to pay such fees upon filing.
o Respondents: The present petition is premature because there is a pending
appeal of the conviction for libel before the CA, filed by respondents.
MANUEL NOT ENTITLED TO RECOVER DAMAGES UNDER AN

INDEPENDENT CIVIL ACTION.
• The award of moral and exemplary damages by the trial court is inextricably linked
and necessarily dependent upon the factual finding of basis therefore, i.e. the
existence of the crime of libel. Since such fact is pending determination before the
CA, this court cannot entertain the petition of Manuel, in order to avoid an absurd
situation wherein the CA reverses the decision of the RTC but this court awards
damages in favor of Manuel. Hence, Manuel should have brought the petition CHRISSIE MORAL
before the CA first.
• Petitioner’s contention that Article 33 of the NCC allows an independent civil
15 “The Manchester doctrine requiring payment of filing fees at the time of commencement of the action is
action for damages in cases of defamation, fraud, and physical injuries is misplaced.
applicable to impliedly instituted civil actions under Section 1, Rule 111 only when the amount of damages, other
Here, the civil action had been actually instituted with the criminal prosecution, than actual, is alleged in the complaint or information.”
Page 319 of 528
289 Reyes Trucking vs. People| Pardo HOLDING & RATIO DECIDENDI
G.R. No. 129029 April 3, 2000 |SCRA
1.) No. Reyes Trucking, as employer of the accused who has been adjudged
FACTS guilty in the criminal case for reckless imprudence, can not be held subsidiarily
o Rafael Reyes Trucking Corporation is a domestic corporation engaged in the liable because of the filing of the separate civil action based on quasi delict
business of transporting beer products for the San Miguel Corporation (SMC against it. However, Reyes Trucking, as defendant in the separate civil action for
for short). damages filed against it, based on quasi delict, may be held liable thereon.
o Among its fleets of vehicles for hire is the white truck trailer described above
driven by Romeo Dunca y Tumol, a duly licensed driver. o Rule Against Double Recovery: In negligence cases, the aggrieved party has
o At around 4:00 o’clock in the morning while the truck was descending at a the choice between (1) an action to enforce civil liability arising from crime
slight downgrade along the national road at Tagaran, Cauayan, Isabela, it under Article 100 of the Revised Penal Code [civil liability ex delicto]; and (2) a
approached a damaged portion of the road which was uneven because there separate action for quasi delict under Article 2176 of the Civil Code of the
were potholes about five to six inches deep. The left lane parallel to this Philippines [civil liability quasi delicto]. Once the choice is made, the injured party
damaged portion is smooth. can not avail himself of any other remedy because he may not recover damages
o Before approaching the potholes, Dunca and his truck helper saw the Nissan twice for the same negligent act or omission of the accused (Article 2177 of the
with its headlights on coming from the opposite direction. They used to evade Civil Code).
this damaged road by taking the left lane but at that particular moment, because o In the instant case, the offended parties elected to file a separate civil action
of the incoming vehicle, they had to run over it. for damages against Reyes Trucking as employer of Dunca, based on quasi
o This caused the truck to bounce wildly. Dunca lost control of the wheels and delict, under Article 2176 of the Civil Code of the Philippines.
the truck swerved to the left invading the lane of the Nissan. o Under the law, the vicarious liability of the employer is founded on at least two
o The Nissan was severely damaged, and its two passengers, namely: Feliciano specific provisions of law:
Balcita and Francisco Dy, Jr. died instantly
o Reyes Trucking settled the claim of the heirs of Balcita. The heirs of Dy Art. 2176 in relation to Art. 2180 of the Article 103 of the
opted to pursue the criminal action but did not withdraw the civil case quasi ex Civil Code Revised Penal Code
delicto they filed against Reyes Trucking. They also withdrew their reservation o Preponderance of Evidence o Proof Beyond Reasonable Doubt
to file a separate civil action against Dunca and manifested that they would o Liability of employer is Direct and o Liability of employer is Subsidiary to
prosecute the civil aspect ex delicto in the criminal action. Primary subject to the defense of due the liability of the employee.
o TC consolidated both criminal and civil cases and conducted a joint trial of the diligence in the selection and
same. TC held: supervision of the employee.
o Accused Dunca guilty of the crime of Double Homicide through o Employer and employee are solidarily o Liability attaches when the employee
Reckless Imprudence with violation of the Motor Vehicle Law and liable, thus, it does not require the is found to be insolvent.
liable to indemnify the heirs of Dy for damages. employer to be insolvent.
o Dismissal of the complaint in the separate civil case.
o TC rendered a supplemental decision ordering Reyes Trucking subsidiarily 2. No. The CA and the TC erred in holding Dunca civilly liable, and Reyes
liable for all the damages awarded to the heirs of Francisco Dy, Jr., in the Trucking subsidiarily liable for damages arising from crime (ex delicto) in the
event of insolvency of the Dunca. criminal action as the offended parties in fact filed a separate civil action against
the employer based on quasi delict resulting in the waiver of the civil action ex
ISSUES & ARGUMENTS delicto. IN SHORT, THE TC ERRED IN AWARDING CIVIL DAMAGES IN
1. May Reyes Trucking be held subsidiarily liable for the damages awarded THE CRIMINAL CASE AND IN DISMISSING THE CIVIL ACTION.
to the heirs of Dy in the criminal action against Dunca, despite the filing
of a separate civil action against Reyes Trucking? o Pursuant to the provision of Rule 111, Section 1, paragraph 3 of the 1985 Rules
2. May the Court award damages to the heirs of Dy in the criminal case of Criminal Procedure, the heirs of Dy reserved the right to file the separate
despite the filing of a civil action against Reyes Trucking? civil action, they waived other available civil actions predicated on the same act
or omission of Dunca. Such civil action includes the recovery of indemnity
under the Revised Penal Code, and damages under Articles 32, 33, and 34 of
Page 320 of 528
the Civil Code of the Philippines arising from the same act or omission of the
accused.
o Civil indemnity is not part of the penalty for the crime committed [Ramos vs.
Gonong].
Note: Dunca is guilty of Reckless Imprudence resulting in Homicide and Damage to

Property and not double homicide through reckless imprudence. There is no such nomenclature of an
offense under the Revised Penal Code.
o In intentional crimes, the act itself is punished; in negligence or imprudence, what is
principally penalized is the mental attitude or condition behind the act, the dangerous
recklessness, lack of care or foresight, the imprudencia punible.
NICO CRISOLOGO
Page 321 of 528

290 Bebiano M. Banez vs. Hon. Downey Valdevilla and Oro Marketing
GR 128024, May 9, 2000/ Gonzaga-Reyes
FACTS
• Banez (Petitioner) was the sales operation manager of Oro Marketing
(Respondent). The Respondent indefinitely suspended the Petitoner, thus
prompting him to file illegal dismissal charges against the respondent.
• The case reached the Supreme Court and it was dismissed due to technical
reasons, but the Supreme Court said that there was no GAD of the Labor
Arbiter.
• Respondent filed damages against the Petitioner in the RTC due to the losses it
made during the stint of Banez as the sales operation manager. They alleged
that he constituted another business while being the manager.
o The RTC ruled in favor of Respondent, awarding damages to the
Repondent.
• The Petitioner filed this case stating that the RTC has no jurisdiction for it
should be with the NLRC.
ISSUES & ARGUMENTS
Was the RTC acting in GAD in awarding the damages?
Yes
• It will be recalled that years prior to R.A. 6715, jurisdiction over all money
claims of workers, including claims for damages, was originally lodged with the
Labor Arbiters and the NLRC by Article 217 of the Labor Code. 7 On May 1,
1979, however, Presidential Decree ("P.D.") No. 1367 amended said Article 217
to the effect that "Regional Directors shall not indorse and Labor Arbiters shall
not entertain claims for moral or other forms of damages." 8 This limitation in
jurisdiction, however, lasted only briefly since on May 1, 1980, P.D. No. 1691
nullified P.D. No. 1367 and restored Article 217 of the Labor Code almost to
its original form. Presently, and as amended by R.A. 6715, the jurisdiction of
Labor Arbiters and the NLRC in Article 217 is comprehensive enough to
include claims for all forms of damages "arising from the employer-employee
relations"
• There is no mistaking the fact that in the case before us, private respondent's
claim against petitioner for actual damages arose from a prior employer-
employee relationship. In the first place, private respondent would not have
taken issue with petitioner's "doing business of his own" had the latter not been
concurrently its employee.
JOFI CUENCA
Page 322 of 528

291 DMPI Employees vs. VELEZ Metal-NAFLU| PARDO, J. • Rule 111, Section 1 of the Revised Rules of Criminal Procedure, which became
G.R. No. 129282, November 29, 2001 effective on December 1, 2000, provides that:
"(a) When a criminal action is instituted, the civil action for the recovery of civil liability
FACTS arising from the offense charged shall be deemed instituted with the criminal action unless the
offended party waives the civil action, reserves the right to institute it separately
An information for estafa was filed against Carmen Mandawe for alleged failure to or institutes the civil action prior to the criminal action."
account to respondent Eriberta Villegas the amount of P608,532.46. • Rule 111, Section 2 further provides that —
Respondent Villegas entrusted this amount to Carmen Mandawe, an employee of "After the criminal action has been commenced, the separate civil action arising
petitioner DMPI-ECCI, for deposit with the teller of petitioner. therefrom cannot be instituted until final judgment has been entered in the criminal action."
Subsequently, on March 29, 1994, respondent Eriberta Villegas filed with the Regional • However, with respect to civil actions for recovery of civil liability under Articles 32,
Trial Court, a complaint against Carmen Mandawe and petitioner DMPI-ECCI for a sum 33, 34 and 2176 of the Civil Code arising from the same act or omission, the rule
of money and damages with preliminary attachment arising out of the same transaction. has been changed. Under the present rule, only the civil liability arising from the
offense charged is deemed instituted with the criminal action unless the offended
In time, petitioner sought the dismissal of the civil case on the ground that there is a party waives the civil action, reserves his right to institute it separately, or institutes
pending criminal case in RTC Branch 37, arising from the same facts, the civil action prior to the criminal action.17
• There is no more need for a reservation of the right to file the independent civil
Trial court issued an order dismissing the case. However upon respondent’s motion for actions under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines. "The
reconsideration, the order of dismissal was recalled On Feb. 21 1997. reservation and waiver referred to refers only to the civil action for the recovery of
the civil liability arising from the offense charged. This does not include recovery of
civil liability under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines
ISSUE arising from the same act or omission which may be prosecuted separately even
Whether or not the civil case could proceed independently of the criminal case for without a reservation.
estafa without the necessary reservation exercised by the party
• The changes in the Revised Rules on Criminal Procedure pertaining to independent
HOLDING & RATIO DECIDENDI civil actions which became effective on December 1, 2000 are applicable to this
case.
YES
• Procedural laws may be given retroactive effect to actions pending and
• As a general rule, an offense causes two (2) classes of injuries. The first is the social undetermined at the time of their passage. There are no vested rights in the rules of
injury produced by the criminal act which is sought to be repaired thru the procedure. Thus, Civil Case No. CV-94-214, an independent civil action for
imposition of the corresponding penalty, and the second is the personal injury damages on account of the fraud committed against respondent Villegas under
caused to the victim of the crime which injury is sought to be compensated through Article 33 of the Civil Code, may proceed independently even if there was no
indemnity which is civil in nature. reservation as to its filing.
• Thus, "every person criminally liable for a felony is also civilly liable." This is the law
governing the recovery of civil liability arising from the commission of an offense.
• Civil liability includes restitution, reparation for damage caused, and indemnification
of consequential damages
• The offended party may prove the civil liability of an accused arising from the
commission of the offense in the criminal case since the civil action is either deemed
instituted with the criminal action or is separately instituted.
TIN DINO
Page 323 of 528

292 Replum (Neplum, Inc.) vs. Obreso | Pangniban, J. capture or memorize all the material details of the judgment during the
G.R. No. 141986, July 11, 2002 | 384 SCRA 466 promulgation thereof.” It likewise poses the question: “why require all
proceedings in court to be recorded in writing if the parties thereto would
FACTS not be allowed the benefit of utilizing these written [documents]?”
• This case originated from Criminal Case No. 96-246 wherein on Oct. 29, 1999, the
accused was acquitted of the crime of estafa because the prosecution failed to prove HOLDING & RATIO DECIDENDI
guilt beyond reasonable doubt. It must be noted that the accused and her counsel as THE PETITION IS UNMERITORIOUS.
well as the public and private prosecutors were present during the promulgation of No Need to Reserve Independent Civil Action
judgment. • At the outset, we must explain that the 2000 Rules on Criminal Procedure deleted
• The private prosecutor represented the interests of the petitioner who was the the requirement of reserving independent civil actions and allowed these to proceed
private offended party in Criminal Case No. 96-246.’ separately from criminal ones. Thus, the civil actions referred to in Articles 32, 33,
• On 12 November 1999, the petitioner, through the private prosecutor, received its 34 and 2176 of the Civil Code shall remain “separate, distinct and independent” of
copy of the Judgment. any criminal prosecution based on the same act. Here are some direct consequences
• On 29 November 1999, petitioner filed its 25 November 1999 Motion for of such revision and omission:
Reconsideration (Civil Aspect) of the Judgment. • 1. The right to bring the foregoing actions based on the Civil Code need not be
• Considering that 27 November 1999 was a Saturday, petitioner filed its Motion for reserved in the criminal prosecution, since they are not deemed included therein.
Reconsideration on 29 November 1999, a Monday.’ • 2. The institution or waiver of the right to file a separate civil action arising from
• On 28 January 2000, a Friday, petitioner received its copy of the 24 January 2000 the crime charged does not extinguish the right to bring such action.
Order of the Trial Court denying for lack of merit petitioner’s Motion for • 3. The only limitation is that the offended party cannot recover more than once for
Reconsideration. the same act or omission.
• On 31 January 2000, a Monday, petitioner filed its 28 January 2000 Notice of • Thus, deemed instituted in every criminal prosecution is the civil liability arising
Appeal from the Judgment. On the same day, petitioner filed by registered mail its from the crime or delict per se (civil liability ex delicto), but not those liabilities from
28 January 2000 Amended Notice of Appeal. quasi-delicts, contracts or quasi-contracts. In fact, even if a civil action is filed
• On 17 February 2000, the Trial Court issued its Challenged Order, which petitioner separately, the ex delicto civil liability in the criminal prosecution remains, and the
received through the private prosecutor on 22 February 2000, denying due course to offended party may – subject to the control of the prosecutor – still intervene in the
petitioner’s Notice of Appeal and Amended Notice of Appeal criminal action in order to protect such remaining civil interest therein. By the same
• The RTC refused to give due course to petitioner’s Notice of Appeal and Amended token, the offended party may appeal a judgment in a criminal case acquitting the
Notice of Appeal. It accepted respondent’s arguments that the Judgment from accused on reasonable doubt, but only in regard to the civil liability ex delicto.
which the appeal was being taken had become final, because the Notice of Appeal o And this is precisely what herein petitioner wanted to do: to appeal the
and the Amended Notice of Appeal were filed beyond the reglementary period. The civil liability arising from the crime – the civil liability ex delicto.
15-day period was counted by the trial court from the promulgation of the Decision Period for Perfecting an Appeal
sought to be reviewed. • Section 6 of Rule 122 of the 2000 Rules on Criminal Procedure declares:
• Hence, this Petition. o Section 6. When appeal to be taken. — An appeal must be taken within
ISSUES & ARGUMENTS fifteen (15) days from promulgation of the judgment or from notice of the
• Whether the period within which a private offended party may appeal from, final order appealed from. This period for perfecting an appeal shall be
or move for a reconsideration of, or otherwise challenge, the civil aspect of a suspended from the time a motion for new trial or reconsideration is filed
judgment in a criminal action should be reckoned from the date of until notice of the order overruling the motion shall have been served
promulgation or from the date of such party’s actual receipt of a copy of such upon the accused or his counsel at which time the balance of the period
judgment. begins to run. (6a)
o It is petitioner’s assertion that “the parties would always need a written • This provision is similar, though not identical, to Section 6 of Rule 122 of the 1985
reference or a copy of the judgment x x x to intelligently examine and Rules invoked by petitioner. The difference is that the former makes clear that
consider the judgment from which an appeal will be taken.” Thus, it promulgation refers to “judgment,” and notice refers to “final order appealed from.”
concludes that the 15-day period for filing a notice of appeal must be Appeal of the Accused Different from That of the Offended Party
counted from the time the losing party actually receives a copy of the • The period to appeal, embodied in Section 6 of Rule 122 of the Rules on Criminal
decision or order. Petitioner ratiocinates that it “could not be expected to Procedure, cannot be applied equally to both accused-appellant and private
Page 324 of 528
offended party. Further bolstering this argument is the second sentence of this received by its counsel only on November 12, 1999; and (2) the Motion for
provision which mandates as follows: Reconsideration filed on November 29, 2000 interrupted the running of the
o “x x x. This period for perfecting an appeal shall be suspended from the reglementary period.
time a motion for new trial or reconsideration is filed until notice of the • However, a peculiar circumstance in this case militates against this
order overruling the motions has been served upon the accused or his counsel at conclusion. Here, the private prosecutor himself was present during the
which time the balance of the period begins to run.” promulgation of the Judgment. This fact is undeniable, as petitioner itself admits
• The above-quoted portion provides for the procedure for suspending and resuming his presence in its Memorandum as follows:
the reglementary period of appeal specifically mentioned in the preceding sentence. o “2.01 On 29 October 1999, the Trial Court promulgated its judgment (the
However, it is clear that the procedure operates only in relation to the accused. This ‘Judgment’) in Criminal Case No. 96-246 acquitting the accused of the
conclusion can be deduced from the fact that after being interrupted, the period to crime of estafa on the ground that the prosecution failed to prove the guilt of the
appeal begins to run again only after the accused or the counsel of the accused is given accused beyond reasonable doubt. The accused and her counsel as well as the public and
notice of the order overruling the motion for reconsideration or for new trial. private prosecutors were present during such promulgation.” (Italics supplied)
Verily, the assumption behind this provision is that the appeal was taken by the o Further, private prosecutor even signed a copy of the Judgment dated
accused, not by the private offended party. October 29, 1999, a signature which in unequivocal terms signifies
• Indeed, the rules governing the period of appeal in a purely civil action notification of the party he represents – herein petitioner.
should be the same as those covering the civil aspects of criminal • Having been present during the promulgation and having been furnished a copy of
judgments. If these rules are not completely identical, the former may be the judgment at the time, private offended party was in effect actually notified
suppletory to the latter. As correctly pointed out by petitioner, “[t]he appeal of the Judgment, and from that time already had knowledge of the need to
from the civil aspect of a judgment in a criminal action is, for all intents and appeal it. Thus, the very raison d’être of this Decision is already satisfied: the
purposes, an appeal from a judgment in a civil action as such appeal cannot filing of an appeal by the said party, only after being notified of the
affect the criminal aspect thereof.” Being akin to a civil action, the present Judgment. As argued by respondent, “did not the public and private prosecutors
appeal may be guided by the Rules on Civil Procedure. acquire notice of Judgment at its promulgation because of their presence? Notice of
• However, the offended party or complainant may appeal the civil aspect the judgment may not be defined in any other way x x x.”
despite the acquittal of the accused. As such, the present appeal undertaken
by the private offended party relating to the civil aspect of the criminal
judgment can no longer be considered a criminal action per se, wherein the
State prosecutes a person for an act or omission punishable by law. Instead,
it becomes a suit analogous to a civil action.
• Being in the nature of a civil case, the present intended appeal involves
proceedings brought to the Court of Appeals from a decision of the RTC in
the exercise of the latter’s original jurisdiction. Thus, it should be properly
done by filing a notice of appeal. An appeal by virtue of such notice shall be
filed within 15 days from notice of the judgment or final order appealed from.
For the private offended party, this rule then forecloses the counting of the
period to appeal from the “promulgation” of the judgment to the accused.
• In sum, we hold that an offended party’s appeal of the civil liability ex delicto
of a judgment of acquittal should be filed within 15 days from notice of the
judgment or the final order appealed from. To implement this holding, trial
courts are hereby directed to cause, in criminal cases, the service of their
judgments upon the private offended parties or their duly appointed counsels –
the private prosecutors. This step will enable them to appeal the civil aspects
under the appropriate circumstances.
General Rule Not Applicable to the Present Case
• If we were to follow the reasoning of petitioner, the Notice of Appeal filed on
January 31, 2000 was on time, considering that (1) the Judgment had been JAY DUHAYLONGSOD
Page 325 of 528

293 Hambon vs. CA| Austria-Martinez
G.R. No. 122150, March 17, 2003 | 399 SCRA 255
FACTS
• Petitioner George Hambon filed before the RTC of Baguio a complaint for damages
for the injuries and expenses he sustained after the truck driven by the respondent
Valentino Carantes bumped him.
• In answer thereto, respondent contended that the criminal case arising from the
same incident, Criminal Case No. 2049 for Serious Physical Injuries thru Reckless
Imprudence, earlier filed, had already been provisionally dismissed by the MTC of
Tuba, Benguet due to petitioner’s lack of interest and that the dismissal was with
respect to both criminal and civil liabilities of respondent.
• The RTC ruled that the civil case was not barred by the dismissal of the criminal
case and that petitioner is entitled to damages. CA reversed.
ISSUES & ARGUMENTS

• W/N a civil case for damages based on an independent civil action be duly
dismissed for failure to make a reservation to file a separated civil action in a
criminal case filed arising from the same act or omission of the accused?
YES. THE RIGHT TO BRING AN ACTION FOR DAMAGES UNDER THE

CIVIL CODE MUST BE RESERVED.
• Section 1, Rule 111 of the 1985 Rules on Criminal Procedure, as amended in 1988,
is the prevailing and governing law in this case.
• Section 1, Rule 111 clearly requires that a reservation must be made to institute
separately all civil actions for the recovery of civil liability, otherwise they will be
deemed to have been instituted with the criminal case.
• The requirement that before a separate civil action may be brought it must be
reserved does not impair, diminish or defeat substantive rights, but only regulates
their exercise in the general interest of procedure. The requirement is merely
procedural in nature.
• Herein petitioner Hambon should have reserved his right to separately institute the
civil action for damages in Criminal Case No. 2049. Having failed to do so, Civil
Case No. 1761-R for damages subsequently filed by him without prior reservation
should be dismissed.
FRANCIS ESPIRITU
Page 326 of 528

294 Cojuangco, Jr. v. Court of Appeals | Davide, Jr. simplify the work of the trial court; in short, the attainment of justice with the least
G.R. No. 37404 November 18, 1991| 203 SCRA 619 expense and vexation to the parties litigants.
• If the court referred to is a multi-sala court (as in this case, the QC RTC), it may
FACTS happen that the criminal and civil actions are raffled or assigned to different salas. In
• In 1972, Graphic, a weekly magazine of general circulation in the Philippines this situation, consolidation of one with another earlier filed would not only be
published a blind item under the column entitled Social Climbing by one “Conde de practical and economical – it would subserve the very purpose of the law.
Makati,” later identified as George Sison. Consolidation of cases assigned to different branches of a court has already been
• The blind item talked about a certain “Blue Lady” which was frequenting the office recognized.
of an Honorable Sir. It further said that the said “Blue Lady” was “following up” on • It is self-evident that the CIVIL and CRIMINAL cases in question involve common
her loan and even said expletives such as “ang mahal naman ng kanyang [pussycat or identical questions of fact and law, and that they would even have the same
doll]!” witnesses. These considerations alone justify the exercise by the court of its
• Claiming that the item alludes to petitioners-spouses, and that it is false, malicious, discretion to consolidate the cases for joint hearing to attain the salutary purpose of
and constitutes a vicious attack on petitioner-wife’s virtue as it imputes to her not consolidation.
only the corrupt and immoral act of “following up” on an alleged loan, but also the • Moreover, what is involved in this case is the crime of libel. As correctly stated by
commission of corrupt and immoral acts of adultery and/or prostitution, petitioners the petitioners, Art.360 of the RPC states that that the criminal case for libel and the
filed a CIVIL case for damages based on Libel against Graphic Publishing Co., and civil action for damages arising therefrom must be filed in the same court.
its owner Araneta,, GM and editor Mauricio, and writer Sison.
• Later on, the City Fiscal of QC filed a CRIMINAL case for libel against the same
defendants in the civil case.
• Thereafter, petitioners filed separate motions to consolidate the criminal case with
the civil case, alleging that the evidence to be presented in both cases would be the
same and that much valuable time and effort of the court and of the parties would
be saved by such consolidation, and Art.360 of the RPC states that in libel, the civil
action shall be filed in the same court where the criminal action is filed and vice-
versa, provided, however, that the court where the criminal action or civil action for
damages is first filed, shall acquire jurisdiction to the exclusion of other courts.
Defendants opposed such motions.
• RTC issued an order allowing the consolidation. CA set aside such order.
ISSUES & ARGUMENTS

• W/N the criminal case and the separate and independent civil action to
enforce the civil liability arising from the former, filed pursuant to Art.33 of
the Civil Code, may be consolidated for joint trial.
IT MAY BE CONSOLIDATED.
• A court may order several actions pending before it to be tried together where they
arise from the same act, event, or transaction, involve the same or like issues, and
depend largely or substantially on the same evidence, provided that the court has
jurisdiction over the case to be consolidated and that a joint trial will not give one
party an undue advantage or prejudice the substantial rights of any of the parties.
• Consolidation of actions is expressly authorized under Sec.1, Rule31 of the Rules of
Court. The obvious purpose of the above rule is to avoid multiplicity of suits, to
guard against oppression and abuse, to prevent delays, to clear congested dockets, to
JOHN FADRIGO
Page 327 of 528

295 Sarmiento Jr VS CA| Austria-Martinez o When the decision of acquittal expressly declared that the remedy of the
G.R. No. 122502, December 27, 2002 Bank is civil not criminal in nature. This amounts to a reservation of the
civil action.
FACTS o Failure of the court to make any pronouncement in its decision concerning
• Sept 6, 1978, Gregorio Limpin and Antonio Apostol, doing business under the the civil liability of the driver and/or his employer must therefore be due
name Davao Libra Industrial Sales, filed an application with Associated Bank for an to the fact that the criminal action did not involve at all any claim for civil
Irrevocable Letter of Credit in favor of LS Parts Hardware and Machine Shop fpr indemnity.
P495,000. o Failure of the trial court to make any pronouncement, favorable or
• The application was approved and a Trust Receipt was executed by Limpin and unfavorable, as to the civil liability of the accused amounts to a reservation
Antonio. It was also signed by Lorenzo Sarmiento Jr wherein they undertook to of the right to have the civil liability litigated and determined in a separate
jointly and severally agree to pay Associated Bank all sums and amount of money action, for nowhere in the Rules of Court is it provided that if the court
Associated Bank may call upon them to pay under the said Trust Receipts. fails to determine the civil liability, it becomes no longer enforceable.
• The defendants failed to pay despite several demands by the bank. They argued that • Nothing in the records shows that Associated Bank ever attempted to enforce its
they cannot be held liable because the items were lost when the vessel transporting right to recover civil liability during the prosecution of the criminal action against
them sank. petitioners.
• Associated Bank filed a criminal complaint against defendants for violation of the • The bank’s right to file a separate complaint for a sum of money is governed by Art
trust receipts law. The amended complaint dropped Sarmiento Jr fron the 30 of CC:
Information while Limpin was convicted. o When the civil action is based on an obligation not arising from the act or
• The Bank filed a civil case against defendants, the lower Court and CA ruled in omission complained of as a felony, such civil action may proceed
favor of the Bank. independently of the criminal proceedings and regardless of the result of
the latter.
ISSUES & ARGUMENTS • The bank’s complaint was based on the failure of the petitioners to comply with
• W/N the civil case will prosper? their obligation under the Trust Receipt. This breach of obligation is separate and
distinct from any criminal liability for the misuse/misappropriation of goods or
HOLDING & RATIO DECIDENDI proceeds realized from the sale of goods under the trust receipts.
• Being based on an obligation ex contractu and not ex delicto, the civil action may
YES. proceed independently of the criminal proceedings instituted against petitioner
• The decision of the court in the criminal action did not contain an award of civil regardless of the result of the latter.
liability.
• With respect to Sarmiento Jr, he was dropped from the criminal case and so the
decision cannot bar the filing of the present civil action.
• With respect to Limpin, petitioners claim that Associated Bank’s right to institute
separately the civil action is already barred on the ground that the same was not
expressly reserved in the criminal action earlier filed.
• Under the revised Rules of Criminal Procedure, when the criminal action is
instituted, the civil action shall be deemed instituted with the criminal action unless
the offended party waives the civil action, reserves the right to institute it separately
or institutes the civil action prior to the criminal action.
• The reservation shall be made before the prosecution starts presenting its evidence.
• Such reservation may not necessarily be express but may be implied which may be
inferred not only from the acts of the offended party but also from acts other than
those of the latter.
• Examples of implied reservation:
PAT FERNANDEZ
Page 328 of 528

296 CARANDANG, petitioner V. SANTIAGO, respondent • The Article in question uses the words "defamation", "fraud" and "physical injuries."
G.R. No. L-8238, May 25, 1955 97 PHIL 94 Defamation and fraud are used in their ordinary sense because there are no specific
provisions in the Revised Penal Code using these terms as means of offenses
FACTS: defined therein, so that these two terms defamation and fraud must have been used
not to impart to them any technical meaning in the laws of the Philippines, but in
• This is a petition for certiorari against Honorable Vicente Santiago to annul his their generic sense. With this apparent circumstance in mind, it is evident that the
order in Civil Case No. 21173 suspending the trial of said civil case to await the term "physical injuries" could not have been used in its specific sense as a crime
result of the criminal Case No. 534 Tomas Valenton, Jr. who was found guilty of the defined in the Revised Penal Code, for it is difficult to believe that the Code
crime of frustrated homicide committed against the person of Cesar Carandang, Commission would have used terms in the same article, some in their general and
petitioner herein. Tomas Valenton, Jr. appealed the decision to the Court of Appeals another in its technical sense. In other words, the term "physical injuries" should be
where the case is now pending. understood to mean bodily injury, not the crime of physical injuries, because the
• Petitioner herein filed a complaint in the Court of First Instance of Manila to terms used with the latter are general terms.
recover from the defendant Tomas Valenton, Jr. and his parents, damages, both • For the foregoing considerations, we find that the respondent judge committed an
actual and moral, for the bodily injuries received by him on occasion of the error in suspending the trial of the civil case, and his order to that affect is hereby
commission of the crime of frustrated homicide by said accused Tomas Valenton Jr. revoked, and he is hereby ordered to proceed with the trial of said civil case without
The judge ruled that the trial of the civil action must await the result of the criminal awaiting the result of the pending criminal case, with costs against the defendant.
case on appeal. A motion for reconsideration was submitted, but the court denied
the same; hence this petition for certiorari.
ISSUE:
Whether or not Judge Santiago erred in suspending the civil case?
Yes, Article 33 of the new Civil Code provides:
• In cases of defamation, fraud and physical injuries, a civil action for damages,
entirely separate and distinct from the criminal action, may be brought by the
injured party. Such civil action shall proceed independently of the criminal
prosecution, and shall require only a preponderance of evidence.
• The Code Commission itself states that the civil action allowed under Article 33 is
similar to the action in tort for libel or slander and assault and battery under
American law. But respondent argue that the term "physical injuries" is used to
designate a specific crime defined in the Revised Penal Code, and therefore said
term should be understood in its peculiar and technical sense, in accordance with
the rules statutory construction
• In the case at bar, the accused was charged with and convicted of the crime of
frustrated homicide, and while it was found in the criminal case that a wound was
inflicted by the defendant on the body of the petitioner herein Cesar Carandang,
which wound is bodily injury, the crime committed is not physical injuries but
frustrated homicide, for the reason that the infliction of the wound is attended by
the intent to kill. So the question arises whether the term "physical injuries" used in
Article 33 means physical injuries in the Revised Penal Code only, or any physical
injury or bodily injury, whether inflicted with intent to kill or not.
J.C. LERIT
Page 329 of 528

297 Lontoc vs. MD Transit & Taxi Co. | Gutierrez The fact that the Lontoc intervened in the criminal case did not bar him from filing
G.R. No. L-48949 April 15, 1988| 160 SCRA 367 a separate civil action for damages especially considering that the accused in the
criminal case, dela Cruz, was acquitted "because his guilt was not proven beyond reasonable
FACTS doubt" (Emphasis supplied).
• On October 31, 1970 at about 8:30 in the morning a vehicular accident happened The two cases were anchored on two different causes of action. The criminal case
along Taft Avenue, Manila, involving a Holden car (driven by Rodolfo Defeo and was based solely on dela Cruz's violation of Article 365 of the Penal Code. Any
owned by Jose Lontoc and an MD Bus driven by Ignacio dela Cruz. doubt as to the nature of the action is erased by the trial court's statements in the
• As a result of this accident, dela Cruz, the driver of the MD Bus was charged with criminal case that the Court finds that the guilt of the accused has not been proven
the crime of damage to property with physical injuries thru reckless imprudence beyond reasonable doubt; that the owner of the bus is not included in this case being a criminal
before the Court of First Instance of Manila. case" (emphasis supplied). On the other hand, the complaint for damages was based
• After trial on the merits, the court rendered judgment "finding the accused not on quasi-delict and both the driver and bus owner are defendants.
guilty, because his guilt has not been proven beyond reasonable doubt and is
hereby acquitted." IN VIEW OF THE FACT THAT DELA CRUZ WAS ACQUITTED ON THE
• Jose Lontoc, the owner of the Holden car then filed a complaint for recovery of GROUND THAT "HIS GUILT WAS NOT PROVEN BEYOND
damages against MD Transit and Taxi Co., Inc., and dela Cruz before the Court of REASONABLE DOUBT, LONTOC HAS THE RIGHT TO INSTITUTE A
First Instance. SEPARATE CIVIL ACTION TO RECOVER DAMAGES FROM THE MD
• Instead of filing an answer, MD Transit and dela Cruz filed a motion to dismiss on TRANSIT AND DELA CRUZ.
the ground "that the complaint fails to state a sufficient cause of action and
that the cause of action as alleged in the complaint is barred by a prior final The well-settled doctrine is that a person, while not criminally liable, may still be
judgment rendered in the prior criminal case and which in the same case Lontoc civilly liable. "The judgment of acquittal extinguishes the civil liability of the accused
ventilated his claim for damages against the MD Transit and Ignacio. only when it includes a declaration that the facts from which the civil liability might
• The trial court then issued an order dismissing the civil case because there was no arise did not exist". This is based on Article 29 of the Civil Code which provides:
reservation made by the complainant to file a separate civil action and the When the accused in a criminal prosecution is acquitted on the ground that his guilt
complainant through counsel intervened in the prosecution of the criminal case has not been proven beyond reasonable doubt, a civil action for damages for the same act
which led to the acquittal of the accused. or omission may be instituted. Such action requires only a preponderance of
• The Lontoc appealed the order to the Court of Appeals. As stated earlier, the evidence. ...
appellate court certified the case to this Court on the ground that the issues raised
are purely questions of law. It is plain from the judgment in the criminal case that the aspect of civil liability was
not passed upon and resolved.
ISSUES & ARGUMENTS WHEREFORE, the questioned order of the Court of First Instance of Quezon City is
Whether or not the Lontoc’s non-reservation to file a separate action for damages REVERSED and SET ASIDE. The case is REMANDED to the court of origin or its
is fatal to this action for damages successor for further proceedings. No costs.
Whether or not the judgment of acquittal of dela Cruz in the criminal case
wherein through a private prosecutor, Lontoc presented evidence to prove
damages is a bar to the institution of a separate civil action for damages against
both the operator of MD transit and Taxi Co., Inc., and its driver, dela Cruz.
UNDER THE FACTS OF THIS CASE, THE FAILURE OF THE

PLAINTIFF-APPELLANT TO RESERVE HIS RIGHT TO FILE A
SEPARATE CIVIL CASE IS NOT FATAL
JON LINA
Page 330 of 528

298 Natividad v. Andamo Emmanuel R. Andamo vs IAC| Fernan corporation supposedly constituting fault or negligence, and the causal
G.R. No. 74761 November 6, 1990| connection between the act and the damage, with no pre-existing contractual
obligation between the parties make a clear case of a quasi delict or culpa aquiliana.
FACTS • Article 2176, whenever it refers to "fault or negligence", covers not only acts
• Spouses Andamo are the owners of a parcel of land which is adjacent to that of "not punishable by law" but also acts criminal in character, whether intentional
private respondent, Missionaries of Our Lady of La Salette, Inc., a religious and voluntary or negligent. Consequently, a separate civil action lies against the
corporation. offender in a criminal act, whether or not he is criminally prosecuted and found
• Within the land of respondent corporation, waterpaths and contrivances, guilty or acquitted, provided that the offended party is not allowed, (if the
including an artificial lake, were constructed, which allegedly inundated and tortfeasor is actually charged also criminally), to recover damages on both
eroded petitioners' land, caused a young man to drown, damaged petitioners' scores, and would be entitled in such eventuality only to the bigger award of the
crops and plants, washed away costly fences, endangered the lives of petitioners two, assuming the awards made in the two cases vary.
and their laborers during rainy and stormy seasons, and exposed plants and
respondent.
ISSUES & ARGUMENTS

Yes
plaintiff, (b) fault or negligence of the defendant, or some other person for
whose acts he must respond; and (c) the connection of cause and effect
between the fault or negligence of the defendant and the damages incurred by
the plaintiff. 11
respondent corporation. Indeed, the recitals of the complaint, the alleged
presence of damage to the petitioners, the act or omission of respondent KATH MATIBAG
Page 331 of 528

299 Cancio Jr. vs Isip
FACTS
• Cancio filed three cases of violation of BP 22 and three cases of Estafa against
Isip for issuing the following checks without funds.
• The first case was dismissed by the Provincial Prosecutor on the ground that
the check was deposited with the drawee bank after 90 days from the date of
the check. The other two cases were dismissed by the MTC of Pampanga for
• For the three pending estafa cases, the prosecution moved to dismiss the estafa
cases after failing to present its second witness.
• The prosecution reserved its right to file a separate civil action arising from the
said criminal cases. The MTC granted the motions.
• Cancio filed a case for collection of sum of money, seeking to recover the
amount of the checks.
• Isip filed a motion to dismiss on the ground that the action is barred by the
doctrine of Res Judicata. Isip also prayed to have Cancio in contempt for
forum shopping.
• The trial court ruled in favor of Isip by stating that the action is barred by Res
Judicata and the filing of said civil case amounted to forum shopping.
ISSUES & ARGUMENTS
• Whether the dismissal of the estafa cases against the respondents bars
the institution of a civil action for collection of the value of the checks
subject of the estafa cases.
No.
The trial court erred in dismissing Cancio’s complaint for collection of the
value of the checks issued by respondent. Being an independent civil action
which is separate and distinct from any criminal prosecution and which require
no prior reservation for its institution, the doctrine of Res Judicata and forum
shopping will not operate to bar the same.
SATURDAY ALCISO
Page 332 of 528

300 Roy Padilla, Filomeno Galdones, Ismael Gonzalgo and Jose Farley Benedia,  Extinction of the penal action does not carry with it
vs. CA| GUTIERREZ, JR., J. extinction of the civil, unless the extinction proceeds from a
G.R. No. L-39999 May 31, 1984| 129 SCRA 558 declaration in a final judgment that the fact from which the
civil might arise did not exist. In other cases, the person
FACTS entitled to the civil action may institute it in the Jurisdiction and
• Petitioner Padilla was the Mayor of Panganiban, CamNorte, while the other in the manner provided by law against the person who may be
petitioners were policemen, who did a clearing operation of the public market by liable for restitution of the thing and reparation or indemnity for
virtue of the order of the Mayor. the damage suffered.
• In this operation, PR Antonio Vergara and his family’s stall (Pub Market Bldg 3) was o Art 29, NCC:
forcibly opened, cleared of its content and demolished by ax, crowbar and hammers.  When the accused in a criminal prosecution is acquitted on the
o Petitioner’s defense: Vergara was given (prior notice) 72 hrs to vacate. ground that his guilt has not been proved beyond reasonable
o Vergara’s: Petitioners took they advantage of their positions; must be doubt, a civil action for damages for the same act or
charged the with grave coercion; there was evident premeditation. omission may be instituted. Such action requires only a
• RTC: Petitioners are guilty of grave coercion, to be punished 5mos &1day preponderance of evidence. Upon motion of the defendant, the
imprisonment, and solidarily fined 30K for moral damages, 10K actual and 10K court may require the plaintiff to file a bond to answer for
exemplary. damages in case the complaint should be found to be malicious.
• CA: acquitted, but solidarily liable for actual damages of P9,600.  If in a criminal case the judgment of acquittal is based upon
• MR denied. Petitioners now appeal claiming that they are not liable for damages by reasonable doubt, the court shall so declare. In the absence
virtue of the acquittal. of any declaration to that effect, it may be inferred from the
text of the decision whether or not the acquittal is due to that
ISSUES & ARGUMENTS ground.
____________________________________________________________________ • Facts support existence of damage; the extinction of Petitioner’s criminal liability
W/N Petitioners are liable still for civil damages despite acquittal of the CA? (acquittal) did not carry with it the extinction of their civil liability.
Defense of Petitioner: the civil liability which is included in the criminal action is that • Application of Art 29: action need not be filed in a separate civil action all the time,
arising from and as a consequence of the criminal act, and the defendant was acquitted in (as in this case) where fact of injury, its commission and result were already
the criminal case, (no civil liability arising from the criminal case), no civil liability arising established in the criminal proceeding. Since by preponderance of evidence, civil
from the criminal charge could be imposed upon him. liability was proven to exist, indemnity is due in favor of Vergara. A separate action
will simply delay relief due to Vergara.
Petition DENIED. CA AFFIRMED.
PETITIONERS ARE LIABLE TO PAY DAMAGES.
• First, they were acquitted due to REASONABLE DOUBT. Grave coercion is
committed if force upon the person is applied, and not force upon things as in this
case. The CA held that they should’ve been charged with threats or malicious
mischief. Since, these offenses were not alleged in the complaint, Petitioners cannot
be prosecuted for it.
• HOWEVER, the clearing and demolition was not denied. As a result, Vergara
indeed suffered damages pertaining to: cost of stall construction (1300), value
furniture and equipment(300), value of goods seized(8K), amounting to P9600.
Under the law, petitioners are liable.
o RPC 100: every person criminally liable is civilly liable
o 2176: damages due under quasi-delict, limited though by 2177: from
recovering twice from the same act.
o ROC Rule 111, Sec 2 last paragraph:
DIANE LIPANA
Page 333 of 528
301 Maximo v.Gerochi | Gutierrez unnecessary duplication of litigation with all its attendant less of time, effort, and
G.R. Nos. L-47994-97 September 24, 1986| 144 SCRA 326 money on the part of all concerned.
FACTS
• Panghilason was in the business of buying and selling rice. Her supplier was
Maximo. She purchased rice from Maximo on a regular basis.
• According to Panghilason, they had an agreement on a 15-day credit term. But
Maximo still deposited the checks. The checks were dishonored because the account
of Panghilason was already closed
• The City Fiscal of Bacolod filed four (4) informations against Panghilason for estafa.
All informations allege that she drew checks against PCIB for about 35K in favor of
Maximo, with full knowledge that her account has insufficient funds, or has been
closed.
• The Court, however, found that the prosecution failed to establish guilt beyond
reasonable doubt. Therefore, Panghilason was consequently acquitted.
• The court also absolved Panghilason of civil liability.
• Maximo now filed this petition to recover from Panghilason the amount due to her
representing the civil liability.
ISSUES & ARGUMENTS

• W/N the Panghilason is liable for damages. Does she incur civil liability?
o Petitioner: Maximo alleges that when Panghilason was acquitted of estafa,
it does not necessarily mean that no civil liability arising from the acts
complained of may be awarded in the same judgment.
o Respondent (Judge): Gerochi justified his refusal to award civil liability
saying that the civil liability did not arise from any criminal act but only
from a civil contract connected to the crime, the action for civil liability
must be filed in a "civil court."
PANHILASON MUST PAY ACTUAL DAMAGES AMOUNTING TO ABOUT

35K PLUS 12% INTEREST.
• Panghilason did not deny that she had an obligation to Maximo. Since this
obligation was never fulfilled because the checks were dishonored, Panghilason
necessarily must pay Maximo the full amount of her indebtedness and the
corresponding legal interest.
• The Court may acquit an accused on reasonable doubt and still order payment of
civil damages already proved in the same case without need for a separate civil
action
• Padilla v. CA (129 SCRA 558): To require a separate civil action simply because the
accused was acquitted would mean needless clogging of court dockets and
MIK MALANG
Page 334 of 528

302 Mansion Biscuit Corporation v. CA | Kapunan thereafter, he filed another appeal with the CA assailing the decision of the RTC
G.R. No. 94713, November 23, 1995|250 SCRA 195 absolving Ty Teck and Siy Gui from civil liability in criminal cases
• Pending appeal, Ty Teck died so his counsel filed a motion to dismiss but the CA
FACTS denied and ordered his substitution by his children
• Sometime in 1981, Ty Teck Suan, as the president of Edward Ty Brothers • The CA rendered a decision dismissing the appeal and held that the civil liability
Corporation (the Company), ordered numerous cartons of nutri-wafer biscuits from sought to be enforced by Ang Cho was not the personal obligation of Ty Teck but a
Mansion Biscuit Corporation contractual obligation of the Company, hence, Ang Cho should file a separate civil
• As payment of the orders, Ty Teck Suan issued to Ang Cho Hong, president of action against it
Mansion, four (4) postdated checks as payment for the nutri-wafer biscuits before its • Hence, this appeal
delivery
• There were other four (4) postdated checks in the amount of P100,000.00 each, ISSUES & ARGUMENTS
issued by Ty Teck Suan with Siy Gui as co-signor • W/N civil liability can be enforced against Ty Teck for non-payment of the
• Subsequently, Mansion Biscuit delivered the goods. However, the first 4 checks goods notwithstanding the fact that the contract was between the Company,
were deposited, the same were dishonored for insufficient funds prompting Ang on behalf of Ty Teck, and Mansion
Cho to inform Ty Teck of the dishonor and requested him for its replacement
• Ty Teck failed to replace the dishonored checks, instead delivered 1,150 sacks of Ang Cho’s Argument: when Ty Teck issued the worthless checks inducing Mansion to deliver the
Australian flour to Mansion plus cash, which were applied to the amount of the first goods, 2 civil liabilities arose, arising from crime (Art. 100, RPC)and from tort or quasi-delict
postdated check that bounced Ty Teck’s Argument: they cannot be held liable for the Company’s contractual obligations and that
• Ang Cho then sent Ty Teck a formal demand letter requesting him to make good Ang Cho should file a separate case against it
the dishonored checks within 5 days
• Thereafter, the second batch of checks was issued by Ty Teck and Siy Gui, but these HOLDING & RATIO DECIDENDI
were later on dishonored again. This prompted Ang Cho to send a final demand
letter and upon failure to comply with it, he will then file an action against Ty Teck TY TECK AND SIY GUI ARE NOT LIABLE FOR THE CIVIL LIABILITIES
• For failure of Ty Teck to comply, an Information was filed against him for violation ARISING FROM THE CONTRACTUAL OBLIGATION OF THE COMPANY
of BP Blg. 22; identical information was likewise filed against Siy Gui as treasurer of THEY ARE REPRESENTING AS IT IS NOT THEIR PERSONAL
Edward Ty Brothers Corp. LIABILITY
• Both of them pleaded not guilty to the charges and thereafter filed a bond • The civil liability for non-payment of the nutri-wafer biscuits delivered by Mansion
• Notwithstanding the bond filed, the RTC issued an order of attachment on some of Biscuit to the Edward Ty Brothers Corporation cannot be enforced against Ty Teck
Ty Teck’s real properties, upon Ang Cho’s motion because the said civil liability was not his personal liability to Mansion Biscuit
• After the prosecution rested its case, Ty Teck filed a motion to dismiss by way of Corporation, rather, it was the contractual liability of Edward Ty Brothers
demurrer to evidence, which later on Siy Gui adopted, on the ground that the Corporation, of which Ty Teck Suan was president, to Mansion Biscuit Corporation
checks were issued as a mere guaranty for the payment of the goods delivered and as • As held by the Court of Appeals:
replacement for the first batch of checks. This was opposed by the prosecution o Assuming that plaintiff-appellant has basis for his quasi-delict claim, the
• The RTC issued an order granting the motion to dismiss claiming that the stare decisis same must be addressed still against Edward Ty Brothers Corporation for
in the cases already decided involving the same issue is where the check is issued as the established facts show that the post-dated checks were issued by
part of an arrangement to guarantee or secure the payment of an obligation, whether accused-appellee not in payment of his personal obligations but of the
pre-existing or not the drawer is not criminally liable for either Estafa or Violation corporation's. Moreover the fraud allegedly committed by accused-appellee
of BP Blg. 22, and found that Siy Gui’s liability had not been established by the was merely incidental to the contractual obligation, not an independent act
prosecution as it appeared that he had no personal transactions with Ang Cho which could serve as a source of obligation. The cases cited by plaintiff-
although he was a co-signatory in the second batch of four checks appellant, to illustrate that the existence of a contract does not preclude an
• The prosecution then filed a motion for reconsideration and for clarification with action on quasi-delict where the act that breaks the contract constitutes a
regard to their civil liabilities, which the RTC denied and held that they did not incur quasi-delict, have no application because the acts complained of therein were
any civil liability due to their acquittal performed to break an existing contract, whereas the alleged fraud herein
• Initially, Ang Cho filed a special civil action of certiorari with the CA to question the was committed at the time of the creation of the contractual relationship
order of the RTC setting aside the order of attachment, which the CA annulled. But and as an incident thereof
Page 335 of 528
• In the case at bench, the acquittal of Ty Teck Suan and Siy Gui extinguished both
their criminal and civil liability as it is clear from the order acquitting them that the
issuance of the checks in question did not constitute a violation of B.P. Blg. 22.
Consequently, no civil liability arising from the alleged delict may be awarded
Judgment appealed from AFFIRMED in toto.
KATH MATIBAG
Page 336 of 528

303 Heirs of Guaringv. CA| Mendoza
G.R. No. 108395 March 7, 1997
FACTS
• A Philippine Rabbit Bus collided with a Mitsubishi Lancer car, drven buy Guaring,
resulting to the death of the of the latter.
• Petitioners, heirs of Guaring , brought an action for damages, based on quasi delict,
in the RTC. Their evidence tended to show that the Philippine Rabbit bus tried to
overtake Guaring's car by passing on the right shoulder of the road and that in so
doing it hit the right rear portion of Guaring's Mitsubishi Lancer. The impact caused
the Lancer to swerve to the south-bound lane, as a result of which it collided with
the Toyota Cressida car coming from the opposite direction.
• Private respondents, on the other hand, presented evidence tending to show that the
accident was due to the negligence of the deceased Guaring. They claimed that it
was Guaring who tried to overtake the vehicle ahead of him on the highway and
that in doing so he encroached on the south-bound lane and collided with the
oncoming Cressida of U.S. Air Force Sgt. Enriquez. Private respondents claim that
as a result of the collision the Lancer was thrown back to its lane where it crashed
into the Rabbit bus.
• The RTC found the acquitted the driver but awarded damages.
• The CA held that since the petitioner’s action was based on the alleged negligence
of the driver, the subsequent acquittal of the driver made the action based on quasi
delict untenable.
ISSUES & ARGUMENTS

• W/N the Acquittal in the Criminal Case bars a Civil Action based on Quasi
Delict
•
NO, the Acquittal in the Criminal Case does not Bar a Civil Action based on
Quasi Delict.
• The judgment of acquittal extinguishes the liability of the accused for damages only
when it includes a declaration that the facts from which the civil might arise did not
exist. Thus, the civil liability is not extinguished by acquittal where the acquittal is
based on reasonable doubt as only preponderance of evidence is required in civil
cases; where the court expressly declares that the liability of the accused is not
criminal but only civil in nature as, for instance, in the felonies of estafa, theft, and
malicious mischief committed by certain relatives who thereby incur only civil
liability; and, where the civil liability does not arise from or is not based upon the
criminal act of which the accused was acquitted .
NINA MEIJA
Page 337 of 528

304 Cruz vs. CA (and Umali) | Francisco
G.R. No. 122445, November 18, 1997 | 282 SCRA 188 Dr. Cruz ACQUITTED but is ordered to pay the hairs of the deceased Lydia Umali FIFTY
THOUSAND PESOS as civil liability, ONE HUNDRED THOUSAND PESOS as moral
FACTS damages, and FIFTY THOUSAND PESOS as exemplary damages.
• Rowena Umali de Ocampo accompanied her mother Lydia Umali to the Perpetual
Help Clinic and General Hospital in Laguna. Upon examining Umali, respondent
Cruz found a “myoma” in her uterus, and scheduled her for a hysterectomy
operation.
• Rowena noticed that the clinic was untidy and dusty. She tried to persuade her
mother not to proceed with the operation, but Lydia told her that Cruz said she
must be operated on as scheduled.
• On separate occasions during the operation, Dr. Ercillo (the anesthesiologist) came
out of the operating room and instructed them to buy tagamet ampules and blood.
Even after Lydia was brought out of the operating room, they were instructed to
buy more blood.
• At one point, Rowena also noticed that her mother was gasping for breath.
However, the oxygen supply of the clinic has run out, and they had to go to San
Pablo District Hospital to get oxygen. Later on, Lydia went into shock, which
necessitated her transfer to San Pablo District Hospital, which was done without the
prior consent of the relatives.
• There, Dr. Ercillio re-operated on her because there was blood oozing from the
abdominal incision. Eventually, Lydia died. Her death certificate states “shock” as
the immediate cause of death and “disseminated intravascular coagulation (DIC)” as
the antecedent cause.
• The heirs of Lydia Umali charged Cruz and Ercillo with reckless imprudence and
negligence resulting to homicide.” Both pleaded not guilty. The MTCC held that Dr.
Ercillo was not guilty, but held Cruz responsible for the death of Lydia Umali. RTC
and CA affirmed in toto. Hence this petition.
ISSUES & ARGUMENTS

• W/N the Court may award damages to the heirs of Umali even if it acquitted
Cruz.
AWARD OF MORAL AND EXEMPLARY DAMAGES IS PROPER.

• While the following circumstances are insufficient to sustain a judgment of
conviction against Cruz. Nevertheless, this Court finds Cruz civilly liable for the
death of Lydia Umali, for while conviction of a crime requires proof beyond
reasonable doubt, only a preponderance of evidence is required to establish
civil liability.
• For insufficiency of evidence this Court was not able to render a sentence of
conviction but it is not blind to the reckless and imprudent manner in which Cruz
carried out her duties. No amount of compassion and commiseration not words of
bereavement can suffice to assuage the sorrow felt by Lydia Umali’s heirs. CHRISSIE MORAL
Page 338 of 528

305 Sapiera vs. CA | Bellosillo • The exoneration of Sapiera was based on the failure of the prosecution to present
G.R. No. 128927, September 14, 1999 | 314 SCRA 370 sufficient evidence showing conspiracy between her and the other accused (de
Guzman). However, Sapiera had admitted having signed the 4 checks on the reverse
FACTS side. Hence, she is deemed to be an indorser thereof, and thus made herself liable
• On several occasions, Sapiera, a sari-sari store owner, purchased from Monrico Mart for the payment of said checks.
certain grocery items, mostly cigarettes, and paid for them with checks issued by one • The dismissal of the criminal cases against Sapiera did not erase her civil liability
de Guzman, signed at the bank by Sapiera. since the dismissal was due to insufficiency of evidence and not from a declaration
• When presented for payment, the checks were dishonored because the drawer’s that the fact from which the civil action might arise did not exist.
account was already closed. Private respondent Sua informed de Guzman and • An accused acquitted of estafa may nevertheless be held civilly liable where the facts
Sapiera about the dishonor, but both failed to pay the value of the checks. Hence, 4 established by the evidence so warrant.
charges of BP 22 were filed against Sapiera, and 2 counts of BP 22 against de • The rationale behind the award of civil indemnity despite a judgment of acquittal is
Guzman before the RTC. that the two liabilities are separate and distinct from one another. While it is just and
• The RTC held de Guzman guilty and acquitted Sapiera of all charges of estafa. proper for the purposes of imprisonment of the accused that the offense should be
However, it did not rule on whether she could be held civilly liable. proved beyond reasonable doubt, there is no such evidence required for the purpose
• Sua filed an appeal with the RTC with regard the civil aspect, but it refused to give of indemnifying the complaining party. For the latter, only a preponderance of
due course to the appeal on the ground that the acquittal of Sapiera was absolute. It evidence should be required.
then filed a petition for mandamus with the CA, which was granted.
• The CA also ordered Sapiera to pay Sua P335,000, representing the aggregate face Petition DENIED. CA decision AFFIRMED.
value of the 4 checks indorsed by Sapiera plus legal interest.
• Sapiera filed a motion for reconsideration, alleging that Sua had already recovered
P125,000 under the criminal proceedings. The CA then corrected its previous award
by deducting such amount. Hence this petition.
ISSUES & ARGUMENTS

• W/N the CA erred in requiring Sapiera to pay civil indemnity after the trial
court had acquitted her of criminal charges.
SAPIERA MAY BE ORDERED TO PAY CIVIL INDEMNITY DESPITE

ACQUITTAL OF CRIMINAL CHARGES FOR ESTAFA.
• Section 2(b) of Rule 111 of the RoC provides: “Extinction of the penal action does
not carry with it extinction of the civil, unless the extinction proceeds from a
declaration in a final judgment that the fact from which the civil might arise did not
exist.
• Thus, the civil liability is not extinguished by acquittal where: (a) the acquittal is
based on reasonable doubt; (b) where the court expressly declares that the liability of
the accused is not criminal but only civil in nature; and, (c) where the civil liability is
not derived from or based on the criminal act of which the accused is acquitted.
• Thus, under Article 29 of the NCC16.
CHRISSIE MORAL
16
When the accused in a criminal prosecution is acquitted on the ground that his guilt has not been proved
beyond reasonable doubt, a civil action for damages for the same act or omission may be instituted. Such In a criminal case where the judgment of acquittal is based upon reasonable doubt, the court shall so declare.
action requires only a preponderance of evidence. Upon motion of the defendant, the court may require the In the absence of any declaration to that effect, it may be inferred from the text of the decision whether or
plaintiff to file a bond to answer for damages in case the complaint should be found to be malicious. not the acquittal is due to that ground.
Page 339 of 528
306 Manantan vs. Court of Appeals | Quisumbing • On the first issue, petitioner opines that the Court of Appeals should not have
G.R. No. 107125, January 29, 2001 | disturbed the findings of the trial court on the lack of negligence or reckless
imprudence under the guise of determining his civil liability. He submits that in
FACTS finding him liable for indemnity and damages, the appellate court not only placed his
• Fiscal Ambrocio decided to catch shrimps at the irrigation canal at his farm. He acquittal in suspicion, but also put him in “double jeopardy.”
invited the deceased who told him that they borrow the Ford Fiera of the accused • Our law recognizes two kinds of acquittal, with different effects on the civil liability
Manantan. The deceased went to borrow the Ford Fiera but said that the accused of the accused. First is an acquittal on the ground that the accused is not the author
also wanted to come along. So Fiscal Ambrocio and the deceased dropped by the of the act or omission complained of. This instance closes the door to civil liability,
accused at the Manantan Technical School. They drank beer there before they for a person who has been found to be not the perpetrator of any act or omission
proceeded to the farm using the Toyota Starlet of the accused. At the farm they cannot and can never be held liable for such act or omission. There being no delict,
consumed one more case of beer. Later that afternoon they drank beer again until civil liability ex delicto is out of the question, and the civil action, if any, which may be
about 8:30 in the evening when the accused invited them to go bowling which they instituted must be based on grounds other than the delict complained of. This is the
agreed to. While waiting for a vacant alley they drank one beer each. situation contemplated in Rule 111 of the Rules of Court. The second instance is
• After waiting for about 40 minutes and still no alley became vacant the accused an acquittal based on reasonable doubt on the guilt of the accused. In this case,
invited his companions to go to LBC Night Club. They had drinks and took some even if the guilt of the accused has not been satisfactorily established, he is not
lady partners at the LBC. Going home, the accused was driving at a speed of about exempt from civil liability which may be proved by preponderance of evidence only.
40 kilometers per hour along the middle portion of the highway (although according This is the situation contemplated in Article 29 of the Civil Code, where the civil
to Cudamon, the car was running at a speed of 80 to 90 kilometers per hours on the action for damages is “for the same act or omission.” However, the judgment in the
wrong lane of the highway because the car was overtaking a tricycle) when they met criminal proceeding cannot be read in evidence in the civil action to establish any
a passenger jeepney with bright lights on. The accused immediately tried to swerve fact there determined, even though both actions involve the same act or omission.
the car to the right and move his body away from the steering wheel but he was not The reason for this rule is that the parties are not the same and secondarily, different
able to avoid the oncoming vehicle and the two vehicles collided with each other at rules of evidence are applicable. Hence, notwithstanding herein petitioner’s acquittal,
the center of the road. the Court of Appeals in determining whether Article 29 applied, was not precluded
• As a result of the collision the car turned turtle twice and landed on its top at the from looking into the question of petitioner’s negligence or reckless imprudence
side of the highway. Fiscal Ambrocio lost consciousness. When he regained • On the second issue, petitioner insists that he was acquitted on a finding that he
consciousness he was still inside the car lying on his belly with the deceased on top was neither criminally negligent nor recklessly imprudent. Inasmuch as his civil
of him. Ambrocio pushed away the deceased and then he was pulled out of the car liability is predicated on the criminal offense, he argues that when the latter is not
by one of the witness. Afterwards, the deceased who was still unconscious was proved, civil liability cannot be demanded. He concludes that his acquittal bars any
pulled out from the car. Both Fiscal Ambrocio and the deceased were brought to a civil action.
Clinic. The deceased died that night while Ambrocio suffered only minor injuries to • Our scrutiny of the lower court’s decision supports the conclusion of the appellate
his head and legs. court that the acquittal was based on reasonable doubt; hence, petitioner’s civil
• RTC: Manantan not guilty and was acquitted. CA modified the decision holding liability was not extinguished by his discharge. We note the trial court’s declaration
Manantan civilly liable for his negligent and reckless act of driving his car which was did not discount the possibility that “the accused was really negligent.” This clearly
the proximate cause of the vehicular accident. shows that petitioner’s acquittal was predicated on the conclusion that his guilt had
not been established with moral certainty. Stated differently, it is an acquittal based
ISSUES & ARGUMENTS on reasonable doubt and a suit to enforce civil liability for the same act or omission
• W/N petitioner’s acquittal foreclosed any further inquiry with regard to his lies.
negligence or reckless imprudence? NO. Petition denied. Decision of Court of Appeals Affirmed.
• W/N petitioner’s acquittal extinguished his civil liability? NO.
Issues discussed in seriatim.

PETITIONER IS NOT EXEMPT FROM CIVIL LIABILITY. HIS
ACQUITTAL IN THE CRIMINAL CASE WAS BASED ON REASONABLE
DOUBT AND DOES NOT BAR A SUIT ENFORCING CIVIL LIABILITY. MAUI MORALES
Page 340 of 528

307 Castillo vs. CA | Fernan C.J. • But this rule is not without exception. Thus, Section 2 (c) of Rule 111 of the
G.R. No. 48541 August 21, 1989| 176 SCRA 591 Rules of Court provides:
Extinction of the penal action does not carry with it extinction of the
FACTS civil, unless the extinction proceeds from a declaration from a final
• Petitioner Castillo was driving his jeep on the right lane of the McArthur judgment that the fact from which the civil action might arise did not
Highway with his wife, father and a minor child, as passengers. Just past San exist
Nicolas bridge he noticed, a speeding oncoming car along the same lane he was • Negligence, being the source and foundation of actions of quasi-delict, is the
driving, overtaking a cargo truck ahead of it. He switched on his headlights to basis for the recovery of damages. In the case at bar, the Court of Appeals
signal the car to return to its own right lane as the way was not clear for it to found that no negligence was committed by Juanito Rosario to warrant an
overtake the truck. award of damages to the petitioners.
• The car, driven by private respondent Rosario, didn’t stop so Castillo swerved • It was the Court of Appeals findings that the collision was not due to the
his jeep to the right towards the shoulder, because of the impact, the car was negligence of Juanita Rosario but rather it was Castillo's own act of driving the
badly damaged and the passengers were injured. jeep to the shoulder of the road where the car was, which was actually the
• Private respondent Rosario had a different account of what actually happened. proximate cause of the collision. With this findings, the Court of Appeals
He alleged that because of the slow moving truck in front of him, he tried to exonerated Juanito Rosario from civil liability on the ground that the alleged
overtake it but he first made sure that it the road was clear and he even blew his negligence did not exist.
horn. While in the process of overtaking, the car’s front left tire suddenly burst
due to pressure. Because of this, the car veered towards the left side so private
respondent just drove it to that direction to find a safe place to park the car and
fix it.
• But barely had the said private respondent parked his car on the left shoulder of
the road and just as he was about to get off to fix the flat tire, the car was
suddenly bumped by the jeep driven by Castillo which came from the opposite
direction.
• A civil case for the recovery of damages was instituted by the petitioners. While
this case was pending, the provincial fiscal filed an information against Rosario,
for double physical injuries; double less serious physical injuries; and damage to
property thru reckless imprudence. RTC convicted him. But he was acquitted
by the CA on the ground that his guilt has not been proved beyond reasonable
doubt.
ISSUES & ARGUMENTS

W/N an action for damages based on quasi-delict is barred by a decision of the appellate
court acquitting the accused, the body of which lays the blame on the plaintiff but in its
dispositive part, declares the guilt of the accused not proved beyond reasonable doubt.
Yes.
• There is no dispute that the subject action for damages, being civil in nature, is
separate and distinct from the criminal aspect, necessitating only a
preponderance of evidence
• Therefore, the acquittal or conviction in the criminal case is entirely irrelevant
in the civil case.
MAGIC MOVIDO
Page 341 of 528

308 Bunag, Jr. vs. CA | Regalado, J.:
G.R. No. 101749, July 10, 1992 | 211 SCRA 440 ISSUES & ARGUMENTS
• W/N Bunag’s claim has merits
FACTS
• Background:
o Zenaida and Bunag are lovers and two weeks before the incident they had
a fight. On the afternoon of Sept. 8, 1973, the following incident HOLDING & RATIO DECIDENDI
occurred…
• Zenaida Cirilo’s version of the story: NO.
o Bunag, together with an unidentified male companion, abducted her in the • It is true that in this jurisdiction, we adhere to the time-honored rule that an
vicinity of the San Juan de Dios Hospital in Pasay City action for breach of promise to marry has no standing in the civil law, apart
o She was brought in to a motel where due to her natural weakness, being a from the right to recover money or property advanced by the plaintiff upon the
woman and her small stature, she was raped faith of such promise
o After being ‘deflowered’ against her will and consent, she once again asked • Generally, therefore, a breach of promise to marry per se is not actionable,
Bunag to let her go home but the latter would not agree until they get except where the plaintiff has actually incurred expenses for the wedding and
married the necessary incidents thereof
o They proceeded to the house of Juana de Leon, Bunag’s grandmother in • However, the award of moral damages is allowed in cases specified in or
Pamplona, Las Pinas, Metro Manila, where the father of Bunag later analogous to those provided in Art. 2219 of the Civil Code
arrived and assured Zenaida that the following day, they will go to Bacoor, o Correlatively, under Art. 21 of the said Code, in relation to Par. 10 of
to apply for a marriage license, which they did Art. 2219, any person who willfully causes loss or injury to another in
o After filing their applications for a marriage license, they both returned to a manner that is contrary to morals, good customs, or public policy
Juana’s house and lived there as husband and wife until Sept. 29, 1973 (21 shall compensate the latter for moral damages
days) • Generally, the basis of civil liability is the fundamental postulate of our law that
o However, after some time, Bunag never returned and Zenaida was forced every person criminally liable for a felony is also civilly liable
to go back to her parent’s home o In other words, criminal liability will give rise to civil liability ex delicto
• Conrado Bunag Jr.’s version of the story: only if the same felonious act or omission results in damage or injury
o He claims that they have had earlier plans to elope and get married, and to another and is the direct and proximate cause thereof
this fact was known to their friends, among them, Architect Chito o Hence, extinction of the penal action does not carry with it the
Rodriguez extinction of civil liability unless the extinction proceeds from a
o The couple made good their plans to elope on the afternoon of Sept. 8, declaration in a final judgment that the fact from which the civil
1973, where together with their officemate (Lydia), together with liability might arise did not exist
Guillermo Ramos, Jr., they had some snacks in a foursome • The dismissal of the complaint for forcible abduction with rape was by mere
o When Lydia and Guillermo took off, they took a taxi to the Golden Gate resolution of the fiscal at the preliminary investigation stage
and Flamingo Hotels to try to get a room but it was full and they finally got o There is no declaration in a final judgment that the fact from which
a room at Holiday Hotel the civil case might arise did not exist
o After checking out, they proceeded to the house of Juana de Leon at o Consequently, the dismissal did not in any way affect the right of
Pamplona, Las Pinas where they stayed until Sept. 29, 1973 herein private respondent to institute a civil action arising from the
o They had bitter disagreements over money and the threats made to his life offense because such preliminary dismissal of the penal action did not
prompted him to break off their plan to get married carry with it the extinction of the civil action
• Zenaida filed a claim for damages for the breach of promise to marry and the lower
courts ruled in her favor granting damages
• Bunag filed a petition claiming the award of damages was excessive and improper
but was denied, hence the present petition for review on certiorari
CHRISTINE OCAMPO
Page 342 of 528
309 People of the Philippines v. Relova | Feliciano from the offense charged subsequently under a national statute, provided that both
G.R. No. L-45129, March 6, 1987 | 148 SCRA 292 offenses spring from the same act.
• Where the offenses charged are penalized either by different sections of the same
FACTS statute or by different statutes, the important inquiry relates to the IDENTITY OF
• Equipped with a search warrant, members of the Batangas City Police together with OFFENSES CHARGED. The constitutional protection against double jeopardy is
personnel of the Batangas Electric Light System search and examined the premises available only where an identity is shown to exist between the earlier and the
of Opulencia Carpena Ice Plant and Cold Storage owned and operated by private subsequent offense charged. In contrast, where one offense is charged under a
respondent Manuel Opulencia. municipal ordinance while the other is penalized by a statute, the critical inquiry is to
• They discovered that electric wiring, devices and contraptions had been installed, the IDENTITY OF THE ACTS. The constitutional protection against double
without the necessary authority from the city government and architecturally jeopardy is available so long as the acts which constitute or have given rise to the 1st
concealed inside the walls of the building. The devices were designed purposely to offense under a municipal ordinance are the same acts which constitute or have
decrease the readings of electric current consumption in the electric meter of the given rise to the offense charged under a statute.
plant. • The question of IDENTITY OF OFFENSES is addressed by examining the
• Opulencia admitted in a written statement that he had caused the installation of the essential elements of each of the 2 offenses charged. The question of IDENTITY
devices in order to decrease the readings of his electric meter. OF THE ACTS must be addressed by examining the location of such acts in time
• Assistant City Fiscal of Batangas filed an information against Opulencia for violation and space.
of Ordinance No. I, Series of 1974, Batangas City. • In the instant case, the relevant acts took place within the same time frame. The
• Trial Court dismissed the information on the ground of prescription. taking of electric current was integral with the unauthorized installation of electric
• 14 days later, Acting City Fiscal of Batangas City filed another information for theft wiring and devices.
under Article 308, RPC. • The dismissal by the lower court of the information for the violation of the
• Trial Court dismissed the case on the ground that the 2nd information will violate the Ordinance upon the ground that such offense had already prescribed amounts to an
right of the accused against double jeopardy. acquittal. An order sustaining a motion to quash based on prescription is a bar to
• Acting City Fiscal filed a Petition for Certiorari and Mandamus. another prosecution for the same act.
ISSUES & ARGUMENTS NO. THE EXTINCTION OF CRIMINAL LIABILITY DOES NOT CARRY
• W/N the filing of the 2nd information constitutes violation of the right against WITH IT THE EXTINCTION OF CIVIL LIABILITY ARISING FROM THE
double jeopardy. OFFENSE CHARGED.
• W/N the extinction of the criminal liability carries with it the extinction of • Because no reservation of the right to file a separate civil action was made, the civil
civil liability arising from the offense charged. action for recovery of civil liability arising from the offense charged was impliedly
instituted with the criminal action.
HOLDING & RATIO DECIDENDI • However, the extinction of criminal liability whether by prescription or by the bar of
double jeopardy does not carry with it the extinction of civil liability arising from the
YES. THE 2ND INFORMATION CONSTITUTES VIOLATION OF THE offense charged.
RIGHT AGAINST DOUBLE JEOPARDY. • Since there is no evidence in the record as to the amount or value of the electric
• The constitution provides that “no person shall be twice put in jeopardy of power appropriated by Opulencia, the civil action should be remanded to the CFI of
punishment for the same offense. If an act is punished by a law and an ordinance, Batangas City for reception of evidence on the amount or value of the electric
conviction or acquittal under either shall constitute a bar to another prosecution for power appropriated and converted by Opulencia.
the same act.”
• The first sentence sets forth the general rule- the constitutional protection against Petition denied. Civil action for related civil liability remanded to the CFI.
double jeopardy is NOT available where the second prosecution is for an offense
that is DIFFERENT from the offense charged in the first prosecution, although
both the 1st and 2nd offenses may be based upon the same act. The second sentence
embodies an exception- the constitutional protection against double jeopardy IS
available although the prior offense charged under the ordinance be DIFFERENT
TIN OCAMPO-TAN
Page 343 of 528

310 Llorente v Sandiganbayan | Sarmiento obligations noted on his clearance totalling Pl0,714.98. For this reason, the clearance
G.R. No. 85464 October 3, 1991 | was held up in his office and did not reach Atty. Rodriguez.
• It appears that Mr. Curio heavily pursued the passing of his clearance to the point
FACTS that he filed a case in the Tanodbayan against Atty. Llorente and Col. Dueñas.
• As a result of a massive reorganization in 1981, hundreds of Philippine Coconut • Subsequently, Mr. Curio was able to file another clearance which did not require the
Authority (PCA) employees resigned effective October 31, 1981. Among them were aforesaid condition.
Mr. Curio, Mrs. Perez, Mr. Azucena, and Mrs. Javier. By reason of which they were • Between December 1981 and December 1986, Mr. Curio failed to get gainful
all required to apply for PCA clearances in support of their gratuity benefits, one of employment; as a result, his family literally went hungry. In 1981, he applied for
the condition of which: work with the Philippine Cotton Authority, but was refused, because he could not
The clearance shall be signed by the PCA officers concemed only when there is no item present his PCA clearance. The same thing happened when he sought employment
appearing under "PENDING ACCOUNTABILITY" or after every item previously with the Philippine Fish Marketing Administration in January 1982. In both
entered thereunder is fully settled. Settlement thereof shall be written in RED ink. prospective employers, the item applied for was P2,500.00 a month. At that time, he
• After the clearance was signed by the PCA officers concerned, it was to be was only about 45 years old and still competitive in the job market. But in 1986,
approved, first, by Atty. Llorente, in the case of a rank-and-file employee, or by Col. being already past 50 years, he could no longer be hired permanently, there being a
Dueñas, the acting administrator, in the case of an officer, and then by Atty. regulation to that effect. His present employment with the Philippine Ports
Rodriguez, the corporate auditor . Authority, which started on March 16, 1987, was casual for that reason. Had his
• The clearance of Mrs. Javier dated October 30, 1991 was signed by all PCA officers gratuity benefits been paid in 1981, he would have received a bigger amount,
concerned, including Mrs. Sotto even though the former had unsettled obligations considering that since then interest had accrued and the foreign exchange rate of the
noted thereon, viz 'SIS loan — P5,387.00 and UCPB car loan P19,705.00, or a total peso to the dollar had gone up.
of P25,092.00, and later on approveed by Col. Dueñas, Mrs Javier being an officer, • On December 10, 1986, an Information for violation of Section 3(c) of the Anti-
and Atty. Rodriguez. Similarilv the, voucher of Mrs. Javier for her gratuity benefits Graft and Corrupt Practices Act was filed against Atty. Llorente for which he was
likewise recited her accountabilities of P25,092.00 plus P92.000.00, which was acquitted but held civilly liable for damages (P90,000) under Article 19 of the Civil
handwritten. Both accounts were deducted from her gratuity benefits, and the Code.
balance released to her on November 16, 1981. The voucher passed post-audit by
Atty. Rodriguez on December 1, 1981. ISSUES & ARGUMENTS
• The said P92,000.00 was the disallowed portion of the cash advances received by • W/N Sandiganbayan erred in holding Atty. Llorente civilly liable despite his
Mr. Curio in connection with his duties as "super cargo" in the distribution of seed acquittal?
nuts throughout the country. He received them through and in the name of Mrs. o Petitioner’: The Sandiganbayan's Decision is erroneous even if the
Javier from the UCPB. When the amount was disallowed, the UCPB withheld from Sandiganbayan acquitted him therein, because he was never in bad faith as
the PCA certain receivables; the latter, in turn, deducted the same amount from the indeed found by the Sandiganbayan.
gratuity benefits of Mrs. Javier, she being primarily liable therefor. At the time of the
deduction, the additional liquidation papers had already been submitted and were in HOLDING & RATIO DECIDENDI
process. Just in case she would not be successful in having the entire amount wiped
out, she requested Mr. Curio, who admittedly received it, to execute, as he did, an NO. It is the essence of Article 19 of the Civil Code, under which the petitioner
affidavit dated November 26, 1981, in which he assumed whatever portion thereof was made to pay damages, together with Article 27, that the performance of duty
might not be allowed. be done with justice and good faith.
• The clearance of Mr. Curio dated November 4,1981, likewise favorably passed all
officers concerned, including Mrs. Sotto, the latter signing despite the notation • The records show that the office practice indeed in the PCA was to clear the
handwritten on December 8, 1981, that Mr. Curio had pending accountabilities, employee (retiree) and deduct his accountabilities from his gratuity benefits. There
namely: GSIS loan — 2,193.74, 201 accounts receivable — P3,897.75, and UCPB seems to be no debate about the existence of this practice (the petitioner admitted it
loan — P3,623.49, or a total of P10,714.78. However, when the clearance was later on) and in fact, he cleared three employees on the condition that their
submitted to Atty. Llorente for approval, he refused to approve stating as cause the obligations should be deducted from their benefits. The Court quotes:
fact that he was already aware of the affidavit dated November 26, 1981, in which Confronted with these evidence (sic), Atty. Llorente conceded, albeit grudgingly, the existence of
Mr. Curio assumed to pay any residual liability for the disallowed cash advances, the practice by the accounting division of not complying with Condition (a). He, however,
which at the time, December 8, 1981. Moreover, Mr. Curio had other pending claimed that he learned of the practice only during the trial of the case and that he must have
Page 344 of 528
inadvertently approved the clearances of Mrs. Perez, Mr. Azucena, and possibly others who
were similarly situated (TSN, March 9/88,pp. 4-5). This the evidence belies. First, he
himself testified that when the clearance of Mr. Curio was presented to him in December
1981, it already bore the signature of Mrs. Sotto of the accounting division and the notation
set opposite her name about the outstanding accountabilities of Mr. Curio; but he (Atty.
Llorente) significantly did not ask her why she signed the clearance (TSN, Nov. 24/87, pp.
24-25). Second, in that month, Atty. Llorente approved Mrs. Perez's and Mr.
Azucena's vouchers showing that hey has pending obligations to the GSIS
and the UCPB, which were being deducted from their gratuity benefits
(thus are similarly situated with Mr. Curio). Attached to those vouchers were the
clearances as supporting documents (Exhs. M-2 and N-1; TSN, Dec. 7/87, pp. 13,23).
And third, in the same month, Atty. Llorente was already aware of the case of Mrs. Javier
whose clearance and voucher were, according to him, precisely withheld because of her unsettled
accountability for the cash advances of P92,000.00, but here later on given due course; and
her gratuity benefits released on November 16, 1981, minus that amount (TSN, Nov.
24/87, pp. 31-32; Exhs. L, L-1, L-2 and L-3).
The cash advances of P92,000.00 were the primary obligation of Mrs. Javier, since they were
secured through her and in her name from the UCPB. That was why they were charged to and
deducted from, her gratuity benefits. Consequently, as early as that date and in so far as the
PCA and the UCPB were concerned, the accountability was already fully paid. The
assumption of residual liability by Mr. Curio for the cash advances on November 26, 1981,
was a matter between him and Mrs. Javier.
• The general rule is that this Court is bound by the findings of fact of the
Sandiganbayan.
• The acts of Atty, Llorente were legal (that is, pursuant to procedures), as he insists in
this petition, yet it does not follow, as we said, that his acts were done in good faith.
For emphasis, he had no valid reason to "go legal" all of a sudden with respect to
Mr. Curio, since he had cleared three employees who, as the Sandiganbayan found,
"were all similarly circumstanced in that they all had pending obligations when, their
clearances were filed for consideration, warranting similar official action."
• The Court is convinced that the petitioner had unjustly discriminated against Mr.
Curio.
• It is no defense that the petitioner was motivated by no ill-will (a grudge, according
to the Sandiganbayan), since the facts speak for themselves. It is no defense either
that he was, after all, complying merely with legal procedures since, as we indicated,
he was not as strict with respect to the three retiring other employees. There can be
no other logical conclusion that he was acting unfairly, no more, no less, to Mr.
Curio.
TEL VIRTUDEZ
Page 345 of 528

311 People vs. Corpuz | Ynares-Santiago was merely acting under the direction of his superiors and was unaware that his acts
G.R. No. 148198, October 1, 2003 constituted a crime, he may not be held criminally liable for an act done for and in
behalf of his employer.
FACTS • From the foregoing testimony, it is clear that all appellant did was receive the
• In June 1998, Cabantog, San Diego, Pascual and Surio (the original complainants) processing fees upon instruction of Mrs. Reyes. She neither convinced the private
was introduced by a certain Aling Josie to the company Alga-Moher International complainants to give their money nor promised them employment abroad.
Placement Services Corporation which was managed by Evelyn Gloria H. Reyes • Moreover, it is the prosecution which has the burden of proof in establishing guilt
a.k.a. Mrs. Ty. of the accused. The conviction of appellant must rest not on the weakness of his
• Mrs. Reyes, the Pres. And GM, asked them to accomplish application forms and to defense, but on the strength of the prosecution’s evidence. In the case at bar, the
pay P10,000 each as the placement fee. prosecution failed to adduce sufficient evidence to prove appellant’s active
• In July 30, 1998, the four returned but Reyes was not present. As per instructions participation in the illegal recruitment activities of the agency.
through a phone call, Beth Corpuz, the secretary, received such payments and
allegedly remitted them to Reyes. The treasurer was also absent then.
• The company’s license was to expire on Aug 24, 1999. However, unknown to
Corpuz, the license was suspended POEA on July 29, 1998, 1 day before she
received the placement fees.
• After two months, nothing happened to their applications, so private complainants
asked for a refund from Corpuz. When they were forwarded to Mrs. Reyes, the
latter said that what Corpuz gave her was a payment to Beth’s debt.
• Beth Corpuz was then charged with Illegal Recruitment in Large Scale constituting
economic sabotage under Sec. 6 (l) and (m) in relation to Sec. 7(b) of R.A. No. 8042,
otherwise known as the “Migrant Workers and Overseas Filipinos Act of l995.”
• While the case was pending, Corpuz’s sister-in-law refunded the placement fees and
the complainants desisted.
• Corpuz was found guilty by the RTC and was sentenced with life imprisonment and
to pay a fine of P500,000.00. There was no pronouncement as to civil liability as
Corpuz reimbursed the placement fees.
• The trial court convicted appellant based on its findings that despite the suspension
of the agency’s license, appellant still convinced the applicants to give their money
with the promise to land a job abroad. Moreover, as the registered secretary of the
agency she had management control of the recruitment business.
• She appealed to the SC.
ISSUES & ARGUMENTS

• W/N Corpuz is guilty of Illegal Recruitment
• W/N Corpuz has management control.
CORPUZ NOT GUILTY

• An employee of a company or corporation engaged in illegal recruitment may be
held liable as principal, together with his employer, if it is shown that he actively and
consciously participated in illegal recruitment.
• The culpability of the employee therefore hinges on his knowledge of the offense
and his active participation in its commission. Where it is shown that the employee MARICE PACHECO
Page 346 of 528

312 Falgui vs. Provincial Fiscal | HOLDING & RATIO DECIDENDI
No. L-27523. February 25, 1975|
There is no prejudicial question
FACTS
• On April 11, 1967, respondent Ramos filed a criminal complaint for usury against A pre-judicial question is one that arises in a case, the resolution of which is a logical
petitioners with the Office of the Provincial Fiscal of Batangas (I.S. No. 593). In his antecedent of the issue involved in said case, and the cognizance of which pertains to
affidavit-complaint Ramos stated, among others, that what he asked for and another tribunal. 1 It is based on a fact distinct and separate from the crime but so
obtained from petitioner spouses Pedro Palacio, Sr. and Juliana Macalalad-Palacio, intimately connected with it that it is determinative of the guilt or innocence of the
was a loan in the amount of P60,000.00; that, however, the Palacio spouses asked accused. 2 We have heretofore ruled that a pre-judicial question must be determinative of
him to execute a deed of sale on August 5, 1965 in favor of their heirs (the other the case before the court and jurisdiction to try the same must be lodged in another
petitioners) over three (3) parcels of land with an aggregate area of sixty-nine (69) tribunal.
hectares whose market value was about P300,000.00; that on the same day he and
the other petitioners executed a Contract to Sell (which was, however, dated August Article 36 leaves the procedure for invoking, considering and deciding prejudicial
6, 1965) whereby the Palacios granted him an option to repurchase the property for questions to the rules of court promulgated by the Supreme Court. Inasmuch as in
P133,000.00 within two (2) years; that on January 17, 1967, or some seven (7) Section 5, Rule 111 and Dasalla and Estrella We have provided and ruled that the
months before the expiration of the repurchase period, he wrote the Palacios question of whether or not a criminal action shall he suspended because of a prejudicial
offering to repurchase the property, with a request for the reduction of interest question may not be raised during the stage of preliminary investigation but only after a
upon the principal amount which he allegedly obtained from the Palacios by way of finding of probable cause and the case is already in the court of proper jurisdiction for
a loan; that his request for reduction of interest was rejected by the Palacio spouses, trial, the contention of petitioners is clearly untenable. (Isip v. Gonzales, 39 SCRA 263-
who insisted on the repurchase price of P133,000.00; that in view of pressing 264)
circumstances, he had to pay the Palacios the said sum of P133,000.00, thus he was
compelled to pay the Palacios the sum of P73,000.00 by way of interest for
seventeen (17) months on the principal loan of only P60,000.00
• On April 24, 1967, petitioner spouses Pedro Palacio, Sr. and Juliana Macalalad-
Palacio filed with the Court of First Instance of Batangas (Balayan Branch) a
complaint for damages (Civil Case No. 660) against respondent Ramos for allegedly
causing the publication in three (3) metropolitan newspapers of malicious, libelous
and defamatory contents of his affidavit to the effect that petitioner spouses
"loaned" to respondent the amount of P60,000.00 and that said petitioners charged
respondent Ramos with interest in the amount of P73,000.00.
• On April 26, 1967, petitioners filed a motion in I. S. No. 593 asking respondent
Provincial Fiscal of Batangas to suspend the preliminary investigation on the ground
that prejudicial questions are involved in Civil Case No. 69104 of the Court of First
Instance of Manila and in Civil Case No. 660 of the Court of First Instance of
Batangas (Balayan Branch). The motion was opposed by respondent Ramos. After
extensive arguments between the parties on the issue of pre-judicial question,
respondent Assistant Provincial Fiscal denied petitioners' motion for suspension of
the preliminary investigation. Petitioners filed a motion for reconsideration, but the
same was denied.
ISSUES & ARGUMENTS

• W/N there is a prejudicial question
VP PADILLA
Page 347 of 528
313 Isabelo Apa, Manuel Apa and Leonilo Jacalan v Hon. Fernandez | Mendoza,
G.R. No. 112381, March 20, 1995 |
FACTS
• Special Civil Action of Certiorari to set aside orders of Judge Romulo Fernandez of
the RTC Branch 54 Lapu-Lapu City. Petitioners’ motion for reconsideration in a
criminal case filed against them for squatting were denied by respondent judge.
Petitioners anchor their claim against said judge on a prior case against private
respondents regarding ownership. Respondents allege that the civil case filed by
them against respondents would create a prejudicial question.
ISSUES & ARGUMENTS

• W/N The civil case creates a prejudicial question
The previous civil case creates a prejudicial question

• A prejudicial question is a question which is based on a fact distinct and separate
from the crime but is so connected that its resolution is determinative of the guilt or
innocence of accused.
• Elements: (1) civil action involves an issue similar or intimately connected to the
issue in the criminal action (2) resolution of such issue resolves whether criminal
action proceeds
• Criminal case alleges that petitioners squatted without knowledge or consent of
owner Tigol. Civil case was regarding the ownership of the lands in question, the
civil case in 1994 nullified the title of Tigol and declared both petitioners and
respondents as co-owners of the land.
• Respondents argue that owners can be ejected from their land, this can be but only
if there is a reason i.e. he let it to some other person. Here there is no such
allegation respondents and petitioners both base their case on ownership.
CHRIS PALARCA
Page 348 of 528

314 Beltran vs. People , G.R. No. 137567 June 20, 2000 | Buena, J.
ISSUE:
FACTS: Whether or not Beltran is correct in with his contentions?
• Petitioner Meynardo Beltran and wife Charmaine E. Felix were married on June 16, HOLDING & RATION DECIDENCI:
1973 at the Immaculate Concepcion Parish Church in Cubao, Quezon City.
NO.
• On February 7, 1997, after twenty-four years of marriage and four children, A. The rationale behind the principle of prejudicial question is to avoid two conflicting
petitioner filed a petition for nullity of marriage on the ground of psychological decisions. It has two essential elements:
incapacity under Article 36 of the Family Code before Branch 87 of the Regional
Trial Court of Quezon City. a.) the civil action involves an issue similar or intimately related to the issue raised
in the criminal action; and
• In her Answer to the said petition, petitioner's wife Charmaine Felix alleged that it
was petitioner who abandoned the conjugal home and lived with a certain woman b.) the resolution of such issue determines whether or not the criminal action may
named Milagros Salting. 4 Charmaine subsequently filed a criminal complaint for proceed.
concubinage 5 under Article 334 of the Revised Penal Code against petitioner and his
paramour before the City Prosecutor's Office of Makati who, in a Resolution dated The pendency of the case for declaration of nullity of petitioner's marriage is not a
September 16, 1997, found probable cause and ordered the filing of an Information prejudicial question to the concubinage case.
6 against them.
For a civil case to be considered prejudicial to a criminal action as to cause the

• On March 20, 1998, petitioner, in order to forestall the issuance of a warrant for his suspension of the latter pending the final determination of the civil case, it must
arrest, filed a Motion to Defer Proceedings Including the Issuance of the Warrant of appear not only that the said civil case involves the same facts upon which the criminal
Arrest in the criminal case. Petitioner argued that the pendency of the civil case for prosecution would be based, but also that in the resolution of the issue or issues raised in
declaration of nullity of his marriage posed a prejudicial question to the the aforesaid civil action, the guilt or innocence of the accused would necessarily be
determination of the criminal case. Judge Alden Vasquez Cervantes denied the determined.
foregoing motion in the Order 7 dated August 31, 1998. Then, petitioner filed the
instant petition for review in the Supreme COurt. The import of Article 40 of the Family Code, as explained in the case of Domingo vs. CA,
is that for purposes of remarriage, the only legally acceptable basis for declaring a
• Petitioner contends that the pendency of the petition for declaration of nullity of his previous marriage an absolute nullity is a final judgment declaring such previous marriage
marriage based on psychological incapacity under Article 36 of the Family Code is a void, whereas, for purposes of other than remarriage, other evidence is acceptable.
prejudicial question that should merit the suspension of the criminal case for
concubinage filed against him by his wife. B. With regard to petitioner's argument that he could be acquitted of the charge of
concubinage should his marriage be declared null and void, suffice it to state that
• Petitioner also contends that there is a possibility that two conflicting decisions even a subsequent pronouncement that his marriage is void from the beginning is
might result from the civil case for annulment of marriage and the criminal case for not a defense. Thus, in the case at bar it must also be held that parties to the
concubinage. In the civil case, the trial court might declare the marriage as valid by marriage should not be permitted to judge for themselves its nullity, for the same
dismissing petitioner's complaint but in the criminal case, the trial court might acquit must be submitted to the judgment of the competent courts and only when the
petitioner because the evidence shows that his marriage is void on ground of nullity of the marriage is so declared can it be held as void, and so long as there is no
psychological incapacity. Petitioner submits that the possible conflict of the courts' such declaration the presumption is that the marriage exists for all intents and
ruling regarding petitioner's marriage can be avoided, if the criminal case will be purposes.
suspended, until the court rules on the validity of marriage; that if petitioner's
marriage is declared void by reason of psychological incapacity then by reason of the
arguments submitted in the subject petition, his marriage has never existed; and that,
accordingly, petitioner could not be convicted in the criminal case because he was
never before a married man. BYRON PEREZ
Page 349 of 528
315 Mercado vs. Tan| Panganiban
GR 137110, August 1, 2000 |
FACTS
• Vincent Mercado and Consuelo Tan got married on June 27,1991. At that point
however, we was still legally married to Theresa Oliva with whom he had been
married since 1976.
• On October 1992, Tan filed a complaint for Bigamy against Mercado and the case
was filed on March 1993. On Nov 1992, Mercado filed a declaration of nullity of
void marriage against Oliva which was granted in May 1993.
ISSUES & ARGUMENTS

• W/N Mercado was guilty of Bigamy
• W/N Tan can claim damages and Attorney’s Fees
Yes
• The elements are: 1.That the offender has been legally married; 2. That the marriage
has not been legally dissolved or, in case his or her spouse is absent, the absent
spouse could not yet be presumed dead according to the Civil Code; 3. That he
contracts a second or subsequent marriage; 4. That the second or subsequent
marriage has all the essential requisites for validity. All 4 were present at the time
the information was filed
• The subsequent declaration of void marriage does not cure the charge of bigamy.
The previous case of Mendoza vs. Aragon which said that the bigamy case would no
longer prosper if the prior marriage was declared void ab initio was been overturned
by Article 40 of the Family Code.
No
• Prior to contracting the marriage, Tan knew that Mercado was previously married
and had 2 kids. The fact that she entered into the marriage anyway cannot give rise
to a claim for damages as it was through her own conscious decision to marry
Mercado. That her reputation was later besmirched is her problem.
JAN PORTER
Page 350 of 528

316 Marbella-Bobis v. Bobis | Ynares-Santiago • Art. 40 of the FC requires prior judicial declaration of nullity of a previous marriage
G.R. 138509, July 31, 2000 before a party may remarry. It is not for the parties to determine the validity of the
marriage. Whether or not the first marriage was void for lack of a license is a matter
FACTS of defense because there is still no judicial declaration of its nullity at the time the
second marriage was contracted. It should be remembered that bigamy can
• On October 21, 1985, respondent contracted a first marriage with Maria Dulce successfully be prosecuted provided all its elements concur – two of which are a
Javier. Without said marriage having been annulled, nullified or terminated, previous marriage and a subsequent marriage which would have been valid had it
respondent contracted a second marriage with petitioner on January 25, 1996 and not been for the existence at the material time of the first marriage.
allegedly a third marriage with a certain Julia Sally Hernandez. • Respondent’s clear intent is to obtain a judicial declaration of nullity of his first
• An information for bigamy was filed based on petitioner’s complaint-affidavit on marriage and thereafter to invoke that very same judgment to prevent his
Feb. 1998. Thereafter, respondent initiated an action for declaration of nullity of prosecution for bigamy. He cannot have his cake and eat it too. Otherwise, all that
the first marriage on the ground of lack of marriage license. He then filed a motion an adventurous bigamist has to do is to disregard Article 40 of the Family Code,
to suspend the criminal proceeding on the ground that the civil case for nullity of contract a subsequent marriage and escape a bigamy charge by simply claiming that
the first marriage was a prejudicial question to the criminal case. the first marriage is void and that the subsequent marriage is equally void for lack of
• TC granted motion. Petitioner moved to reconsider but was denied. a prior judicial declaration of nullity of the first.
• A marriage though void still needs a judicial declaration of such fact before any
ISSUES & ARGUMENTS party can marry again; otherwise the second marriage will also be void. Without a
judicial declaration of its nullity, the first marriage is presumed to be subsisting. In
• W/N subsequent filing of civil action for declaration of nullity of previous
the case at bar, respondent was for all legal intents and purposes regarded as a
marriage constitutes prejudicial question to criminal case for bigamy.
married man at the time he contracted his second marriage with petitioner. Against
this legal backdrop, any decision in the civil action for nullity would not erase the
fact that respondent entered into a second marriage during the subsistence of a first
marriage. Thus, a decision in the civil case is not essential to the determination of
• No. A prejudicial question is one which arises in a case the resolution of which is a the criminal charge. It is, therefore, not a prejudicial question. As stated above,
logical antecedent of the issue involved therein. It is a question based on a fact respondent cannot be permitted to use his own malfeasance to defeat the criminal
distinct and separate from the crime but so intimately connected with it that it action against him.
determines the guilt or innocence of the accused. It must appear not only that the
civil case involves facts upon which the criminal action is based, but also that the
resolution of the issues raised in the civil action would necessarily be determinative
of the criminal case. The defense must involve an issue similar or intimately related
to the same issue raised in the criminal action and its resolution determinative of
whether or not the latter action may proceed.
• It’s elements are:
o the civil action involves an issue similar or intimately related to the
issue raised in the criminal action; and
o the resolution of such issue determines whether or not the criminal
action may proceed.
• It does not conclusively resolve the guilt or innocence of the accused but simply
tests the sufficiency of the allegations in the information in order to sustain the
further prosecution of the criminal case.
• A party who raises a prejudicial question is deemed to have hypothetically admitted
that all the essential elements of a crime have been adequately alleged in the
information. A challenge of the allegations in the information on the ground of
prejudicial question is in effect a question on the merits of the criminal charge
through a non-criminal suit. AYEN QUA
Page 351 of 528

317 First Producers Holding Corporation v. Luis Co | Panganiban • The trial court resolve the question of ownership in its own tribunal as there is no
G.R. No. 139655. July 27, 2000| law or rule that prohibits the court from doing do. The trial court has jurisdiction to
hear this defense.
FACTS • Rule 111 Section 5 states the elements of a Prejudicial Question
• Producers Bank of the Philippines adopted a resolution to buy 3 shares in Manila o The civil action involves an issue similar or intimately related to the issue
Polo Club. The shares were assigned to Co Bun Chun, Henry Co, and Luis Co. raised in the criminal action
• When Luis Co resigned from Producers Bank, the company asked Mr. Co to o The resolution of such issue determines whether or not the criminal action
transfer the said share to the newly elected assignee, Mrs. Bautista. There were may proceed.
several requests but Mr. Co refused to assign the shares to her. • Rule 111 Section 6 states, “When the criminal action has been filed in court for trial,
• Mr Co subsequently went to the General Manager of Manila Polo Club and the petition to suspend shall be filed in the same criminal action at any time before
submitted an Affidavit of Loss for the Certificate, making it appear that he was the the prosecution rests”
legitimate owner of the subject share. • Justice Panganiban in his decision declares, “A criminal proceeding, as a rule, may be
• The original certificates are all with in the possession of the corporation, including suspended upon a showing that a prejudicial question determinative of the guilt or
that which was assigned to Mr. Co. innocence of the accused is the very issue to be decided in a civil case pending in
• Upon the issuance of the new certificate, Producers Bank again demanded that the another tribunal. However, such suspension cannot be allowed if it is apparent that
certificate be assigned to Mrs. Bauitista. The value of the certificate is about 5.6M the civil action was filed as an afterthought for the purpose of delaying the ongoing
• A criminal case was filed against Mr. Co for estafa and perjury in March 1997. criminal action. This exception applies especially in cases in which the trial court
• On November 1997, Mr. Co filed a separate action, questioning the ownership of trying the criminal action has authority to decide such issue, and the civil action was
the Manila Polo Club proprietary share. instituted merely to delay the criminal proceeding and thereby multiply suits and vex
• The Court consequently suspended the criminal action, pursuant to Rule 111 of the the court system with unnecessary cases. Procedural rules should be construed to
Rules of Court. promote substantial justice, not to frustrate or delay its delivery.”
ISSUES & ARGUMENTS

• W/N the suspension of the criminal case by reason of a prejudicial question
was proper in this case.
o Petitioner: The Bank alleges that this was just a mere dilatory tactic and
such cannot be a valid reason to suspend the criminal proceedings.
o Respondent: Mr Co posits that the question of ownership is rightly raised
within the time provided for in the Rules of Court, “at the time before the
prosecution rests.” The question of ownership is intimately related to the
resolution of the criminal action of estafa, therefore it is a prejudicial
question that validly suspends the criminal action.
THE SUSPENSION IS INVALID. THE SEPARATE ACTION FILED TO

DETERMINE THE OWNERSHIP OF THE SHARE IS A MERE DILATORY
TACTIC.
• The criminal action was filed on March 1997 and it was only after 8 months that Mr.
Co decided to file a separate action to determine the ownership of the share. The
issue was raised as early as 1994. The filing of a separate action was clearly made as
an afterthought, and is considered a strategy to delay the criminal proceedings.
CHESKA RESPICIO
Page 352 of 528

318 Torres vs. Gatchalian | Callejo
G.R. No.153666, December 27, 2002 |
FACTS
• Susana Realty is the registered owner of two parcels of land in Cavite which are
adjacent to the sea and whose portions are submerged by seawater. It has a
caretaker named Domingo Fernandez
• 10/10/97: Mayor Torres of Noveleta,Cavite ordered the reclamation of
submerged area to use it as relocation site of displaced squatters over the
protests of the caretaker Fernandez
• 10/16/97 SRI gave the Mayor copies of their Title and surveys over the land
• 10/27/97 SRI sent a letter to the Mayor formally protesting the reclamation
and demanding that he desist
• 10/31/97 the Mayor and SRI representatives had a conference. The Mayor
offered to help SRI with its other projects in Cavite provided it will not file a
case to enjoin the reclamation. SRI requested that the reclamation be deffered
but it learned that five squatter families were already occupying the property.
• SRI filed a petition for injunctive relief to enjoin a reclamation and leveling of
the property. It also filed a criminal complaint with the ombudsman against
Mayor Torres for violation of RA 3019. After preliminary investigation,
ombudsman found probable cause.
• 9/1/98 The Republic filed a case in the RTC for the reversion of the said
property against the SRI and RoD of Cavite alleging the land is part of Manila
Bay and is land of public domain
• Torres filed a motion for suspension of proceedings with the Sandiganbayan
with regard to his criminal case in light of the prejudicial question which arose
due to the civil case. The Sandiganbayan issued a resolution denying the
motion.
• Torres filed a Petition for Certiorari to nullify the Sandiganbayan Resolution
which the court dismissed.Torres again filed a Motion to Suspend proceedings
with the Sandiganbayan on ground of a prejudicial question but the same was
denied. Torres was arraigned and entered a not guilty plea.
ISSUES & ARGUMENTS
• W/N The public respondent committed a grave abuse of discretion in
denying the Motion to suspend proceedings
No.
• In order that there be a prejudicial question, the civil case must be instituted prior to
the criminal action. In this case, the information was filed with the Sandiganbayan
prior to the filing of the civil case.
DEANNE REYES
Page 353 of 528

319 People of the Philippines vs. Consing | YNARES-SANTIAGO, J.:
G.R. No. 148193 January 16, 2003| • Even if respondent is declared merely an agent of his mother in the transaction
involving the sale of the questioned lot, he cannot be adjudged free from criminal
FACTS liability. An agent or any person may be held liable for conspiring to falsify public
• Plus Builders Inc. (PBI) purchased from Consing (respondent) and his mother Cruz documents. Hence, the determination of the issue involved in the case for Injunctive
a lot relying on the latter's representation that he and his mother are the true and Relief is irrelevant to the guilt or innocence of the respondent in the criminal case
lawful owners of the lot. Consing further represented that that he and her mother for estafa through falsification of public document.
acquired it from Tan Teng and Yu.
• Also, the resolution of PBI's right to be paid damages and the purchase price of the
• PBI later discovered that Consing did not have a valid title over the said lot. Tan lot in question will not be determinative of the culpability of the respondent in the
Teng and Yu apparently never sold the lot to respondents. PBI was then ousted criminal case for even if PBI is held entitled to the return of the purchase price plus
possession of the lot by Tan Teng and Yu. Respondent then refused to return the damages, it does not ipso facto follow that respondent should be held guilty of
amount used by PBI for the purchase of the lot, despite verbal and written estafa through falsification of public document.
demands.
• In addition, neither is there a prejudicial question if the civil and the criminal action
• Respondent then filed a case for "injunctive relief" while, PBI filed against can, according to law, proceed independently of each other. Under Rule 111,
respondent and his mother a complaint for "Damages and Attachment". There was Section 3 of the Revised Rules on Criminal Procedure, in the cases provided in
also a criminal case subsequently filed against respondent and his mother, for estafa Articles 32, 33, 34 and 2176 of the Civil Code, the independent civil action may be
through falsification of public document. brought by the offended party. It shall proceed independently of the criminal action
and shall require only a preponderance of evidence. In no case, however, may the
• Respondent sought to defer arraignment on ground of prejudicial question, offended party recover damages twice for the same act or omission charged in the
specifically the pendency of the cases for "injunctive relief" and "damages and criminal action.
attachment." This was denied by the RTC.
• The case for Damages and Attachment on account of the alleged fraud committed
• The CA then ruled on petition for certiorari that there exists a prejudicial question. by respondent and his mother in selling the disputed lot to PBI is an independent
Hence, petitioner herein, People of the Philippines, represented by the Solicitor civil action under Article 33 of the Civil Code. As such, it will not operate as a
General, filed this case for petition for review under Rule 45. prejudicial question that will justify the suspension of the criminal case at bar.
ISSUE
Whether or not the pendency of the cases for "injunctive relief" and "damages
and attachment" is a prejudicial question which justifies the suspension of the
proceedings in the criminal case?
• The pendency of the cases is not a prejudicial question.
• There lies no prejudicial question that would justify the suspension of the
proceedings in the criminal case. The issue in the case for Injunctive Relief is
whether or not respondent merely acted as an agent of his mother, while in Civil
Case No. 99-95381, for Damages and Attachment, the question is whether
respondent and his mother are liable to pay damages and to return the amount paid
by PBI for the purchase of the disputed lot. JR RUIZ
Page 354 of 528

320 Bantoto v. Bobis | JBL Reyes committed by their servants, pupils, workmen, apprentices, or employees in the
G.R. No. L-18966 November 22, 1966 discharge of their duties.
FACTS  The insolvency of the servant or employee is nowhere mentioned in said article
as a condition precedent. In truth, such insolvency is required only when the
 Crispin Vallejo was the registered owner of a "jeepney" named "Jovil 11", with plate liability of the master is being made effective by execution levy, but not for the
TPU-20948, that was operated by him in Bacolod City through driver Salvador rendition of judgment against the master.
Bobis.  The subsidiary character of the employer's responsibility merely imports that
 On 24 October 1948, through the driver's negligence, the "jeepney" struck a 3-year the latter's property is not be seized without first exhausting that of the servant..
old girl, Damiana Bantoto, inflicting serious injuries that led to her death a few days  Marquez v. Castillo cannot hold because it is a mere obiter.
later.
 The City Fiscal of Bacolod filed an information charging Bobis with homicide
through reckless imprudence, to which Bobis pleaded guilty. He was, accordingly,
sentenced to 2 months and 1 day of arresto mayor and to indemnify the deceased
girl's heirs (appellees herein) in the sum of P3,000.00.
 Batoto now was asking in his amended complaint that Crispin Vallejo be colodarily
liable for damages, consisting of the civil indemnity required of the driver Bobis in
the judgment of conviction, plus moral and exemplary damages and attorneys' fees
and costs.
ISSUES & ARGUMENTS
W/N Vallejo is solidarily liable with Bobis, even if it was not stated that Bobis was
insolvent.
o Petitioner: Batoto posits that Vallejo is liable under art 103 of the RPC.
o Respondent: The subsidiary liability of the master, according to the
provisions of Article 103 of the Revised Penal Code, arises and takes place
only when the servant, subordinate, or employee commits a punishable
criminal act while in the actual performance of his ordinary duties and
service, and he is insolvent thereby rendering him incapable of satisfying
by himself his own civil liability, since the complaint did not aver that
Bobis was insolvent, then the complaint must be dismisse (citing Marquez v.
Castillo)
VALLEJO IS LIABLE
 The master's liability, under the Revised Penal Code, for the crimes committed
by his servants and employees in the discharge of their duties, is not predicated
upon the insolvency of the latter. Article 103 of the Penal Code prescribes that:
ART. 103. Subsidiary civil liability of other persons. — The subsidiary liability
established in the next preceding article shall also apply to employees, teachers,
CHESKA RESPICIO
persons, and corporations engaged in any kind of industry for felonies
Page 355 of 528
321 Dionisio Carpio v. Doroja | Paras
G.R. No. 84516, Dec. 5. 1989|
FACTS
The subsidiary liability in Art. 103 should be distinguished from the primary liability of
Sometime on October 23, 1985, accused-respondent Edwin Ramirez, while driving a employers, which is quasi-delictual in character as provided in Art. 2180 of the New Civil
passenger Fuso Jitney owned and operated by Eduardo Toribio, bumped Dionisio Code. Under Art. 103, the liability emanated from a delict. On the other hand, the
Carpio, a pedestrian crossing the street, as a consequence of which the latter suffered liability under Art. 2180 is founded on culpa-aquiliana. The present case is neither an
from a fractured left clavicle as reflected in the medico-legal certificate and sustained action for culpa-contractual nor for culpa-aquiliana. This is basically an action to enforce
injuries which required medical attention for a period of (3) three months. the civil liability arising from crime under Art. 100 of the Revised Penal Code. In no case
can this be regarded as a civil action for the primary liability of the employer under Art.
An information for Reckless Imprudence Resulting to Serious Physical Injuries was filed 2180 of the New Civil Code, i.e., action for culpa-aquiliana.
against Edwin Ramirez with the Municipal Trial Court of Zamboanga City, Branch IV.
On January 14, 1987, the accused voluntarily pleaded guilty to a lesser offense and was In order that an employer may be held subsidiarily liable for the employee's civil liability
accordingly convicted for Reckless Imprudence Resulting to Less Serious Physical in the criminal action, it should be shown (1) that the employer, etc. is engaged in any
Injuries under an amended information punishable under Article 365 of the Revised kind of industry, (2) that the employee committed the offense in the discharge of his
Penal Code. duties and (3) that he is insolvent (Basa Marketing Corp. v. Bolinao, 117 SCRA 156). The
subsidiary liability of the employer, however, arises only after conviction of the employee
At the early stage of the trial, the private prosecutor manifested his desire to present in the criminal action. All these requisites are present, the employer becomes ipso facto
evidence to establish the civil liability of either the accused driver or the owner-operator subsidiarily liable upon the employee's conviction and upon proof of the latter's
of the vehicle. Accused's counsel moved that the court summon the owner of the vehicle insolvency. Needless to say, the case at bar satisfies all these requirements.
to afford the latter a day in court, on the ground that the accused is not only indigent but
also jobless and thus cannot answer any civil liability that may be imposed upon him by
the court. The private prosecutor, however, did not move for the appearance of Eduardo
Toribio.
Thereafter, a writ of execution dated March 10, 1988 was duly served upon the accused
but was, however, returned unsatisfied due to the insolvency of the accused as shown by
the sheriffs return. Thus, complainant moved for a subsidiary writ of execution against
the subsidiary liability of the owner-operator of the vehicle. The same was denied by the
trial court on two grounds, namely, the decision of the appellate court made no mention
of the subsidiary liability of Eduardo Toribio, and the nature of the accident falls under
"culpa-aquiliana" and not culpa-contractual." A motion for reconsideration of the said
order was disallowed for the reason that complainant having failed to raise the matter of
subsidiary liability with the appellate court, said court rendered its decision which has
become final and executory and the trial court has no power to alter or modify such
decision.
ISSUES & ARGUMENTS

• Whether the subsidiary liability of the owner-operator may be enforced in the same
criminal proceeding against the driver where the award was given, or in a separate
civil action
DIKKI SIAN
Page 356 of 528

322 Yonaha Vs. Court of Appeals| Vitug
G.R. No. 112346. March 29, 1996| 255 SCRA 397
ISSUES & ARGUMENTS
FACTS • W/N petitioner should be held liable for subsidiary liability under Art 103 of
• Elmer Ouano was charged with the crime of “Reckless Imprudence Resulting In RPC
Homicide”. The incident was laid out in his Information17.
• When arraigned, the accused pleaded “guilty”. Taking into account the mitigating HOLDING & RATIO DECIDENDI
circumstances of voluntary surrender and his plea of guilty, the court held him to
suffer and undergo an imprisonment of 1 year and 1 day to 1 year and 8 months and NO, PETITIONER MUST BE GIVEN DAY IN COURT AS A MATTER OF
to pay the heirs of the victim the sum of P50,000.00 for the death of the victim; DUE PROCESS FIRST.
P30,000.00 for actual damages incurred in connection with the burial and the nightly • The statutory basis for an employer’s subsidiary liability is found in Article 103 of
prayer of the deceased victim and P10,000.00 as attorney’s fees. the Revised Penal Code. This Court has since sanctioned the enforcement of this
• A writ of execution was issued for the satisfaction of the monetary award. In his subsidiary liability in the same criminal proceedings in which the employee is
Return of Service, dated 07 May 1992, the MTCC Deputy City Sheriff stated that he adjudged guilty, on the thesis that it really is a part of, and merely an incident in, the
had served the writ on accused Elmer Ouano but that the latter had manifested his execution process of the judgment. But, execution against the employer must not
inability to pay the money obligation. issue as just a matter of course, and it behooves the court, as a measure of due
• Forthwith, private respondents presented a “motion for subsidiary execution” with process to the employer, to determine and resolve a priori, in a hearing set for the
neither a notice of hearing nor notice to petitioner. Acting on the motion, purpose, the legal applicability and propriety of the employer’s liability. The
nevertheless, the trial court issued an order, dated 29 May 1992, directing the requirement is mandatory even when it appears prima facie that execution against the
issuance of a writ of subsidiary execution. The sheriff went to petitioner’s residence convicted employee cannot be satisfied. The court must convince itself that the
to enforce the writ, and it was then, allegedly for the first time, that petitioner was convicted employee is in truth in the employ of the employer; that the latter is
informed of Ouano’s conviction. Petitioner filed a motion to stay and to recall the engaged in an industry of some kind; that the employee has committed the crime to
subsidiary writ of execution principally anchored on the lack of prior notice to her which civil liability attaches while in the performance of his duties as such; and that
and on the fact that the employer’s liability had yet to be established. Private execution against the employee is unsuccessful by reason of insolvency.
respondents opposed the motion. • The assumption that, since petitioner in this case did not aver any exculpatory facts
• On 24 August 1992, the trial court denied petitioner’s motion. On 23 September in her “motion to stay and recall,” as well as in her motion for reconsideration,
1992, petitioner’s plea for reconsideration of the denial was likewise rejected. which could save her from liability, a hearing would be a futile and a sheer rigmarole
• Petitioner promptly elevated the matter to the Court of Appeals (CA-GR SP No. is unacceptable. The employer must be given his full day in court.
29116) for review. The appellate court initially restrained the implementation of the • To repeat, the subsidiary liability of an employer under Article 103 of the Revised
assailed orders and issued a writ of preliminary injunction upon the filing of a Penal Code requires (a) the existence of an employer-employee relationship; (b) that
P10,000.00 bond. Ultimately, however, the appellate court, in its decision of 28 the employer is engaged in some kind of industry; (c) that the employee is adjudged
September 1993, dismissed the petition for lack of merit and thereby lifted the writ guilty of the wrongful act and found to have committed the offense in the discharge
of preliminary injunction. of his duties (not necessarily any offense he commits “while” in the discharge of
• In the instant appeal, petitioner additionally reminds the Court that Ouano’s such duties); and (d) that said employee is insolvent. The judgment of conviction of
conviction was not the result of a finding of proof beyond reasonable doubt the employee, of course, concludes the employer and the subsidiary liability may be
but from his spontaneous plea of guilt. enforced in the same criminal case, but to afford the employer due process, the
court should hear and decide that liability on the basis of the conditions
required therefor by law
17 Petitioner shall be given the right to a hearing on the motion for the issuance of a writ of subsidiary
“That on April 14, 1990, at or about 11:45 A.M., in Basak, Lapulapu City, Philippines, within the
execution filed by private respondents, and the case is REMANDED to the trial court for further
jurisdiction of this Honorable Court, the aforenamed accused, while driving a Toyota Tamaraw sporting
Plate No. GCX-237 duly registered in the name of Raul Cabahug and owned by EK SEA Products, did proceedings conformably with our foregoing opinion.
then and there unlawfully and feloniously maneuver and operate it in a negligent and reckless manner,
without taking the necessary precaution to avoid injuries to person and damage to property, as a result FRANK TAMARGO
thereof the motor vehicle he was then driving bumped and hit Hector Cañete, which caused the latter’s
instantaneous death, due to the multiple severe traumatic injuries at different parts of his body.”
Page 357 of 528
323 Basilio vs Court of Appeals | Quisumbing 2) that the employer is engaged in some kind of industry
G.R. No.113433 17 March 2000|
3) that the employee is adjudged guilty of the wrongful act and found to have committed
FACTS the offense in the discharge of his duties (not necessarily any offense he commits while
in the discharge of such duties) and
• On July 23, 1987, Simplicio Pronebo was charged by the Provincial Fiscal of Rizal
with the crime of Reckless imprudence resulting to damage to property with double 4) that said employee is insolvent.
momicide and double physical injuries.
• Simplicio Pronebo was the driver of a dump truck with plate number NMW 609
owned and registered under the name of Luisito Basilio. The said driver operated There are two instances when the existence of an employer-employee relationship of an
the truck without due regard to traffic laws, rules and regulations and without taking accused driver and the alleged vehicle owner may be determined. One during the
the necessary care and precaution to prevent damage to property and avoid injuries criminal proceeding, and the other, during the proceeding for the execution of the
to persons. judgment. In both instances, petitioner should be given the opportunity to be heard,
• As a result of which said dump truck hit and sideswiped a motorized tricycle, which is the essence of due process.
Toyota Corona, motorized tricycle, Mitsubishi Lancer and a Ford Econo Van.
• After arraignment and trial, the court rendered judgment convicting the driver. The Petitioner knew of the criminal case that was filed against the accused because it was his
trial court also found out that Pronebo was an employee of Luisito Basilio. truck that was involved in the incident. Further, it was the insurance company, with
• Pronebo applied for probation so that the above judgement will become final and which his truck was insured, that provided the counsel for the accused, pursuant to the
executory. stipulations in their contract.
• On March 27, 1991, Luisito Basilio filed with the trial court a Special Appearance
and Motion for Reconsideration to set aside the judgement rendered last February 4,
1991. He said that it affected him and subjected him to subsidiary liability for the
civil aspect of the criminal case. This motion was denied for lack of merit.
• On September 23, 1991, private respondent filed a motion for execution of the
subsidiary liability of petitioner Basilio.
ISSUES & ARGUMENTS
Whether the CA erred in holding that the petitioner is neither an accused or a party in
criminal case and he is not entitled to file a motion for reconsideration of the judgment
of Subsidiary Civil Liability against him?
NO.
The statutory basis for an employer’s subsidiary liability is found in Article 103 of the
Revised penal Code. This liability is enforceable in the same criminal proceeding where
the award is made.
However, before execution against an employer ensues, there must be a determination ,

in a hearing set for the purpose of
1) the existence of an employer-employee relationship

SATURDAY ALCISIO
Page 358 of 528

324 Pepe and Auriliana Catacutan vs. Heirs of Kadusale | Ynares-Santiago issued an order suspending the execution of the writ dated 24 October 1980 and as well
GR No. 131280. October 18, 2000 granted petitioners until 5 November 1980 within which to file their comment and/or
opposition to the Motion for Issuance of the Writ of Subsidiary Execution. On 4 November
Topic: 1980, petitioners filed their Motion for Reconsideration of the order of 24 October 1980
Subsidiary Liability (Articles 102-103, Revised Penal Code) and To Set Aside Subsidiary Writ of Execution. This was opposed by private respondent.
On 21 November 1980, an order of denial of the Motion dated 4 November 1980 was
FACTS issued. A second motion for reconsideration was filed by petitioners which were again opposed
• Petitioner Aureliana Catacutan is the registered owner and operator of a jeepney, by private respondent. Petitioners filed their reply thereto. Acting on the pleadings, respondent
driven by the accused Porferio Vendiola, which bumped a tricycle on April 11, 1991, judge issued a resolution denying petitioners' second motion for reconsideration.)
in Banilad, Bacong, Negros Oriental, thereby causing the death of its driver, • In the instant case, we find no reason why the subsidiary writ of execution
Norman Kadusale, and its passenger, Lito Amancio, and serious physical injuries to issued against petitioner Aureliana Catacutan should be set aside. To begin
another passenger, respondent Gil B. Izon. with, as in Yusay and Basilio, petitioners cannot complain of having been
• Respondents thus filed a criminal case against Porferio Vendiola, for Reckless deprived of their day in court. They were duly furnished a copy of
Imprudence Resulting in Double Homicide with Physical Injuries and Damages to respondents' Motion for Subsidiary Writ of Execution to which they filed their
Property on July 26, 1991, before the Regional Trial Court of Negros Oriental. Opposition.
• On December 1, 1995, the trial court rendered judgment in favor of the private So, too, we find no good ground to order a separate hearing to determine the
respondents convicting the accused and sentenced to proper penalties under the law subsidiary liability of petitioner Aureliana Catacutan, as was ordered in the case
and awarded damages to the victims. The accused did not appeal conviction but of Pajarito v. Señeris: to do so would entail a waste of both time and resources of
instead applied for probation. The judgment became final and executory, the trial court as the requisites for the attachment of the subsidiary liability of
respondents moved for the issuance of a writ of execution and the corresponding the employer have already been established, to wit: First, the existence of an
writ was issued however, per the Sheriff's Return of Service, the writ was unsatisfied employer-employee relationship. Second, the employer is engaged in some kind
as the accused had "nothing to pay off the damages in the decision." Hence on of industry, land transportation industry in this case as the jeep driven by
August 28, 1996, respondents filed a Motion for Subsidiary Writ of Execution accused was admittedly a passenger jeep. Third, the employee has already been
praying that such writ be issued against petitioner Aureliana Catacutan as registered adjudged guilty of the wrongful act and found to have committed the offense in
owner and operator of the jeepney driven by the accused when the collision the discharge of his duties. Finally, said employee is insolvent. This, in
occurred. Petitioner Aureliana Catacutan then filed her Opposition thereto, arguing connection to the statutory basis for an employer's subsidiary liability as found
that she was never a party to the case and that to proceed against her would be in in Article 103 of the Revised Penal Code. This liability is enforceable in the
violation of the due process clause of the Constitution. Petitioner also argued that same criminal proceeding where the award is made. (Rules of Court, Rule 111,
the subsidiary liability of the employer is not determined in the criminal case against Sec. 1
the employee.
ISSUE PETITION IS DENIED.
WHETHER OR NOT A SUBSIDIARY WRIT OF EXECUTION MAY

ISSUE AGAINST THE EMPLOYERS OF AN ACCUSED, AGAINST
WHOM A JUDGMENT OF CONVICTION HAD BEEN ENTERED,
EVEN WHEN SAID EMPLOYERS NEVER TOOK PART IN THE
CRIMINAL PROCEEDINGS WHERE THE ACCUSED WAS CHARGED,
TRIED AND CONVICTED.

The subsidiary liability of the employer is entrenched in our criminal law and jurisprudence.
Moreover, petitioner was given ample opportunity to be heard.
• Petitioners were given ample opportunity to present their side: (The Lower Court
JOY ADRANEDA
admitted their "Urgent Ex Parte Motion for Time to File Necessary Pleadings” and also
Page 359 of 528
325 International Flavors and Fragrances (Phil.), Inc. vs. Argos| Quisumbing • The prayer of the complaint reads: “WHEREFORE, it is respectfully prayed that after
G.R. No. 130362, September 10, 2001 | hearing, this Honorable Court renders judgment against the defendant, Hernan H. Costa and/or
against defendant International Flavors and Fragrances (Phil.), Inc., in its subsidiary capacity
FACTS (subsidiary liability) as an employer...”
• Petitioner International Flavors and Fragrances (Phils.) Inc., hereafter IFFI, is a • Nothing could be clearer than that herein respondents are suing IFFI civilly in its
corporation organized and existing under Philippine laws. Respondents Merlin J. subsidiary capacity for Costa’s alleged defamatory acts. Moreover, the appellate
Argos and Jaja C. Pineda are the general manager and commercial director, court could not convert allegations of subsidiary liability to read as averments of
respectively, of the Fragrances Division of IFFI. primary liability without committing a fundamental unfairness to the adverse party.
• In 1992, the office of managing director was created to head the corporation’s • Article 33 of the Civil Code provides specifically that in cases of defamation, a civil
operation in the Philippines. Hernan H. Costa, a Spaniard, was appointed managing action for damages, entirely separate and distinct from the criminal action, may be
director. Costa and respondents had serious differences. When the positions of the brought by the injured party. Such civil action proceeds independently of the
general managers became redundant, respondents agreed to the termination of their criminal prosecution and requires only a preponderance of evidence. It does not
services. They signed a “Release, Waiver and Quitclaim” on December 10, 1993. apply to an action against the employer to enforce its subsidiary civil liability,
On the same date, Costa issued a “Personnel Announcement” which described because such liability arises only after conviction of the employee in the
respondents as “persona non grata” and urged employees not to have further dealings criminal case or when the employee is adjudged guilty of the wrongful act in
with them. a criminal action and found to have committed the offense in the discharge
• Thereafter, respondents filed a criminal complaint for libel against Costa. They also of his duties. Any action brought against the employer based on its subsidiary
filed a civil case for against Costa and IFFI, in its subsidiary capacity as employer. liability before the conviction of its employee is premature.
Herein petitioner IFFI moved to dismiss the complaint. • Respondents did not base their civil action on petitioner IFFI’s primary liability
• under Art. 33 but claimed damages from IFFI based on its subsidiary liability as
ISSUES & ARGUMENTS employer of Costa, prematurely.
W/N PRIVATE RESPONDENTS CAN SUE PETITIONER FOR DAMAGES

BASED ON SUBSIDIARY LIABILITY IN AN INDEPENDENT CIVIL
ACTION UNDER ART. 33 DURING THE PENDENCY OF THE CRIMINAL
LIBEL CASE AGAINST ITS EMPLOYEE?
NO, RESPONDENTS’ SUIT BASED ON SUBSIDIARY LIABILITY IS

PREMATURE
• Petitioner avers that the Court of Appeals erred when it treated said complaint as
one to enforce petitioner’s primary liability under Article 33 of the Civil Code. It
asserts that in so doing the appellate court introduced a new cause of action not
alleged nor prayed for in respondents’ complaint. Petitioner argues that a cause of
action is determined by the allegations and prayer in a complaint. Respondents in
their complaint did not allege that IFFI was primarily liable for damages. On
the contrary, petitioner says the complaint was replete with references that
IFFI was being sued in its subsidiary capacity.
• The well-established rule is that the allegations in the complaint and the character of
the relief sought determine the nature of an action. A perusal of the respondents’
civil complaint before the regional trial court plainly shows that respondents is suing
IFFI in a subsidiary and not primary capacity insofar as the damages claimed are
concerned. BON ARCILLA
Page 360 of 528

326 Arambulo vs. Manila Electric Co. | Villa-Real
No. 33229, October 23, 1930 | 55 PHIL 75
FACTS
• Two policeman who were standing on the front platform of car No. 130 (then 20
meters from the corner of Ylaya and Raxa Matanda Sts. Tondo), beside the
motorman (Simeon Marzo) and a student-motorman (the one driving), caught sight
of Basilisa Pacheco (aged mother of plaintiff), stepping off the curb at the corner to
cross Ylaya St. The student-motorman drove 35-40 kph and did not slacken speed
until the danger was imminent and could not be averted. When the car came within
5 meters of the old woman, who had by that time reached the tracks, the regular
motorman seized the hand gear from the student, applied the brakes and switched
on to reverse, causing the electric box overhead to explode. Notwithstanding all
these emergency measures, the car hit the woman, throwing her to the ground. She
was taken to the hospital where she died 8 days thereafter.
• The motorman referred to was in charge of one of the electric streetcars belonging
to defendant Manila Electric. After was charged with homicide by simple negligence,
and sentenced to pay the heirs of the deceased P1000, Manila Electric was then held
subsidiarily liable for damages.
ISSUES & ARGUMENTS

• W/N Manila Electric is liable to pay damages to Arambulo.
Defendant: It is exempt from civil liability. It has used all the diligence of a
good father of a family to prevent the accident, taking every precaution to assure itself
that the motorman Marzo was careful, experienced and skillful in running the car to be
entrusted to him before doing so.
MANILA ELECTRIC CO. LIABLE TO PAY DAMAGES. HOWEVER, ITS

SUBSIDIARY CIVIL LIABILITY CAN IN NO CASE EXCEED THAT OF
THE PRINCIPAL CIVIL LIABILITY.
• The exemption from civil liability established in Art. 1903 of the Civil Code for all
who have acted with the diligence of a good father of a family, is not applicable to
the subsidiary civil liability provided in Art. 20 of the Penal Code.
Judgment appealed from MODIFIED. Defendant Manila Electric Company is required to pay
plaintiff Arambulo P1,000 indemnity, with legal interest from the promulgation hereof.
DANI BOLONG
Page 361 of 528

327 Yumul vs. Juliano and Pampanga Bus Co. | Laurel
G.R. No. 47690, April 28, 1941 | 72 Phil. 94
FACTS
• Teresita Yumul was struck by a truck of the Pampanga Bus Co., as it was being
driven by Juliano.
• Juliano was prosecuted and convicted of homicide through reckless imprudence.
However, no pronouncement was made as to the civil liability since the private
prosecution reserved its right to file a separate action.
• Juliano was declared in default, and the CFI sentenced him to pay P2,000.00, but
absolved Pampanga Bus Co. on the ground that it is exempted from responsibility
under Articles 1903 of the Civil Code, since it appears that it exercised all the
diligence of a good father of a family to prevent the damage.
• Upon appeal to the CA, the case was certified to this court, it involving only a
question of law.
ISSUES & ARGUMENTS

• W/N Pampanga Bus Co. can be held subsidiarily liable for damages in the
event that Juliano is found to be insolvent.
PAMPANGA BUS CO. SUBSIDIARILY LIABLE TO YUMUL.
• Article 1902 provides: “Civil obligations arising from crimes and misdemeanors shall
be governed by the provisions of the Penal Code.”
• The lower court should have applied Articles 10218 and 10319 to the case at bar.
• While it is true that Article 1903 provides that the subsidiary liability shall cease in
case the persons mentioned prove that they exercised all the diligence of a good
father of a family to prevent the damage,” such liability refers to fault or negligence
not punishable by law.
• It is admitted by Pampanga Bus Co. that Juliano was its employee and the chauffeur
of its truck. It follows then that Pampanga Bus Co. is subsidiarily liable for the
damages caused by the said Juliano under the provisions of the Articles 102 and 103
of the RPC, and it is no defense for the Pampanga Bus Co. to allege or prove
that it exercised all the diligence of a good father of a family in the
employment and training of Juliano in order to prevent the damage.
Decision MODIFIED.
18
19 CHRISSIE MORAL
Page 362 of 528

328 Connel Bros. vs. Aduna| Montemayor doubt is required, whereas in a purely civil action to recover the
G.R. No. L-4057 March 31, 1952 |SCRA same damages under Arts. 1902 and 1903 of the Civil Code, only
preponderance of the evidence is required.
FACTS  The court in that case held that the offended party seeking
o Defendant Francisco Aduna, employed as chauffeur by his co-defendant, Ex- damages has the right to choose between a criminal action and a
Meralco Employees Transportation Company, while driving his co-defendant's civil suit.
passenger buss on F.B. Harrison Street, Rizal City bumped and hit an old mobile car o Connel Bros.:
owned by plaintiff Connel Bros. Company (Phil.). o At the time of the collision, on the back of Francisco Aduna's driver's
o As a result of the collision the automobile fell into a canal and was damaged, Esther license appear three entries of penalties and warnings.
P. Boomer and Myrna Nichol who were then passengers in the said car sustained o TC:
physical injuries which necessitated hospitalization and medical care. o The act of reckless negligence of Aduna causing the damage, is governed
o Francisco Aduna was prosecuted and convicted of damage to property and serious by Art. 109222 of the Civil Code.
physical injuries thru reckless imprudence and had served his prison sentence.  Arts. 102 and 103 of the Revised Penal Code which provides for
o At the trial of said criminal case the Connel Bros. reserved their right to file the the subsidiary liability of the employer for felonies committed by
corresponding civil suit for damages. In pursuance of said reservation the present his servants or employees in the discharge of their duties, should
civil action was filed in the lower court to recover damages caused by the criminal be applied.
negligence committed by defendant Aduna.  Arambulo vs. Manila Electric Co:
o Ex-Meralco Employees Transportation Company: • The Electric Company was sued on the basis of its
o In carrying out its business, they had been following the same practices and subsidiary liability, and said Electric Company was not
procedure employed by the Manila Electric Company (MERALCO) in allowed to prove and invoke the employment of the
exercising due diligence in hiring and supervising its employees diligence of a good father of a family to prevent the
o They had also scrutinized Aduna’s previous records as a driver accident by carefully selecting its employees.
o They have been carefully supervising the work of its employees in the field • Said defense is available not in cases covered by the
particularly its drivers and conductors penal code but only in those covered by the articles of
o The accident or collision subject-matter of this case is the first collision in the Civil Code such as Arts. 1903, 1902 and 1093
which a bus or an employee of them has been involved thereof.
o The present case was brought under the provisions of Arts. 190220 and 
190321, of the Civil Code. ISSUES & ARGUMENTS
o Barredo vs. Garcia and Almario: W/N the TC was correct in ruling that the negligence of Aduna causing the
 The Court in that case tried or sought to enlarge the field of tort damage is governed by Art. 1092, and not Arts. 1902 and 1903 of the Civil Code.
or culpa aquiliana, believing that the remedy provided by the penal
code for the recovery of damages by the party damaged is more
burdensome and difficult, particularly in the amount or extent of HOLDING & RATIO DECIDENDI
proof to establish his rights to damages, because to establish the
guilt of the offender guilty of negligence, proof beyond reasonable Yes. The TC was correct in ruling that the negligence of Aduna causing the
damage is governed by Art. 1092, and not Arts. 1902 and 1903 of the Civil Code.
20 Art. 1902. Any person who by an act or omission causes damage to another by his fault or negligence shall
be liable for the damage so done. • In Barredo vs. Garcia and Almario, the liability sought to be imposed upon the
21 Art. 1903. The obligation imposed by the next proceeding article is inforcible, not only for personal acts
employer in that case was not a civil obligation arising from a felony or
and omissions, but also for those of persons for whom another is responsible. misdemeanor (crime committed by Pedro Fontanilla) but an obligation imposed by
xxx xxx xxx
Owners or directors of an establishment or business are equally liable for any damages caused by their art. 1903 of the Civil Code because of his negligence in the selection and supervision
employees while engaged in the branch of the service in which employed, or on occasion of the performance of his servants or employees. In the present case, however, the plaintiffs have
of their duties.
xxx xxx xxx
The liability imposed by this article shall cease in case the persons mentioned therein prove that they 22 Art. 1092. Civil obligations arising from the crimes or misdemeanors shall be governed by the provisions
exercised all the diligence of a good father of a family to prevent the damage. of the Penal Code.
Page 363 of 528
chosen to rely upon the provisions of the Penal Code and have based their action
on the result of the criminal case against Francisco Aduna.
• In fact, no evidence to show the negligence of Aduna was submitted except his
conviction in the criminal case.
• Furthermore, both Aduna and his employer, the Ex-Meralco Employees
Transportation Company, were sued, whereas in the case of Barredo vs. Garcia, only
Barredo was sued.
NICO CRISOLOGO
Page 364 of 528

329 Nakpil vs CA, UNITED Construction, Juan A. Carlos and the Philippine Bar negligence of the parties in effecting the plans and designs is equivalent to bad
Association faith.
GR 128024, May 9, 2000/ Gonzaga-Reyes • When it comes to the five-fold increase in damages, the court said that during
the time when the commissioner gave out the rate of damages, wa 20 years
FACTS before this decision. He did not consider the subsequent earthquakes, nor the
• Plaintiff-appellant Philippine Bar Association (PBA for short) decided to tearing of the building.
construct an office building on its 840 square meters lot located at the corner
of Aduana and Arzobispo Streets, Intramuros, Manila. For the plans,
specifications and design, PBA contracted the services of third-party
defendants-appellants Juan F. Nakpil & Sons and Juan F. Nakpil (NAKPILS
for short). For the construction of the building, PBA contracted the services
of United Construction Company, Inc. (UNITED for short) on an
administration basis.
• On August 2, 1968, an unusually strong earthquake hit Manila and its environs
and the building in question sustained major damage. The front columns of
the building buckled causing the building to tilt forward dangerously. As a
temporary remedial measure, the building was shored up by UCCI at the
expense of P13,661.28.
• On November 29, 1968, PBA commenced this action for recovery of damages
against UCCI and its President and General Manager Juan J. Carlos, claiming
that the collapse of the building was caused by defects in the construction.
UNITED, in turn, filed a third-party complaint against the NAKPILS, alleging
in essence that the collapse of the building was due to the defects in the
architects" plans, specifications and design. Roman Ozaeta, the then President
of PBA, was included as a third-party defendant for damages for having
included Juan J. Carlos, President of UNITED as party defendant.
• PBA moved that the building be demolished but it was denied. When the
motion was finally granted, more earthquakes already hit it and caused more
damage
• The Commissioner found cause for damage the 3 parties, but the TC. CA, and
the SC agreed.
• Thus this MR
ISSUES & ARGUMENTS
Who should shoulder the damages resulting from the partial and the eventual
collapse of the building?
Nakpil and UNITED
• A party who negligently causes a dangerous condition cannot escape liability for
the natural and probable causes thereof, although the act of a 3rd person or God
for which he is not responsible, intervene to precipitate the cause. The wanton JOFI CUENCA
Page 365 of 528

330 Filinvest Credit vs. IAC | SARMIENTO, J
G.R. No. L-65935, September 30, 1988 | 166 SCRA 155 Plaintiff-appellee (respondent Sunga) did not appeal from the decision of the court a quo
which awarded him the sum of P30,000.00 by way of moral damages.
FACTS
• A case for damages was filed by Nestor B. Sunga Jr., a businessman and owner of Well settled is the rule in this jurisdiction that whenever an appeal is taken in a civil case,
the NBS Machineries Marketing and the NAP-NAP Transit. an appellee who has not himself appealed cannot obtain from the appellate court any
• Plaintiff alleged that he purchased a passenger minibus Mazda from the Motor affirmative relief other than the ones granted in the decision of the court below
center, Inc and for which he executed a promissory note to cover the amount of
P62,592.00 payable monthly in the amount of P2,608.00 for 24 months due and Verily the respondent court disregarded such a well settled rule when it increased the
payable the 1st day of each month starting May 1, 1978 thru and inclusive of May 1, award for moral damages from P30,000.00 to P50,000.00, notwithstanding the fact that
1980. the private respondent did not appeal from the judgment of the trial court.
• On the same date, however, a chattel mortgage was executed by him in favor of the
Motor center, Inc There is no dispute that the private respondent, a businessman and owner of the NBS
• The Chattel Mortgage and Assignment was assigned to the Filinvest Credit Machineries Marketing and NAP-NAP Transit, is entitled to moral damages due to the
Corporation with the conformity of the plaintiff. unwarranted seizure of the minibus Mazda, allegedly because he was delinquent in the
• Nestor Sunga claimed that on October 21, 1978, the minibus was seized by two (2) payment of its monthly amortizations, which as stated above, turned out to be incorrect
employees of the defendant Filinvest Credit Corporation upon orders of the branch
manager Mr. Gaspar de los Santos, without any receipt, who claimed that he was Such intent tainted private respondent Sunga's reputation in the business community,
delinquent in the payments of his vehicle. thus causing him mental anguish, serious anxiety, besmirched reputation, wounded
• The plaintiff reported the loss to the PC and after proper verification from the feelings, moral shock, and social humiliation.
office of the Filinvest, the said vehicle was recovered from the Crisologo
Compound which was later released by Rosario Fronda Assistant Manager of the Considering, however, that respondent Sunga was dispossessed of his motor vehicle for
Filinvest barely three days and possession of which was restored to him soon after the accounting
• The police blotter shows that Nestor Sunga sought the assistance of the Dagupan errors were ironed out, SC ruled that the award of moral damages even in the sum of
police and one Florence Onia of the Filinvest explained that the minibus was P30,000.00 is excessive for it must be emphasized that "damages are not intended to
confiscated because the balance was already past due. enrich the complainant at the expense of a defendant”.
• After verification that his accounts are all in order, Florence Onia admitted it was
their fault. The motor vehicle was returned to the plaintiff upon proper receipt. The award of moral damages is aimed at a restoration within the limits of the possible, of
• The court a quo rendered its decision ordering defendant Filinvest to pay the the spiritual status quo ante; and therefore it must be proportionate to the suffering
plaintiff Nestor Sunga Jr. the following damages, to wit: (a) Moral Damages inflicted.
P30,000.00(b) Loss on Income of the minibus for three days 600.00 (c) Actual
damages 500.00(d) Litigation expenses 5,000.00(e) Attorney's Fees 10,000.00 Therefore, petition is partially GRANTED. The award of moral damages is REDUCED
• IAC affirmed the same in toto except with regard to the moral damages which, to P10,000.00 and the grant of litigation expenses is ELIMINATED. The rest of the
under the circumstances of the accounting error incurred by Filinvest, was increased judgment is AFFIRMED.
from P30,000.00 to P50,000.00.
ISSUES & ARGUMENTS

• W/N respondent court erred in increasing the amount of moral damages
YES
TIN DINO
Respondent court committed a grave abuse of discretion in increasing extravagantly the
award of moral damages and in granting litigation expenses.
Page 366 of 528
331 Occena vs. Icamina | Fernan, C.J. (1) as an offense against the state because of the disturbance of the social order; and
G.R. No. 82146, January 22, 1990 | 181 SCRA 328 (2) as an offense against the private person injured by the crime unless it involves
the crime of treason, rebellion, espionage, contempt and others wherein no civil
FACTS liability arises on the part of the offender either because there are no damages to be
• On May 31, 1979, herein petitioner Eulogio Occena instituted before the Second compensated or there is no private person injured by the crime. 3 In the ultimate
Municipal Circuit Trial Court of Sibalom, San Remigio — Belison, Province of analysis, what gives rise to the civil liability is really the obligation of everyone to
Antique, Criminal Case No. 1717, a criminal complaint for Grave Oral Defamation repair or to make whole the damage caused to another by reason of his act or
against herein private respondent Cristina Vegafria for allegedly openly, publicly and omission, whether done intentional or negligently and whether or not punishable by
maliciously uttering the following insulting words and statements: "Gago ikaw nga law. 4
Barangay Captain, montisco, traidor, malugus, Hudas," which, freely translated, • Article 2219, par. (7) of the Civil Code allows the recovery of moral damages in case
mean: "You are a foolish Barangay Captain, ignoramus, traitor, tyrant, Judas" and of libel, slander or any other form of defamation This provision of law establishes
other words and statements of similar import which caused great and irreparable the right of an offended party in a case for oral defamation to recover from the
damage and injury to his person and honor. guilty party damages for injury to his feelings and reputation. The offended party is
• Private respondent as accused therein entered a plea of not guilty. Trial thereafter likewise allowed to recover punitive or exemplary damages.
ensued, at which petitioner, without reserving his right to file a separate civil action • It must be remembered that every defamatory imputation is presumed to be
for damages actively intervened thru a private prosecutor. malicious, even if it be true, if no good intention and justifiable motive for making it
• After trial, private respondent was convicted of the offense of Slight Oral is shown. And malice may be inferred from the style and tone of publication 5
Defamation and was sentenced to pay a fine of Fifty Pesos (P50.00) with subsidiary subject to certain exceptions which are not present in the case at bar.
imprisonment in case of insolvency and to pay the costs. No damages were awarded • Calling petitioner who was a barangay captain an ignoramus, traitor, tyrant and Judas
to petitioner in view of the trial court's opinion that "the facts and circumstances of is clearly an imputation of defects in petitioner's character sufficient to cause him
the case as adduced by the evidence do not warrant the awarding of moral embarrassment and social humiliation. Petitioner testified to the feelings of shame
damages." and anguish he suffered as a result of the incident complained of. 6 It is patently
• error for the trial court to overlook this vital piece of evidence and to conclude that
ISSUES & ARGUMENTS the "facts and circumstances of the case as adduced by the evidence do not warrant
• W/N the decision of the Second Municipal Trial Court of Sibalom, San-Remigio- the awarding of moral damages." Having misapprehended the facts, the trial court's
Belison, Province of Antique constitutes the final adjudication on the merits of findings with respect thereto is not conclusive upon us.
private respondent's civil liability; and • From the evidence presented, we rule that for the injury to his feelings and
• W/N petitioner is entitled to an award of damages arising from the remarks uttered reputation, being a barangay captain, petitioner is entitled to moral damages in the
by private respondent and found by the trial court to be defamatory. sum of P5,000.00 and a further sum of P5,000.00 as exemplary damages.
The decision of the Municipal Circuit Trial Court as affirmed by the Regional Trial Court
in Criminal Case No. 1709 cannot be considered as a final adjudication on the civil
liability of private respondent simply because said decision has not yet become final due
to the timely appeal filed by petitioner with respect to the civil liability of the accused in
said case. It was only the unappealed criminal aspect of the case which has become final.
• We tackle the second issue by determining the basis of civil liability arising from
crime. Civil obligations arising from criminal offenses are governed by Article 100 of
the Revised Penal Code which provides that "(E)very person criminally liable for a
felony is also civilly liable," in relation to Article 2177 of the Civil Code on quasi-
delict, the provisions for independent civil actions in the Chapter on Human
Relations and the provisions regulating damages, also found in the Civil Code.
• Underlying the legal principle that a person who is criminally liable is also civilly
liable is the view that from the standpoint of its effects, a crime has dual character: JAY DUHAYLONGSOD
Page 367 of 528

332 So Ping Bun v. CA| Quisimbing • On March 1, 1991, private respondent Tiong sent a letter to petitioner, which reads
GR No. 120554. September 21, 1999 as follows:
March 1, 1991
Topic: Dear Mr. So,
Interference in Contractual Relation (Under Article 1314, New Civil Code) Due to my closed (sic) business associate (sic) for three decades with your late
grandfather Mr. So Pek Giok and late father, Mr. So Chong Bon, I allowed you
Synopsis: temporarily to use the warehouse of Tek Hua Enterprising Corp. for several years to
Tek Hua Enterprises is the lessee of Dee C. Chuan & Sons, Inc. in the latter’s premises in generate your personal business.
Binondo but it was So Ping Bun who was occupying the same for his Trendsetter Marketing. Later, Mr. Since I decided to go back into textile business, I need a warehouse immediately for
Manuel Tiong asked So Ping Bun to vacate the premises but the batter refused and entered into formal my stocks. Therefore, please be advised to vacate all your stocks in Tek Hua
contracts of lease with DCCSI. In a suit for injunction, private respondents pressed for the nullification Enterprising Corp. Warehouse. You are hereby given 14 days to vacate the premises
of the lease contracts between DCCSI and petitioner, and for damages. The trial court ruled in favor of unless you have good reasons that you have the right to stay. Otherwise, I will be
private respondents and the same was affirmed by the Court of Appeals. constrained to take measure to protect my interest.
There was tort interference in the case at bar as petitioner deprived respondent corporation of the Please give this urgent matter your preferential attention to avoid inconvenience on
latter’s property right. However, nothing on record imputed malice on petitioner; thus, precluding your part.
damages. But although the extent of damages was not quantifiable, it does not relieve petitioner of the Very truly yours,
legal liability for entering into contracts and causing breach of existing ones. Hence, the Court confirmed (Sgd) Manuel C. Tiong
the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter • Petitioner refused to vacate. On March 4, 1992, petitioner requested formal
Marketing. contracts of lease with DCCSI in favor Trendsetter Marketing. So Ping Bun claimed
that after the death of his grandfather, So Pek Giok, he had been occupying the
FACTS: premises for his textile business and religiously paid rent. DCCSI acceded to
petitioner’s request. The lease contracts in favor of Trendsetter were executed.
• In 1963, Tek Hua Trading Co, through its managing partner, So Pek Giok, entered • In the suit for injunction, private respondents pressed for the nullification of the
into lease agreements with lessor Dee C. Chuan & Sons Inc. (DCCSI). Subjects of lease contracts between DCCSI and petitioner and as well prayed for damages. The
four (4) lease contracts were premises located at Soler Street, Binondo, Manila. Tek Trial Court ruled in their favor as upheld by the Court of Appeals.
Hua used the areas to store its textiles. The contracts each had a one-year term. ISSUE:
They provided that should the lessee continue to occupy the premises after the
term, the lease shall be on a month-to-month basis. WHETHER THE APPELLATE COURT ERRED IN AFFIRMING THE
• When the contracts expired, the parties did not renew the contracts, but Tek Hua TRIAL COURT’S DECISION FINDING SO PING BUN GUILTY OF
continued to occupy the premises. In 1976, Tek Hua Trading Co. was dissolved. TORTUOUS INTERFERENCE OF CONTRACT (Given that no award for
Later, the original members of Tek Hua Trading Co. including Manuel C. Tiong, damages were given to the private respondents)?
formed Tek Hua Enterprising Corp., herein respondent corporation.
• So Pek Giok, managing partner of Tek Hua Trading, died in 1986. So Pek Giok’s HOLDING & RATIO DECIDENDI
grandson, petitioner So Ping Bun, occupied the warehouse for his own textile
business, Trendsetter Marketing. PETITION IS DENIED.
• On August 1, 1989, lessor DCCSI sent letters addressed to Tek Hua Enterprises,
informing the latter of the 25% increase in rent effective September 1, 1989. The The CA did not err in its decision. There can still be tortuous interference despite no award
rent increase was later on reduced to 20% effective January 1, 1990, upon other for damages were given by the Court.
lessees’ demand. Again on December 1, 1990, the lessor implemented a 30% rent
increase. Enclosed in these letters were new lease contracts for signing. DCCSI Damage is the loss, hurt, or harm which results from injury, and damages are
warned that failure of the lessee to accomplish the contracts shall be deemed as lack the recompense or compensation awarded for the damage suffered. One becomes liable
of interest on the lessee’s part, and agreement to the termination of the lease. in an action for damages for a non-trespassory invasion of another’s interest in the
Private respondents did not answer any of these letters. Still, the lease contracts private use and enjoyment of asset if (a) the other has property rights and privileges with respect to
were not rescinded. the use or enjoyment interfered with, (b) the invasion is substantial, (c) the defendant’s conduct is a legal
cause of the invasion, and (d) the invasion is either intentional and unreasonable or unintentional and
Page 368 of 528
actionable under general negligence rules. The elements of tort interference are: (1) existence of
valid contract; (2) knowledge on the part of the third person of the existence of contract; and (3)
interference of the third person is without legal justification or excuse.
In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI
to lease the warehouse to his enterprise at the expense of respondent corporation.
Though petitioner took interest in the property of respondent corporation and benefited
from it, nothing on record imputes deliberate wrongful motives or malice on him.
Section 1314 of the Civil Code categorically provides also that, “Any third person
who induces another to violate his contract shall be liable for damages to the other contracting party.”
Petitioner argues that damage is an essential element of tort interference, and since the
trial court and the appellate court ruled that private respondents were not entitled to
actual, moral or exemplary damages, it follows that he ought to be absolved of any
liability, including attorney’s fees.
It is true that the lower courts did not award damages, but this was only because
the extent of damages was not quantifiable. We had a similar situation in Gilchrist, where
it was difficult or impossible to determine the extent of damage and there was nothing
on record to serve as basis thereof. In that case we refrained from awarding damages.
We believe the same conclusion applies in this case.
While we do not encourage tort interferers seeking their economic interest to
intrude into existing contracts at the expense of others, however, we find that the
conduct herein complained of did not transcend the limits forbidding an obligatory
award for damages in the absence of any malice. The business desire is there to make
some gain to the detriment of the contracting parties. Lack of malice, however,
precludes damages. But it does not relieve petitioner of the legal liability for entering
into contracts and causing breach of existing ones. The respondent appellate court
correctly confirmed the permanent injunction and nullification of the lease contracts
between DCCSI and Trendsetter Marketing, without awarding damages. The injunction
saved the respondents from further damage or injury caused by petitioner’s interference.
JOY ADRANEDA
Page 369 of 528

333 Spouses Custodio vs. CA| Regalado harm was not the result of a violation of a legal duty. These situations are often
G.R. No. 116100, February 9, 1996 | 253 SCRA 483 called damnum absque injuria.
• In order that a plaintiff may maintain an action for the injuries of which he
FACTS complains, he must establish that such injuries resulted from a breach of duty which
• Original plaintiff Pacifico Mabasa died during the pendency of this case and was the defendant owed to the plaintiff, a concurrence of injury to the plaintiff, and legal
substituted by Ofelia Mabasa, his surviving spouse. responsibility by the person causing it. The underlying basis for the award of tort
• Plaintiff owns a parcel of land with a two-door apartment erected thereon. Said damages is the premise that an individual was injured in contemplation of law
property was surrounded by other immovables pertaining to defendants therein. • In the case at bar, although there was damage, there was no legal injury. Contrary to
• As an access to P. Burgos St. from plaintiff’s apartment, there are two possible the claim of private respondents, petitioners could not be said to have violated the
passageways. principle of abuse of right. The act of petitioners constructing a fence within their
• When plaintiff purchased the property, there were tenants occupying the premises lot is a valid exercise of their right as owners, hence not contrary to morals, good
and were acknowledged by Mabasa as tenants. customs or public policy. At the time of the construction of the fence, the lot was
• When on the tenants vacated the apartment, plaintiff saw that there had been built not subject to any servitudes.
an adobe fence in the first passageway, making it narrower in width. Said adobe wall • The proper exercise of a lawful right cannot constitute a legal wrong for which an
was constructed by defendants Santoses along their property, which is also along the action will lie, although the act may result in damage to another, for no legal right
first passageway. has been invaded.
• Defendant Morato constructed her adobe fence and even extended said fence in
such a way that the entire passageway was enclosed. It was then that the remaining
tenants of said apartment vacated the area.
• Plaintiff Mabasa filed a civil case of easement of right of way, which was granted by
the trial court. Not satisfied with the decision because it did not award damages,
plaintiff represented by his heirs raised it to the CA, which affirmed the trial court
decision.
ISSUES & ARGUMENTS

• W/N the award of damages is in order?
NO. THE AWARD OF DAMAGES HAS NO SUBSTANTIAL LEGAL BASIS.

• The decision of the CA which awarded damages was based solely on the fact that
the original plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized
rentals when the tenants vacated the leased premises by reason of the closure of the
passageway.
• However, the mere fact that the plaintiffs suffered losses does not give rise to a right
to recover damages. To warrant the recovery of damages, there must be both a right
of action for a legal wrong inflicted by the defendant, and damage resulting to the
plaintiff therefrom. Wrong without damage, or damage without wrong, does not
constitute a cause of action, since damages are merely part of the remedy allowed
for the injury caused by a breach or wrong.
• There is a material distinction between damages and injury. Injury is the illegal
invasion of a legal right; damage is the hurt, or harm which results from the injury;
and damages are the recompense or compensation awarded for the damage suffered.
Thus, there can be damage without injury in those instances in which the loss or
FRANCIS ESPIRITU
Page 370 of 528

334 Air France v. CA | Padilla ticket, it was not unreasonable for Air France to deny the request. Besides, a
G.R. No. 76093 March 21, 1989| 171 SCRA 399 recurring ear infection was pleaded as reason necessitating urgent return to Manila.
Assuming arguendo a worsening pain or discomfort, private respondent appears to
FACTS have still proceeded to four (4) other cities covering a period of at least six (6) days
• Private respondent Morales, thru his agent, bought an airline ticket from petitioner’s and leaving open his date of departure from Hongkong to Manila. And, even if he
Manila ticketing office. The itinerary covered by the ticket included several cities claimed to have undergone medical examination upon arrival in Manila, no medical
with certain segments thereof restricted by markings of “non endorsable” and “valid certificate was presented. He failed to even remember his date of arrival in Manila.
on AF (Air France) only.” • With a claim for a large amount of damages, the Court finds it unsual for
• While in New York, respondent obtained medical certificates attesting to an ear respondent, a lawyer, to easily forget vital information to substantiate his plea. It is
infection which necessitated medical treatment. After a few more trips to other cities also essential before an award of damages that the claimant must satisfactorily prove
in Europe, he requested to the petitioner (twice) to shorten his trip by deleting some during the trial the existence of the factual basis of the damages and its causal
of the cities in his itinerary so that he can go back to Manila and have his ear connection to defendant's acts.
checked. • Air France employees in Hamburg informed private respondent that his tickets were
• Petitioner informed respondent that as a matter of procedure, confirmation of the partly stamped "non-endorsable" and "valid on Air France only." Mere refusal to
Manila ticketing office must be secured before shortening of the route. His requests accede to the passenger's wishes does not necessarily translate into damages in the
were eventually denied. This prompted the respondent to buy an entirely new set of absence of bad faith. To our mind, respondent has failed to show wanton,
tickets to be able to go back home. malevolent or reckless misconduct imputable to petitioner in its refusal to re-route.
• Upon arriving in Manila, respondent sent a letter-complaint to petitioner thru its • Air France Manila acted upon the advise of its Manila ticketing office in denying
Manila ticketing office. The petitioner advised the respondent to surrender the private respondent's request. There was no evident bad faith when it followed the
unused flight coupons in order to have them refunded but the respondent kept the advise not to authorize rerouting. At worst, the situation can be considered a case of
said coupons and instead, filed a complaint for breach of contract of carriage and inadvertence on the part of petitioner’s Manila ticketing office in not explaining the
damages. non-endorsable character of the ticket. Of importance, however, is the fact that
• RTC held in favor of respondent. CA modified the judgment but it was still for the private respondent is a lawyer, and the restriction box clearly indicated the non-
respondent. endorsable character of the ticket. Omissions by ordinary passengers may be
condoned but more is expected of members of the bar who cannot feign ignorance
ISSUES & ARGUMENTS of such limitations and restrictions. An award of moral and exemplary damages
• W/N there was really a breach of contract of carriage on the part of the cannot be sustained under the circumstances, but petitioner has to refund the
petitioner, as to justify the award to private respondent of actual, moral, and unused coupons in the Air France ticket to the private respondent.
exemplary damages?
THERE WAS NO BREACH OF CONTRACT. PETITIONER IS NOT

LIABLE.
• International Air Transportation Association (IATA) Resolution No. 275 e, 2.,
special note reads: "Where a fare is restricted and such restrictions are not clearly
evident from the required entries on the ticket, such restrictions may be written,
stamped or reprinted in plain language in the Endorsement/Restrictions" box of the
applicable flight coupon(s); or attached thereto by use of an appropriate notice."
Voluntary changes to tickets, while allowable, are also covered by (IATA)
Resolution No. 1013, Art. II, which provides: "1. changes to the ticket requested by
the passenger will be subject to carrier’s regulations.
• Private respondent wanted a rerouting to Hamburg, Geneva, Rome, Hongkong and
Manila which shortened the original itinerary on the ticket issued by AF Manila
through ASPAC, its general sales agent. Considering the original restrictions on the JOHN FADRIGO
Page 371 of 528

335 Ateneo De Manila Univ vs. CA| Gutierrez
G.R. No. L- 56180, Oct 16, 1986 | 145 SCRA 100
FACTS
• In a letter-complaint addressed to the Dean of Arts&Sciences of Ateneo (Fr.
Welsh), Carmelita Mateo, waitress in the caf of Cervini Hall charged Juan Ramon
Guanzon, boarder & college freshman, with unbecoming conduct.
• Juan Ramon allegedly cursed and hit Carmelita in public when Juan Ramon was
asked to wait for his order (siopao).
• The univ conducted an investigation and dismissed Juan Ramon.
• Juan Ramon’s parents filed a complaint for damages against the univ stating that
Juan Ramon was expelled w/out giving him a fair trial and that they were prominent
residents of Bacolod.
• The lower vourt found for the Guanzons and ordered the univ to pay P92 as actual
damages; 50K moral; 5K atty’s fees.
• CA initially reversed the lower court but upon MR, reinstated lower court’s ruling.
•
ISSUES & ARGUMENTS

• W/N respondents are entitled to the award of damages?
NO. THE UNIV OBSERVED DUE PROCESS, NO BASIS FOR THE AWARD
OF DAMAGES.
• After the incident, the Board of Discipline conducted an investigation by
interviewing the people who witnessed the incident.
• The accused was fully informed of the accusation against him and he admitted the
truth of the charge.
• Notice of the meeting was posted on the bulletin board but Juan Ramon did not
care to inform his parents/guardians.
• The Board decided unanimously that Juan Ramon be dropped from the roll of
students.
• When the decision was about to be carried out, Juan Ramon voluntarily applied for
honorable dismissal.
• The parents of Juan Ramon arranged for a full refund of tuition fees.
• Juan Ramon was never out of school as he was admitted at De La Salle College and
was later on transferred to another Jesuit school.
• Juan Ramon was intelligent and mature enough to know his responsibilities and he
was fully cognizant of the gravity of his offense.
• The fact that he chose to remain silent and did not inform his parents about the case
is not the fault of the univ.
• The penalty was based on reasonable rules and regulations applicable to all students
guilty of the same offense.
• No bad faith, malice on the part of Ateneo. PAT FERNANDEZ
Page 372 of 528

336 PAL V. MIANO
G.R. No. 106664 March 8, 1995 YES. In breach of contract of carriage by air, moral damages are awarded only if the
defendant acted fraudulently or in bad faith. Bad faith means a breach of a known duty
FACTS: through same motive of interest or ill will.
• On August 31, 1988, private respondent took petitioner's flight PR 722, Mabuhay The trial court erred in awarding moral damages to private respondent. The
Class, bound for Frankfurt, Germany. He had an immediate onward connecting established facts evince that petitioner's late delivery of the baggage for eleven (11) days
flight via Lufthansa flight LH 1452 to Vienna, Austria. At the Ninoy Aquino was not motivated by ill will or bad faith. In fact, it immediately coordinated with its
International Airport, he checked-in one brown suitcase weighing twenty (20) Central Baggage Services to trace private respondent's suitcase and succeeded in finding
kilograms but did not declare a higher valuation. He claimed that his suitcase it. At the hearing, petitioner's Manager for Administration of Airport Services
contained money, documents, one Nikkon camera with zoom lens, suits, sweaters, Department Miguel Ebio testified that their records disclosed that Manila, the originating
shirts, pants, shoes, and other accessories. station, did not receive any tracer telex. A tracer telex, an airline lingo, is an action of any
• Upon private respondent's arrival at Vienna via Lufthansa flight LH 1452, his station that the airlines operate from whom a passenger may complain or have not
checked-in baggage was missing. He reported the matter to the Lufthansa received his baggage upon his arrival. It was reasonable to presume that the handling of
authorities. After three (3) hours of waiting in vain, he proceeded to Piestany, the baggage was normal and regular. Upon inquiry from their Frankfurt Station, it was
Czechoslovakia. Eleven (11) days after or on September 11, 1988, his suitcase was however discovered that the interline tag of private respondent's baggage was
delivered to him in his hotel in Piestany, Czechoslovakia. He claimed that because of accidentally taken off. According to Mr. Ebio, it was customary for destination stations
the delay in the delivery of his suitcase, he was forced to borrow money to buy some to hold a tagless baggage until properly identified. The tracer telex, which contained
clothes, to pay $200.00 for the transportation of his baggage from Vienna to information on the baggage, is matched with the tagless luggage for identification.
Piestany, and lost his Nikkon camera. Without the tracer telex, the color and the type of baggage are used as basis for the
• In November 1988, private respondent wrote to petitioner a letter demanding: (1) matching, thus, the delay.
P10,000.00 cost of allegedly lost Nikkon camera; (2) $200.00 for alleged cost of We can neither sustain the award of exemplary damages. The prerequisite for the
transporting luggage from Vienna to Piestany; and (3) P100,000.00 as damages. In award of exemplary damages in cases of contract or quasi-contract is that the defendant
its reply, petitioner informed private respondent that his letter was forwarded to its acted in wanton, fraudulent, reckless, oppressive, or malevolent manner. The undisputed
legal department for investigation. facts do not so warrant the characterization of the action of petitioner.
• Private respondent felt his demand letter was left unheeded. He instituted an action The award of attorney's fees must also be disallowed for lack of legal leg to stand
for Damages docketed as Civil Case No. 89-3496 before the Regional Trial Court of on. The fact that private respondent was compelled to litigate and incur expenses to
Makati. protect and enforce his claim did not justify the award of attorney's fees. The general rule
• Petitioner contested the complaint. It disclaimed any liability on the ground that is that attorney's fees cannot be recovered as part of damages because of the policy that
there was neither a report of mishandled baggage on flight PR 722 nor a tracer telex no premium should be placed on the right to litigate. Petitioner is willing to pay the just
received from its Vienna Station. It, however, contended that if at all liable its claim of $200.00 as a result of the delay in the transportation of the luggage in accord
obligation is limited by the Warsaw Convention rate. with the Warsaw Convention. Needless to say, the award of attorney's fees must be
• Petitioner filed a Third-Party Complaint against Lufthansa German Airlines deleted where the award of moral and exemplary damages are eliminated.
imputing the mishandling of private respondent's baggage, but was dismissed for its
• In its decision, the trial court observed that petitioner's actuation was not attended
by bad faith. Nevertheless, it awarded private respondent moral and exemplary
damages and attorney's fees hence this petition for review.
ISSUE:
Whether or not trial court erred in awarding moral and exemplary damages?

J.C. LERIT
Page 373 of 528

337 DBP v. CA | Davide, Jr. Actual or compensatory damages cannot be presumed, but must be proved with
G.R. No. 118342 January 5, 1998 reasonable degree of certainty. A court cannot rely on speculations, conjectures, or
guesswork as to the fact and amount of damages, but must depend upon competent
FACTS proof that they have been suffered by the injured party and on the best obtainable
• Lydia P. Cuba is a grantee of a Fishpond Lease the Government; She obtained evidence of the actual amount thereof. It must point out specific facts which could
several loans from the Development Bank of the under the terms stated in the afford a basis for measuring whatever compensatory or actual damages are borne.
Promissory Notes; As security for said loans, Cuba executed two Deeds of In the present case, the trial court awarded in favor of CUBA P1,067,500 as actual
Assignment of her Leasehold Rights; damages consisting of P550,000 which represented the value of the alleged lost
• Cuba failed to pay her loan on the scheduled dates thereof in accordance with the articles of CUBA and P517,500 which represented the value of the 230,000 pieces of
terms of the Promissory Notes; Without foreclosure proceedings, whether bangus allegedly stocked in 1979 when DBP first ejected CUBA from the fishpond
judicial or extra-judicial, DBP appropriated the Leasehold Rights of Cuba and the adjoining house. This award was affirmed by the Court of Appeals.
over the fishpond in question; We find that the alleged loss of personal belongings and equipment was not proved
• After DBP has appropriated the Leasehold Rights of Cuba over the fishpond in by clear evidence. Other than the testimony of CUBA and her caretaker, there was
question, DBP, in turn, executed a Deed of Conditional Sale of the Leasehold no proof as to the existence of those items before DBP took over the fishpond in
Rights in favor of Cuba over the same fishpond in question; question. As pointed out by DBP, there was not "inventory of the alleged lost items
• In the negotiation for repurchase, Cuba addressed two letters to the Manager DBP, before the loss which is normal in a project which sometimes, if not most often, is
Dagupan City. DBP thereafter accepted the offer to repurchase in a letter addressed left to the care of other persons." Neither was a single receipt or record of
to Cuba; acquisition presented.
• After the Deed of Conditional Sale was executed in favor of Cuba , a new Fishpond Curiously, in her complaint dated 17 May 1985, CUBA included "losses of property"
Lease Agreement was issued by the Ministry of Agriculture and Food in favor of as among the damages resulting from DBP's take-over of the fishpond. Yet, it was
Cuba only, excluding her husband; only in September 1985 when her son and a caretaker went to the fishpond and the
• Cuba failed to pay the amortizations stipulated in the Deed of Conditional adjoining house that she came to know of the alleged loss of several articles. Such
Sale; After Cuba failed to pay the amortization as stated in Deed of Conditional claim for "losses of property," having been made before knowledge of the alleged
Sale, she entered with the DBP a temporary arrangement whereby in consideration actual loss, was therefore speculative. The alleged loss could have been a mere
for the deferment of the Notarial Rescission of Deed of Conditional Sale, Cuba afterthought or subterfuge to justify her claim for actual damages.
promised to make certain payments; With regard to the award of P517,000 representing the value of the alleged 230,000
• DBP thereafter sent a Notice of Rescission thru Notarial Act, and which was pieces of bangus which died when DBP took possession of the fishpond in March
received by Cuba ; After the Notice of Rescission, DBP took possession of the 1979, the same was not called for. Such loss was not duly proved; besides, the claim
Leasehold Rights of the fishpond in question; therefor was delayed unreasonably. From 1979 until after the filing of her complaint
• That after DBP took possession of the Leasehold Rights over the fishpond in in court in May 1985, CUBA did not bring to the attention of DBP the alleged loss.
question, DBP thereafter executed a Deed of Conditional Sale in favor of defendant The award of actual damages should, therefore, be struck down for lack of sufficient
Agripina Caperal through a public sale; Thereafter, Caperal was awarded Fishpond basis.
Lease Agreement. In view, however, of DBP's act of appropriating CUBA's leasehold rights which was
contrary to law and public policy, as well as its false representation to the then
ISSUES & ARGUMENTS Ministry of Agriculture and Natural Resources that it had "foreclosed the mortgage,"
• W/N Cuba is entitled to recover damages an award of moral damages in the amount of P50,000 is in order conformably with
Article 2219(10), in relation to Article 21, of the Civil Code. Exemplary or corrective
HOLDING & RATIO DECIDENDI damages in the amount of P25,000 should likewise be awarded by way of example
or correction for the public good. 20 There being an award of exemplary damages,
YES attorney's fees are also recoverable.
Article 2199 provides:
Except as provided by law or by stipulation, one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he has duly proved.
Such compensation is referred to as actual or compensatory damages.
JON LINA
Page 374 of 528

338 People v Roland Paraiso|Per Curiam fact of delay in reporting the crime is not sufficient to doubt the truthfulness of the
G.R. No. 127840 November 29, 1999 | 319 SCRA 422 accusation. Witnesses were able to accurately describe and identify the accused later.
The Court took note that the incident lasted for several minutes that the children
FACTS had sufficient time to develop some kind of familiarity with the accused.
• Paraiso and a certain John Doe confederating and mutually helping one another, • Paraiso claim non-flight as indication of innocence, but the court held that no law or
with intent to gain, by means of violence and intimidation, willfully, unlawfully and principle guarantees that non-flight per se is a conclusive proof of innocence.
feloniously entered the home of Lolita Tigley. Once inside, took, stole and carried • Crime was aggravated by the fact that it was committed in the dwelling of the victim
away: a Role watch, assorted jewelries, 200 in cash, telescope and a video camera. and abuse of superior strength. Disregard of sex and age was not present since
On the occasion thereof, with intent to kill, dragged Lolita inside a room and robbery is a crime against property; this latter aggravating circumstance only applies
thereafter assaulted, attacked and stabbed her on different parts of the body which to crimes against person or honor.
caused her death shortly thereafter.
• These facts were corroborated by eyewitness Sheila Alipio (18yo), niece of the DAMAGES WERE MODIFIED.
victim, who delivered a 1-gallon water container to Lolita’s house during the time of • CIVIL INDEMNITY FOR DEATH: P50,000 (basis, under jurisprudence PPL v
the attack, and was pushed inside the house upon entry by one of the accused. She Espanola). Fact death and accused’s responsibility merits such award; no further
found Paraiso armed with a gun pointed at her aunt’s temple while the other proof is necessary to determine award.
accused had a Batangas fan knife, which the latter poked at her right side. • ACTUAL DAMAGES is premised upon competent proof and best evidence
• The 3 sons of Lolita : Epifanio (15yo), Ferdinand (17yo), and Kim (13yo), who obtainable. In this case, only the P200 is the only amount was sufficiently proven by
were tied and herded upstairs to one room with Sheila, corroborated Sheila’s prosecution. Actual damages were reduced to P200. The 178K valuation of jewelries
testimony before the NBI. prepared by Epifanio Sr (the husaband of victim) and the P47,600 burial expense
• NBI Medico Dr. Zaldarriaga explained the Necropsy Report of the victim and prepare by Linda Alipio (sister-in-law of victim) were not proven, since both of
identified her cause of death as: hemorrhage, severe, secondary to stab wounds of them were not presented as prosecution witnesses.
the chest • EXEMPLARY DAMAGES are awarded after proof that 1 or more aggravating
• The RTC of Cebu adjudged: Roland Paraiso and a certain John doe guilty of circumstances (AC) attended the crime. Since only 2 AC were present, amount was
robbery with homicide with 3 aggravating circumstances (committed in the dwelling, reduced to P50,000.
abuse of superior strength and disregard of age and sex). They were sentenced to • MORAL DAMAGES are awarded to compensate the victim (and/or the heirs) for
death (by lethal injection) and made liable to pay: injuries to their feelings; it is not awarded to enrich the heirs of the victim. Court
o actual damages of P200 (cash stolen) + 179,800 (assorted jewelries, Rolex reduced the amount to P100,000.
wristwatch, videocam)
o exemplary damages of 100k
o moral damages of 200k
• Case is now on automatic appeal.
ISSUES & ARGUMENTS

• CRIM: W/N Paraiso was guilty?
• TORTS: W/N the damages awarded were proper?
GUILTY.
• The alibi that Paraiso was home, as testified by his father, will not proper because in
fact he lived 5 houses away only from Lolita’s home. Court did not give credence to
his alibi because it doesn’t discount the possibility that he could’ve been in the scene
and the fact that it was a self-serving testimony of his father.
• They reported the case 2 days later after the incident, but it took 10 months before
he was identified considering he has been a neighbor for 7 years. Court held that DIANE LIPANA
Page 375 of 528

339 Victory Liner vs. Heirs of Malecdan | Mendoza
G.R. No. 154278, December 27, 2002 |
FACTS
• While crossing the National Highway on his way home from the farm a Dalin Liner
bus on the southbound lane stopped to allowed farmer Malecdan and hi carabao tp
cross. While he was crossing the highway, a bus of petitioner Victory Liner, driven
by Joson bypassed the Dalin bus and hit farmer Malecdan. As a result, Malecdan
was thrown off the carabao, while the beast toppled over. The Victory Liner bus
sped past the old man, while the Dalin bus proceeded to its destination without
helping him.
• The incident was witnessed by Malecdan's neighbor, Lorena, who was resting in a
nearby waiting shed after working on his farm. Malecdan sustained a wound on his
left shoulder, from which bone fragments protruded (his carabao died). He was
taken by Lorena and another person to the Hospital where he died a few hours after
arrival. Subsequently, a criminal complaint for reckless imprudence resulting in
homicide and damage to property was filed against the
• Actual, Moral and other damages were awarded to him in the manner as follows: a.
P50,000.00 as death indemnity; b. P88,339.00 for actual damages; c. P200,000.00 for
moral damages; d. P50,000.00 as exemplary damages; e. Thirty percent (30%) as
attorney's fees of whatever amount that can be collected by the plaintiff; and f. The
costs of the suit.
ISSUES & ARGUMENTS

• W/N Victory Liner is liable for Actual damages when there are no receipts to
substantiate Malecdan’s claim.
VICTORY LINER IS LIABLE BUT THE AMOUNT WAS REDUCED

• To justify an award of actual damages, there should be proof of the actual amount
of loss incurred in connection with the death, wake or burial of the victim. We
cannot take into account receipts showing expenses incurred some time after the
burial of the victim, such as expenses relating to the 9th day, 40th day and 1st year
death anniversaries. In this case, the trial court awarded P88,339.00 as actual
damages. While these were duly supported by receipts, these included the amount of
P5,900.00, the cost of one pig which had been butchered for the 9th day death
anniversary of the deceased. This item cannot be allowed. We, therefore, reduce the
amount of actual damages to P82,439.00.00.
MIK MALANG
Page 376 of 528

340 Refractories Corporation of the Philippines v. IAC and Firestone Ceramic • Refractorie’s demand for payment of storage fees was not one of Firestone's
|Regalado obligations under the agreement, hence there was no need to pay the same before
G.R. No. 70839, August 17, 1989| 176 SCRA 539 the goods in question could be released
• However, with respect to the awards for damages and attorney's fees, the judgment
FACTS of the trial court, as affirmed by IAC, require modification. Article 2219 of the Civil
• In 1980, Refractories Corporation of the Philippines (Refractories) imported from Code is explicit as to the requirements for entitlement to actual or compensatory
Japan around 250 metric tons of magnesite "ube" green and magnesia clinker damages, that is, that "(e)xcept as provided by law or by stipulation, one is entitled
• When the shipment arrived, they were discovered to be water-damaged and unfit for to an adequate compensation only for such pecuniary loss suffered by him as he has
consumption hence they were stored in its warehouse and as a consequence, it duly proved." Indeed, before the award of actual or compensatory damages can be
declared the whole cargo a total loss and filed a claim with its insurer, Filriters made, adequate proof of the pecuniary loss suffered is indispensable. These factual
Guaranty Assurance Corporation (Filriters) and legal bases must be clearly established and reliance on mere speculation,
• Subsequently, with the knowledge and consent of Refractories, Filriters placed said conjecture or guesswork on the part of the trial court will demand the reversal of the
shipment on bid for salvage dispose and, in the public auction held by virtue award. The same is true if the proof is flimsy and unsubstantiated
thereof, Sangalang, acting for and in behalf of Firestone Ceramic, Inc. (Firestone), • The foregoing considerations appear to have been lost upon the trial court when it
submitted a sealed bid, which resulted in awarding the shipment to it as the highest awarded two components of actual and compensatory damages, one for
bidder P234,000.00 and another in the sum of P276,672.00 in case of failure to deliver the
• After full payment of the price of the goods, Firestone attempted to withdraw the remaining 96 tons of said water-damaged magnesite and magnesia clinker. With
goods from the warehouse of Refractories, but it refused to release the same on the respect to the first, the absence of actual proof thereon to justify the same is evident
ground that it had not received its insurance claim payment and the question of from the records and transcripts of the proceedings in the case. Other than the
whether or not the goods were exempt from customs duties and taxes had yet to be recitation of the reliefs prayed for in the complaint, no evidence with respect to said
resolved. Later, Refractories withdrew its objection after entering into an agreement damages was ever pleaded or adduced in court
with Firestone • Likewise, the award of P276,672.00 which Refractories was ordered to pay is not
• When Firestone paid the custom duties and taxes on the goods, Refractories again sustained by the evidence. Such amount was claimed to be equivalent to the
refused to release the goods and demanded storage fees claiming that there was insurance payment, but no reason has been advanced, nor is any apparent, as to why
delay on the part of Firestone in withdrawing the goods, to which Firestone refused the measure of the amount to be paid by Refractories in case of nondelivery of the
to pay aforesaid balance of the shipment should be the insurance amount due from
• Firestone then filed an action for specific performance and damages against Filriters Filriters. The agreement is clear that the amount to be paid to Firestone in case of
and Refractories. During the pendency of the case, Firestone was able to obtain shortage or deficiency in delivery is P450.00 per metric ton. This amount is in fact
delivery of 159.28 metric tons of the cargo upon a deposit of the storage fee the same monetary basis of the bid of Firestone which it actually paid for the
• The CFI rendered judgment finding that it was Refractories which prevented the salvaged cargo. Thus, if ever there should be any pecuniary loss because of the non-
immediate removal of the cargo and if there was any delay on the part of Firestone, delivery of the goods, it should not be based on the insurance coverage or proceeds
the same was caused by the imposition of custom duties and taxes, and ordered them to which would be due only to Refractories because of the declaration of total loss of
pay Firestone jointly and severally the sum of P 234,000.00 as and for actual and compensatory the cargo since this represents the indemnity for the amount spent in importing the
damages, and for attorney's fees and expenses of litigation goods and is the value thereof at the time of the loss. Whatever additional damages
• On appeal, the IAC affirmed with modification the decision of the CFI regarding may be suffered by Firestone because of non-delivery or incomplete delivery shall
the interest which it reduced to 12% per annum be covered by the legal interest on the principal amount due, which is 6% per
annum from default
ISSUES & ARGUMENTS
• W/N the action of Firestone is proper entitling it the damages awarded Petition DISMISSED; Decision MODIFIED.

THE ACTION FOR SPECIFIC PERFORMANCE WAS JUSTIFIED, BUT
THE AWARD FOR DAMAGES AND ATTORNEY’S FEES MUST BE
MODIFIED
KATH MATIBAG
Page 377 of 528

341 David v. CA| J.
G.R. No. 111168 | 290 SCRA 727
Actual Damages
FACTS
• On March 28, 1981, at about 10:00 p.m., while the Nora brothers Arturo, Arnel,
Noel and Narciso were walking along Flerida Street in Malabon, Metro Manila on
their way home to Capitan Tiago Street, they saw petitioner near the compound of
his house. Noel, the deceased, confronted him about derogatory remarks allegedly
made by the latter. Petitioner ran to his house to get a gun. When the Nora brothers
reached the intersection of Flerida and Capitan Tiago Streets, he shouted at them
Putang ina ninyo and other epithets, and then fired four times at them. One shot hit
Noel, killing him. Another shot hit Narciso Nora on the ankle. Another nearly hit
the zipper of Arturo Nora.
• After trial, petitioner was found guilty as charged. And was ordered to pay P37,000
as actual damages.
ISSUES & ARGUMENTS

• W/N the amount of actual damages awarded is proper

• Only expenses supported by receipts and which appear to have been actually
expended in connection with the death of the victim should be allowed. The award
of actual damages cannot be based on the allegation of a witness without any
tangible document to support such claim.
NINA MEIJA
Page 378 of 528

342 PNOC Shipping and Transport Corporation vs. CA| Romero ship is valued without reference to its actual future engagements, then it may be
G.R. No. 107518, October 8, 1998 | 297 SCRA 402 necessary to add to the value the anticipated profit.
• To enable an injured party to recover actual or compensatory damages, he is
FACTS required to prove the actual amount of loss with reasonable degree of certainty
• The M/V Maria Efigenia XV, owned by Maria Efigenia Fishing Corporation premised upon competent proof and on the best evidence available. He must
collided with the vessel Petroparcel which at that time was owned by Luzon establish his case by a preponderance of evidence. Damages cannot be presumed by
Stevedoring Corporation (LSC). the courts, in making an award it must point out specific facts that could afford a
• The Board of Marine Inquiry declared Petroparcel to be at fault. After unsuccessful basis for measuring such damages.
demands on LSC, Marie Efigenia sued the LSC and the Petroparcel captain before • In this case, actual damages were proven through the sole testimony of Maria
the CFI. It prayed for an award of P692,680.00, allegedly representing the value of Efigenia’s general manager and certain pieces of documentary evidence. The price
the fishing nets, boat equipment, and cargoes. quotations are ordinary private writings, and should have been proffered along with
• During the pendency of the case, petitioner PNOC sought to be substituted in the the testimony of the authors thereof. In the absence of which, they partake of
place of LSC as it had already acquired ownership of Petroparcel. Meanwhile, Maria hearsay evidence. Damages may not be awarded on the basis of hearsay evidence.
Efigenia sought to amend its complaint by also claiming for the amount of • Nonetheless, if there is lack of sufficient proof as to the actual damages suffered, the
P600,000.00 as the value of the vessel, and alleging that it had also incurred complainant is entitled to nominal damages.
unrealized profits and lost business opportunities.
• The lower court ordered PNOC to pay Maria Efigenia, based on some documentary CA decision MODIFIED.
evidence presented by the latter (in the form of price quotations). The CA affirmed
in toto. Hence the instant recourse.
ISSUES & ARGUMENTS

• W/N the award of actual damages was proper.
AWARD OF ACTUAL DAMAGES IMPROPER FOR LACK OF

EVIDENTIARY BASIS THEREFOR. HOWEVER, THE AWARD OF
NOMINAL DAMAGES IS IN ORDER.
• Under Article 2199 of the NCC, actual or compensatory damages are those awarded
in satisfaction of, or in recompense for, loss or injury sustained. They proceed from
a sense of natural justice and are designed to repair the wrong that has been done, to
compensate for the injury inflicted and not to impose a penalty.
• In actions based on torts and quasi-delicts, actual damages include all the natural and
probable consequences of the act or omission complained of. There are two kinds:
one is the loss of what a person already possesses (dano emergente), and the other is
the failure to receive as a benefit that which would have pertained to him (lucro
cesante).
• In the case of profit-earning chattels, what has to be assessed is the value of the
chattel as to its owner as a going concern at the time and place of the loss, and this
means, at least in the case of ships, that regard must be had to existing and pending
engagements.
• If the value of the ship reflects the fact that it is in any case certain of profitable
employment, then nothing can be added to that value in respect of charters actually
lost, since it would compensate the plaintiff twice over. On the other hand, if the CHRISSIE MORAL
Page 379 of 528

343 Bank of America vs. American Realty Corp | Buena • Actual or compensatory damages are those recoverable because of pecuniary loss
G.R. No. 133876, December 29, 2999| in business, trade, property, profession, job or occupation and the same must be
proved, otherwise if the proof is flimsy and non-substantial, no damages will be
FACTS given. Indeed, the question of the value of property is always a difficult one to settle
• Petitioner Bank of America NT & SA (BANTSA) is an international banking and as valuation of real property is an imprecise process since real estate has no inherent
financing institution duly licensed to do business in the Philippines, while private value readily ascertainable by an appraiser or by the court. The opinions of men vary
respondent American Realty Corporation (ARC) is a domestic corporation. Bank of so much concerning the real value of property that the best the courts can do is hear
America International Limited (BAIL), on the other hand, is a limited liability all of the witnesses which the respective parties desire to present, and then, by
company organized and existing under the laws of England. carefully weighing that testimony, arrive at a conclusion which is just and equitable
• BANTSA and BAIL on several occasions granted three major multi-million United • In the instant case, petitioner assails the Court of Appeals for relying heavily on the
States (US) Dollar loans to three (3) corporate borrowers all of which are existing valuation made by Philippine Appraisal Company. In arriving at the amount of
under and by virtue of the laws of the Republic of Panama and are foreign affiliates actual damages, the trial court justified the award by presenting the following
of private respondent. ratiocination: The properties consist of about 39 hectares which are not distant from
• Due to the default in the payment of the loan amortizations, BANTSA and the Metro Manila and are easily accessible through well-paved roads; The properties are
corporate borrowers signed and entered into restructuring agreements. As additional suitable for development into a subdivision for low cost housing; The pigpens
security for the restructured loans, private respondent ARC as third party which used to exist in the property have already been demolished; Houses of strong
mortgagor, executed two real estate mortgages over its parcels of land including materials are found in the vicinity of the property, and the vicinity is a growing
improvements thereon located in Bulacan. community; It will not be hard to find interested buyers of the property; etc.
• Eventually, the corporate borrowers defaulted in the payment of the restructured • Similarly, we affirm the grant of exemplary damages although the amount of Five
loans prompting petitioner BANTSA to file civil actions before foreign courts for Million Pesos (P5,000,000.00) awarded, being excessive, is subject to reduction.
the collection of the principal loan. Thereafter, petitioner BANTSA filed before the Exemplary or corrective damages are imposed, by way of example or correction for
Office of the Provincial Sheriff of Bulacan, an application for extrajudicial the public good, in addition to the moral, temperate, liquidated or compensatory
foreclosure of real estate mortgage. After due publication and notice, the mortgaged damages. Considering its purpose, it must be fair and reasonable in every case and
real properties were sold at public auction in an extrajudicial foreclosure sale. should not be awarded to unjustly enrich a prevailing party.
• Private respondent filed before the Pasig RTC an action for damages against the Petition denied. Decision of the Court of Appeals affirmed.
petitioner, for the latter's act of foreclosing extrajudicially the real estate mortgages
despite the pendency of civil suits before foreign courts for the collection of the
principal loan.
ISSUES & ARGUMENTS

W/N petitioner is liable to pay damages to private respondent ARC for
extradjudicially foreclosing on the property despite the pending civil actions in
foreign courts?
PETITIONER LIABLE FOR ACTUAL AND EXEMPLARY DAMAGES.
• Petitioner, by the expediency of filing four civil suits before foreign courts,
necessarily abandoned the remedy to foreclose the real estate mortgages constituted
over the properties of third-party mortgagor and herein private respondent ARC.
Moreover, by filing the four civil actions and by eventually foreclosing extrajudicially
the mortgages, petitioner in effect transgressed the rules against splitting a cause of
action well-enshrined in jurisprudence and our statute books.
• We hold that the private respondent is entitled to the award of actual or
compensatory damages inasmuch as the act of petitioner BANTSA in extrajudicially
foreclosing the real estate mortgages constituted a clear violation of the rights of
herein private respondent ARC, as third-party mortgagor. MAUI MORALES
Page 380 of 528

344 BPI v. Leobrera |Pardo, J.
G.R. No. 137147. January 29, 2002
FACTS
• Leobrera is engaged in shell manufacturer, retail and shell craft export. He has been
a valued client of Bank of Philippine Islands
• He obtained a loan of P500k with BPI, and executed a real estate mortgage over
certain properties as a form of security.
• Darlene Shells (with which Leobrera had export transaction) sent a remittance in
favor of Leobrera through BPI amounting to $8K+. Unfortunately, however, the
latter maliciously and in bad faith, refused to accept the said remittance and credit
the same to Leobrera’s account with BPI. The latter reasoned that the name of the
beneficiary in the remittance was not “Carfel Shell Export” but ‘Car Sales Shell
Export,’ notwithstanding earlier and repeated advice by plaintiff-appellee
Leobrera upon defendant-appellant BPI that the remittance of Carfel Shell Export
from Darlene Shells is forth-coming, and that it could have verified that the correct
beneficiary thereof is Carfel Shell Export.
• From the evidence on record, plaintiff-appellee Leobrera already had export
business transactions with defendant-appellant BPI for more than ten (10) years.
• Because of this, Leobrera suffered business losses and its two real properties
mortgaged to BPI was foreclosed
• RTC ruled in favor of Leobrera and awarded him, among others, P1M actual
damages, this was affirmed by the CA
ISSUES & ARGUMENTS
W/N the Court of Appeals erred in awarding actual and moral damages and attorney’s
fees in amounts that were excessive and exhorbitant.
Yes.
• Whether there was preponderance of evidence to support an award of damages and
whether the act from which liability might arise exists, are factual questions.
However, the award of P1,000,000.00 as actual damages was not fully supported by
evidence. The loss that respondent could only show was the $1,763.50 letter of
credit and the remittance of $8,350.94 (totalling $10,114.44).
• the SC therefore reduced the award of actual damages to P200K.
MAGIC MOVIDO
Page 381 of 528

345 Talisay-Silay Milling Co. vs. Associacion de Agricultores de Talisay-Silay,
Inc. | Feliciano, J.: HOLDING & RATIO DECIDENDI
G.R. No. 91852, August 15, 1995 | 247 SCRA 361
YES
FACTS • Fist, it must be noted that AATSI was found to have violated the provision of Sec.
• EO 525 created Mill District No. 44, also known as the Talisay-Silay Mill District 4, RA 1825 for non-compliance with the 2nd requirement
composed of the Talisay-SIlay Milling Co. and its adherent plantations • Now, the question of the propriety of the decrease of the awarded damages was
• EO 900 proportionately distributed among the various mill districts in the based on the fact that petitioners failed to amend their complaint (Rule 10, Sec. 5)
Philippines the entire quota of sugar to be exported from the Philippines to the to conform to the evidence presented during trial which showed that TSMC and
United States TSICA suffered damages amounting to more than P1M by virtue of the illegal
• A state national emergency was declared in Dec., 1934 creating a huge surplurs of transfer of export sugar quota from TSMC to FFMCI
unmarketable sugar, hence the Philippine legislature enacted the ‘Sugar Limitation • The court held that if the facts shown entitled plaintiff to relief other than that
Act’ which provided that the Tydings Mc-Duffie Act, insofar as the production of asked for, no amendment to the complaint was necessary, especially where
Sugar is concerned, would remain in force for 3 years commencing with the 1931- defendant had himself raised the point on which recovery was based
1932 crop year, unless the Governor-General determined that the state of o The appellate court could treat the pleadings as amended to conform
emergency declared had ceased to the evidence although the pleadings were actually not amended
• On June, 1957, Congress approved RA 1825 which governed the transfer, under o The rule on amendment need not be applied rigidly, particularly where
certain conditions, of a planter’s sugar production allowance or quota from one no surprise or prejudice is caused the objecting party
sugar mill to another o The trial court should not be precluded from awarding an amount
o Sec. 4 provides: ‘The production allowance or quota corresponding to each higher than that claimed in the pleadings notwithstanding the absence
piece of land under the provisions of this act shall be deemed to be an of the required amendment
improvement attaching to the land entitled thereto. In the absence of a  BUT this is upon the condition that the evidence of such
milling contract or contracts, or where such milling contract or contract higher amount has been presented properly, with full
shall have expired, such production allowance or quota shall be opportunity on the part of the opposing parties to support
transferable preferable within the same district in accordance with such their respective contentions and to refute each other’s
rules and regulations as may be issued by the Sugar Quota Office: Provided evidence
that a plantation owner may transfer his production allowance or quota from one district
to another when the following conditions exist: (a) when there is no milling contract NO
between the planter and miller or when said contracts shall have expired; and (b) when • Familiar is the rule that ‘damages consisting of unrealized profits, frequently
the mill of the district in which the land of the planter lies is not willing to give him the referred as ‘ganancias frustradas’ or ‘lucrum cessans’ are not to be granted on the
participation laid down in section one of Republic Act Numbered Eight Hundred Nine basis of mere speculation, conjencture or surmise but rather by reference to
regarding the division of shares between the sugar mill and plantation owner. some reasonably definite standard such as market value, established experience
(Emphasis supplied)’ or direct inference from known circumstances
• Petitioners filed a complaint against respondents for transferring its quota in • Evidence of damages must be clear and apparent from the pronouncement of
violation of the said provision and was granted the court
• On appeal, the CA reduced the award of damages from approximately P15.4M to • The court does not distinctly state what facts were considered in arriving at the
only P1M, hence the present petition different figures, what amounts plaintiffs failed to receive, and what were
deducted to determine ‘unrealized profits’
ISSUES & ARGUMENTS • The court’s judgment is purely a conclusion of law and not a finding of the
• W/N the CA erred in reducing the amount of damages essential ultimate facts
• W/N the amount of damages awarded by the TC is supported by the • Hence, the case was remanded for the proper determination of the amount of
evidence of record damages
Page 382 of 528

WHEREFORE, the Decision and Resolution of the Court of Appeals in CA-G.R. No.
51350-R dated 30 October 1989 and 10 January 1990, respectively are hereby
MODIFIED insofar as the award of actual damages due Talisay-Silay Milling Co., Inc.
and Talisay-Silay Industrial Cooperative Association, Inc. are concerned. Subject to the
rulings referred to herein, this case is REMANDED to the Court of Appeals for the
determination, with all deliberate dispatch, of the amount of damages due Talisay-Silay
Milling Co., Inc. and Talisay-Silay Industrial Cooperative Association, Inc. considering
that this litigation among the parties has already lasted more that twenty-eight (28) years.
The rest of the Decision of the Court of Appeals is hereby AFFIRMED. Cost against
respondents.
CEO OCAMPO
Page 383 of 528

346 G.A. Machineries, Inc. v. Yaptinchay | Gutierrez, Jr. defects presupposes that the thing sold is the same thing delivered but with hidden
G.R. No. L-30965, November 29, 1983 | 126 SCRA 78 defects.
• Consequently, the 6-month prescriptive period under Article 1571 of the Civil Code
FACTS is not applicable.
• Appellant G.A. Machineries, Inc. (GAMI), through its agent, sold to Appellee
Horacio Yaptinchay, owner of the freight hauling business styled ‘Hi-Way Express’ YES.
a Fordson Diesel Engine at the price of P7,590.00. This was subject to the • Captain Garcia found that the original motor number of the engine was tampered as
representation relied upon by appellant that the engine was brand new. shown by the presence of fragmentary numbers which appeared in the engine.
• Within the week after its delivery, the engine started to have a series of malfunctions • Captain Garcia positively stated the fragmentary numeral to be a numeral or a
which necessitated successive trips to GAMI’s repair shop. However, the number but in the absence of key portions, he could not positively identify the exact
malfunctioning persisted. On inspection, Yaptinchay’s mechanic noticed a worn out number. He discounted the possibility that such fragmentary numerals could be
screw which made Yaptinchay suspicious about the age of the engine. He then mere scratches. He also did not categorically state that any molecular pressure could
wrote GAMI a letter protesting that the engine was not brand-new as represented. have caused the fragmentary number.
• After the repeatedly recurring defects and continued failure of GAMI to put the
engine in good operating condition, Yaptinchay sought the assistance of PC NO. The award of actual damages is not warranted by the evidence on record.
Criminal Investigation Service to check on the authenticity of the serial number of • The engine delivered was not brand-new. GAMI committed a breach of contract.
the engine. Tests revealed that the original motor number of the engine was The misrepresentation of the quality of the engine is tantamount to fraud or bad
tampered. Further inquiries from the Manila Trading Company disclosed that, unlike faith. The return of the purchase price with legal interest from the date of purchase
Yaptinchay’s engine whose body and injection pump were painted with 2 different is justified.
colors, brand-new engines are painted with only 1 color all over. • The fact that the defendant does not dispute the amount of this kind of damages
• Yaptinchay made demands for indemnification for damages and eventually does not necessarily imply that the other party outright is entitled to the award of
instituted the present suit. damages.
• GAMI interposed prescription of the action, denied the imputation of • Article 2200 of the Civil Code entitles the respondent to recover as compensatory
misrepresentation, and disputed the propriety and amount of damages claimed. damages not only the value of the loss suffered but also prospective profits. Article
• TC ruled in favor of Yaptinchay, ordering GAMI to pay actual damages of 2201 entitles the respondent to recover all damages which may be attributed to the
P54,000.48. CA affirmed. non-performance of the obligation. However, in order to recover this kind of
damages, plaintiff must prove his case. The injured party must produce the best
ISSUES & ARGUMENTS evidence of which his case is susceptible and if that evidence warrants the inference
• W/N the cause of action against appellant had already prescribed at the time that he has been damaged by the loss of profits which he might with reasonable
the complaint was filed in the TC. certainty have anticipated but for the defendant’s wrongful act, he is entitled to
• W/N the factual findings of both TC and CA as regards the engine are recover.
supported by evidence. • In this case, the award of actual damages of P54,000.88 covers the probable income
• W/N the award of damages was justified considering the evidence on record. which respondent failed to realize because of the breach of contract. However, the
evidence presented is insufficient to be considered within the purview of ‘best
HOLDING & RATIO DECIDENDI evidence’. The document merely shows that every time a truck travels, Yaptinchay
earns P369.88. This is multiplied by the number of trips which the truck was unable
NO. The 6-month prescriptive period under Article 1571 of the Civil Code is not to make. To prove actual damages, it would have been easy to present the average
applicable. actual profits realized by the other freight trucks plying the Manila-Baguio route.
• The main thrust of the complaint is the contention that the engine delivered by
GAMI was not brand-new, contrary to its representations. Instead of a brand-new Decision modified. The award of actual damages is deleted.
engine, another engine which was not brand new was delivered resulting in the
damages sought to be recovered.
• Therefore, the complaint was for breach of contract of sale, rather than breach of
warranty against hidden defects. Action for breach of warranty against hidden
TIN OCAMPO-TAN
Page 384 of 528

347 China Airlines Limited vs. Court of Appeals CAL Manila who had sent a negative reply to CAL San Francisco's request for
G.R. 94590|July 29, 1992|Feliciano confirmation without first consulting Ocampo's passenger reservation card. Another
employee or representative of CAL Manila offered private respondent
FACTS: compensation for actual expenses incurred by him due to his inability to board the
• Manuel J. Ocampo bought, through the Ultraman Travel Agency, a round-trip ticket CAL 18 May 1979 flight from San Francisco.
for Manila-San Francisco-Manila from petitioner China Airlines Limited ("CAL"). • TC dismissed the complaint and ruled in favor of CAL and the CA reversed the
The ticket purchased was a GV-10, or a Group Tour, ticket for which Ocampo paid decision
a special discounted (reduced) price of P6,063.00. A Group Tour ticket is issued to ISSUES:
members of a group of at least ten (10) passengers travelling for a minimum of W/N CAL was in bad faith and therefore liable for damages?
fourteen (14) days and for a maximum of thirty-five (35) days. It is a condition of a
Group Tour ticket that the holder thereof must stay in the place of destination (in RATIO:
this case, the United States), for at least fourteen (14) but not exceeding thirty-five CAL is liable for damages but it was not attended by bad faith
(35) days. The portion of the ticket covering the return trip may be used only after CAL Taipei had confirmed as early as 14 May 1979 the Taipei-Manila sector of Private
expiration of fourteen (14) days counted from the date of arrival at the place of respondent's return trip, public respondent Court of Appeals considered CAL San
destination; beyond the thirty-five (35) allowable days, the return trip ticket is no Francisco's refusal to board private respondent as an act of bad faith, and awarded
longer valid. private respondent the large amounts he sought by way of moral and exemplary damages
• Ocampo, however, wanted to leave for Manila earlier than 24 May 1979 because he totalling P400,000.00.
had several business meetings scheduled to be held here prior to 24 May 1979 and We consider that private respondent was able to show that petitioner CAL had indeed
because of his desire to attend to his wife's and son's forthcoming departure for confirmed a seat for Mr. Ocampo on the 18 May 1979 flight from San Francisco-
Europe scheduled on 24 May 1979. Honolulu (and all the way to Manila). We agree, therefore, with the Court of Appeals
• Ocampo sought to make special arrangements, through Ultraman Travel Agency, that petitioner CAL had breached its contract of carriage with private respondent by
with CAL Manila for a change in schedule. The travel agency was, according to such failure or refusal to board him on that flight.
respondent Ocampo, assured that the necessary adjustments would be made and We are not, however, persuaded that that breach of contractual obligation had been
that Mr. Ocampo could definitely take the CAL flight from San Francisco on 18 attended by bad faith or malice or gross negligence amounting to bad faith. To the
May 1979. contrary, it appears to the Court that petitioner CAL had exercised diligent efforts to
• Ocampo left Manila for San Francisco's on 9 May 1979 and arrived in San Francisco effect the change of schedule which it apparently had earlier stated to private respondent
also on the same day. Next day, he proceeded to CAL San Francisco' office to (prior to his departure from Manila) it would carry out. There was clearly a concerted
confirm his revised return flight schedule. CAL San Francisco, however, declined to effort among the involved CAL offices as shown by the flow of telexes from one to the
confirm his return flight, since the date indicated on the ticket was not 18 May 1979 others.
but rather 24 May 1979. Mr. Ocampo, however, apprised CAL San Francisco about
the special arrangement that he had requested from CAL Manila. CAL San The last two (2) telexes sent by CAL Manila to CAL San Francisco on 17 May and 18
Francisco contacted CAL Manila by telex requesting verification of the revised May 1979 were presumably received by CAL San Francisco in time to have relayed to
schedule for respondent Ocampo. CAL San Francisco, however, received a negative respondent Ocampo his acceptance as a passenger on the CAL flight out of San
reply from CAL Manila. Francisco scheduled for 18 May 1979. Again, however, we do not believe that
• Ocampo persisted in his efforts to book himself on the CAL San Francisco- respondent Ocampo had convincingly shown that the employees of petitioner CAL were
Honolulu flight on 18 May 1979. By telephone, he contacted his private secretary in motivated by personal malice or bad faith, or that there was patently negligence so gross
Manila to make the necessary inquiry and verification at CAL Manila. His secretary as to amount to bad faith. Bad faith under the law is not presumed; it must be
later telephoned back to inform him that CAL Manila would forthwith send a established by clear and convincing evidence.
communication to CAL San Francisco to correct the situation. With that
information, respondent Ocampo proceeded once more to CAL San Francisco and Based on Art. 2201 and 2220 the law distinguishes a contractual breach effected in good
left his telephone number and address where he could be contacted upon receipt of faith from one attended by bad faith. Where in breaching the contract, the defendant is
confirmation from CAL Manila. not shown to have acted fraudulently or in bad faith, liability for damages is limited to
• CAL San Francisco never sent any notice to private respondent. the natural and probable consequences of the breach of the obligation and which the
• Upon arrival in Manila, respondent Ocampo demanded an explanation from CAL parties had foreseen or could reasonably have foreseen; and in that case, such liability
Manila. He was told candidly that a mistake had been committed by an employee of would not include liability for moral and exemplary damages. 9 Under Article 2232 of the
Page 385 of 528
Civil Code, in a contractual or quasi-contractual relationship, exemplary damages may be
awarded only if the defendant had acted in "a wanton, fraudulent, reckless, oppressive or
malevolent manner." We are unable to so characterize the behavior here shown of the
employees of CAL Manila and of CAL San Francisco. Thus, we believe and so hold that
the damages recoverable by respondent Ocampo are limited to the peso value of the
Philippine Airlines ticket it had purchased for his return flight from San Francisco; and
reasonable expenses occasioned to private respondent by reason of the delay in his
return San Francisco-Manila trip — exercising the Court's discretion, we believe that for
such expenses, US$1,500.00 would be a reasonable amount — plus attorney's fees in the
amount of P15,000.00, considering that respondent Ocampo was ultimately compelled to
litigate his claim against petitioner.
WHEREFORE, the Decision of the Court of Appeals dated 25 July 1990 is hereby
REVERSED and SET ASIDE. A new judgment is hereby ENTERED requiring
petitioner to pay private respondent Ocampo the Philippine Peso equivalent of
US$2,101.00, at the rate of exchange prevailing at the time of payment thereof, as
reasonable compensatory damages, plus attorney's fees in the amount of P15,000.00 and
costs. Petitioner's counterclaim before the trial court is hereby DISMISSED.
JAVIN OMPOC
Page 386 of 528

348 Consolidated Dairy Products Co. vs. CA| Quisumbing cost equals P1,022,472.59. It was obligated to pay by virtue of its CBA with its
G.R. No. 100401 August 24, 1992 employees.
• According to Art. 2200 of the NCC, indemnification for damages shall comprehend
not only the value of the loss suffered, but also that of the profits which the obligee
FACTS failed to obtain.
• In 1956, Consolidated Dairy Products Co. of Seattle agreed with Santiago Syjuco • Standard Can’s profit for the last 5 years of its operation was P8,107,931.13 and it
Inc. to form Consolidated Philippines Inc. to bring Darigold milk and other dairy argued that it would have earned as much for the terminated 5 years more of the
products to the Phils. 51% was owned by Consolidated Seattle and 49% was owned contract. However, the Court said that the more reasonable amount would be based
by Syjuco Inc. Consolidated Seattle granted exclusive right to the tradename on average profits. This amount multiplied by five is P5,205,478.80.
Darigold to Consolidated Phils. • Award on inventory losses was properly awarded by the appellate court. Standard
• Initially, Consolidated Phils. imported its can requirements from the US. But due to Can incurred inventory losses due to cans which rusted and could not have been
economic conditions in this country, it began sourcing locally. In 1959, it entered in disposed of, administrative expenses connected with the cost of the cans, cost of
a 10-yr contract with private respondent Standard Can Company. raw materials and depreciated portion of the machinery all amounting to
• In 1966, Dairy Export Company (Dexco), a subsidiary of Consolidated Seattle, P1,150,197.80. These losses were due to the cancellation of the can supply contract
started to do business in the Philippines. It even held its very own office in before its agreed expiration date. It is only right that defendants be held liable for
Consolidated Phils.’ building. them.
• In 1968, Standard, Consolidated Phils and Dexco entered into a memorandum of • There is no doubt that the breach committed by the petitioners was made in a
agreement to extend the can supply contract until 1981. wanton and fraudulent manner. There was no reason for petitioners to terminate the
• In 1974, Consolidated Seattle transferred the right to the tradename Marigold to can supply contract with Standard. The latter was purposely organized for the
Dexco. It also offered Syjuco that it could sell its share or buy Syjuco’s, or benefit of Consolidated Philippines. Neither was there a need to close Consolidated
Consolidated Phils. may file bankruptcy. Syjuco chose to sell its share. Subsequently, Philippines because Consolidated Seattle had all the intentions of continuing its
Consolidated Phils. was dissolved. business only this time to be undertaken by its sole subsidiary, Dexco to the
• Before Consolidated Phils. was dissolved, however, Dexco already took over the prejudice of Standard. Where a defendant violates a contract with plaintiff, the court
marketing activities and selling of Marigold. may award exemplary damages if the defendant acted in a wanton, fraudulent,
• Even earlier, Consolidated Phils. cancelled its contract with Standard Can. It reckless, oppressive and malevolent manner (Art. 2232, Civil Code).
resulted in the cessation of its operations. Standard can is now claiming against • The claim for attorney's fees of 25% percent of all recoveries is unconscionable. It is
Consolidated Seattle and Dexco for the separation pay of the employees and hereby reduced to 15%.
unrealized profits.
• RTC ruled in favor of Standard Can and CA affirmed in toto.
ISSUES & ARGUMENTS
• W/N the determination of the actual damages was proper
The computation for unrealized profits modified but all other awards affirmed.
• First, the court noted that the damages claimed by private respondents do not refer
to claims which were already due from the can supply contract. The claims here are
for damages caused by the fraudulent termination by petitioners of the can supply
contract four (4) years before the end of its term and for such a short notice.
• Regarding the separation pay, evidence supports that the amount actually paid by
Standard Can to the separated employee is P929,520.54 plus 10% production pay MARICE PACHECO
Page 387 of 528

349 People v. Degoma| Feliciano, J.
G.R. Nos. 89404-05 May 22, 1992 |
FACTS
• Efren Degoma and Mariano D. Taborda were charged and convicted of the crime
of Robbery with Homicide. They were sentenced to reclusion perpetua and to
jointly and severally indemnify the owners of the Tagbilaran friendly Bazaar the sum
of P200.00 and the equivalent of $300.00, indemnify the heirs of late Alexander
Parilla in the sum of P36,000.00 for his death, P200,000.00 moral damages, P 87,
947.94 for actual expenses, and P,5,000 for atty’s fees.
• Only Mariano D. Taborda appealed the case.
ISSUES & ARGUMENTS

• W/N the lower court erred in the award of damages
The lower court overlooked certain evidentiary facts in its award of damages.
In delict, the defendant is liable for all damages which are the natural and probable
consequences of the act or omission complained of. To seek recovery for actually
damages, it is necessary to prove with reasonable degree of certainty, premised upon
competent proof and on the best evidence obtainable by the injured party, the actual
amount of loss. Courts cannot assume and rely on speculation or guesswork.
The court a quo’s award of actual damages in the amount of P87,947.94 is not sustained
by a review of the evidence of record. The court can only give credence to those
supported by receipt and which appear to have been genuinely incurred in connection
with the death, wake or burial of the victim. The court cannot take into consideration
expenses incurred before the death of the victim or those incurred after a considerable
lapse of time from his burial and do not have any relation to the death, wake or burial of
the victim. The court cannot take into consideration those expenses incurred for purely
aesthetic or social purposes, such as the lining with marble of the tomb of the victim;
those which appear to have been modified to show an increase in the amount of
expenditure; those which could not reasonably be itemized or determined to have been
incurred in connection with the death, wake or burial of the victim; those which were not
in fact shouldered by the immediate heirs of the victim, those which would nonetheless
have been incurred despite the death, wake or burial of the victim, the death, wake or
burial being merely incidental. The court puts the gross expenses proved at P10,275.85.
The court offsets the amount of P4,600.00 representing the alms received, leaving the
amount of P3,775.85 as the actual amount of loss. The moral damages are unexplained
and unsupported, though incapable of pecuniary estimation, the court considered it
proper to reduce it to P10,000.00. The Court increased the amount of indemnity to
P50,000.00 in line with present jurisprudence. VP PADILLA
Page 388 of 528

350 Hualam Construction and Dev’t Corp. v. CA | Davide Jr.
G.R. No. 85466, October 16, 1992 | 214 SCRA 612
FACTS
• Private respondent State Investment House is the owner of State Center Building at
333 Juan Luna St., Binondo, Manila it is divided into several office condominium
units for sale or lease.
• Private respondent entered into a contract to sell on 22 Sept. 1983 with petitioner
for unit 1505 for total price of P622,653.71 with down payment of P128,111.02
payable in 4 installments and 6 monthly installments of P5218 for aircon rental and
monthly amortization P11,590.46 for 60 monts.
• Contract provides for a clause giving automatic nullification of contract upon non-
payment of installment or interest and makes vendee an intruder upon nullification
of contract due to non-payment
• Petitioner failed to pay despite repeated demands the accumulated downpayment,
installments, utility charges and other assessments. Private respondent filed a
complaint for ejectment in MTC of Manila.
• On 11 Sept. 1986 petitioner failed to appear, upon motion private respondent was
allowed to present evidence ex-parte. MTC rendered a decision in favor of private
respondents ordering petitioner to pay P161,478.41 and P5000.00 as attorney’s fees
and costs. Possession was restored to private respondents and personal properties
of petitioner was levied
ISSUES & ARGUMENTS

• W/N Petitioners needed to file supersedeas bond to stay execution
Petition denied
• The damages recoverable in forcible entry or unlawful detainer refer to rent or fair
rental value.
• Petitioners admit that adjudged amount by MTC includes unpaid downpayment and
installments, clause 12 of contract to sell treats paid installments and downpayment
as rentals upon forfeiture.
• Ruling of respondent Court is erroneous in holding that supersedeas bond must
cover whole amount, nonetheless filing of a supersedeas bond to cover that portion
representing the unpaid downpayments and installments was necessary to stay the
execution of judgment, this is a mandatory requirement.
CHRIS PALARCA
Page 389 of 528

351 Araos et. al. (petitioners) vs. Court of Appeals and Jovan Land,
Inc.(respondents)
232 SCRA 770
FACTS:
• Petitioners are lessees of a ten-door apartment building located in Manila, which
they have been occupying for some 25 years. The building was originally owned by
one Vivien B. Bernardino with whom the petitioners had a written contract of lease
which expired on 31 January 1988. Nevertheless, after this period, the petitioners
peacefully occupied their respective units and the lessor continued to collect
monthly rentals from the petitioners despite the absence of a written contract.
• On 11 July 1991, the apartment was sold to private respondent Jovan Land, Inc.
Three days after, or on 15 July 1991, demands to vacate the units the petitioners and
other lessees were occupying were made simultaneously by Bernardino and the
private respondent. When the demands went unheeded, ten separate cases for
unlawful detainer were filed against the petitioners and other lessees by the private
respondent.
• The MeTC rendered a joint Judgment holding that the contracts between the lessor
and the lessees provided for a lease on a month-to-month basis and, in the light of
Article 1687 in relation to Article 1670 of the Civil Code, that the lease period had
expired. Accordingly, it ordered the defendants to vacate the premises and to pay
respondents.
• This order was later on affirmed by the CA, reversing the decision of the RTC.
ISSUES & ARGUMENTS:

Propriety and validity of the increase in the monthly rates of rentals as decreed by the
MeTC and sustained by the Court of Appeals.

The rule is settled that in forcible entry or unlawful detainer cases, the only damage that
can be recovered is the fair rental value or the reasonable compensation for the use and
occupation of the leased property. The reason for this is that in such cases, the only issue
raised in ejectment cases is that of rightful possession; hence, the damages which could
be recovered are those which the plaintiff could have sustained as a mere possessor, or
those caused by the loss of the use and occupation of the property, and not the damages
which he may have suffered but which have no direct relation to his loss of material
possession.
BYRON PEREZ
Page 390 of 528

352 Asuncion vs. Evangelista| Puno No
GR 133491, October 13, 1999 | • The claim for compensatory damages in favor of Evnagelista cannot be given as it is
based solely on amounts as specified in a schedule given by Evangelista who was not
FACTS even present during the transactions in the schedule. Such exhibit was self serving
• Evangelista was the owner of empire farms. In order to raise capital for the and hearsay
operations of the farms, he entered personally into several loan agreements with • Also, claim for compensatory damages based on the value of the property
various institutions. Due to his defaulting in the payments of these loans, they foreclosed is not allowed as it runs contrary to the nature of recission. If he seeks to
ballooned amounting to 6 million pesos rescind the contract, he can no longer claim the amount Asuncion was supposed to
• As a result of this, Asuncion and Evangelista entered into a Memorandum of pay. The effect of granting damages for the foreclosure would be that you are still
Agreement where Asuncion agrees to assume all the liabilities of Evangelista and in requiring Asuncion to pay his obligation but Evangelista will no longer transfer the
turn Evangelista is to cede to him his share on Empire Farms its lands which were property as it has already been foreclosed.
mortgaged to secure the loans. • Asuncion may also not claim for damages for the amounts he had already paid as
• Although Asuncion had already paid some P3000000 of his obligation in the MOA, recission seeks mutual restitution. This however has been rendered impossible as
Evangelista still had not transferred the properties. Later on, Asuncion stopped Evangelista can no longer be restored to the management and conrol of empire
making payments for the loans which caused the foreclosure of the properties. farms considering that its holdings had already been foreclosed.
Asuncion filed for Recission of the contract.
• Trial Court and CA ruled that Asuncion was guilty because the contract was actually
a contract of sale and so Asuncion first had to make good his obligaton before
Evangelista would transfer the properties
ISSUES & ARGUMENTS

• W/N the MOA was a contract of sale?
• W/N Asuncion first reneged on the obligation?
• W/N Evangelista is entitled to damages? Asuncion?
No
• The MOA was in the nature of a reciprocal obligaton in that both parties both had
certain obligations to fulfill regarding the rehabilitation of Empire Farms. It was not
a simple isolated sale of the properties of Evangelista.
No
• Asuncion had already paid several amounts in fulfillment of his obligations in the
MOA and yet Evangelista still failed to transfer the property. Evangelista’s insistence
that Asuncion execute an assumption of mortgage before making the deed of sale of
the properties is untenable as the mortgage will follow the property notwithstanding
the absence of the assumption of mortgage. Also, Evangelista’s claim that Asuncion
was the one who breached for his failure to assume the loans cannot be given
credence as he had already substantially complied with the obligation when he
stopped making payments because of Evangelista’s failure to comply with his
obligations.
JAN PORTER
Page 391 of 528

353 Woodchild Holdings v. Roxas Electric & Construction | Callejo, Sr. difference between the original cost of construction and the increase thereon,
G.R. 140667 | August 12, 2004 conformably to Article 1170 of the New Civil Code.
FACTS (b) Yes. Petitioner lost the amount of P3,900,000 by way of unearned income
• Respondent owned 2 parcels of land both covered by TCTs. A portion of Lot 1 from the lease of the property to the Ponderosa Leather Goods Company. The
abutted Lot 2 and was a dirt road accessing Sumulong highway. At a special respondent is liable to the petitioner for the said amount, under Articles 2200
meeting, the Board of Directors of respondent authorized the corporation through and 2201 of the New Civil Code:
its president, Roberto Roxas, to SELL Lot 2. Art. 2200. Indemnification for damages shall comprehend not only the
• Petitioner wanted to buy Lot 2 where it wanted to build a warehouse, and a portion value of the loss suffered, but also that of the profits which the obligee failed to
of Lot 1 to allow its 45-foot container van to readily enter and leave its property. Its obtain.
president, Jonathan Dy, wrote a letter to Roxas offering to buy Lot 2. The offer was Art. 2201. In contracts and quasi-contracts, the damages for which the
accepted. obligor who acted in good faith is liable shall be those that are the
• On Sept. 5, 1991, a Deed of Absolute Sale was executed and receipt of P5,000,000 natural and probable consequences of the breach of the obligation, and
was acknowledged by Roxas. Petitioner was given a right of way from the highway which the parties have foreseen or could have reasonably foreseen at
to the property, and that in the event that the same be insufficient, the vendor the time the obligation was constituted.
agrees to sell more. The vendor undertook to eject the squatters within 2 weeks In case of fraud, bad faith, malice or wanton attitude, the obligor shall
from the signing of the Deed. be responsible for all damages which may be reasonably attributed to
• On Sept. 10, 1991, Wimbeco Builders Inc. (WBI) offered to construct the the non-performance of the obligation.
warehouse for P8,649,000, with construction commencing Oct. 1, 1991 and
turnover of the warehouse on Feb. 29, 1992. The offer was accepted by petitioner
but construction was not commenced until April 1992 after a renegotiation in the
light of the expiration of the period contemplated. The construction commenced
without a building permit.
• On Sept. 16, 1991, Ponderosa Leather Goods Co. confirmed its lease of the
warehouse to be constructed. Ponderosa emphasized the need for the warehouse
to be ready for occupancy before April 1, 1992.
ISSUES & ARGUMENTS
W/N respondents are liable for (a) the delay in the construction of the
warehouse, and (b) for unearned income from the lease agreement with
Ponderosa.

(a) Yes. Petitioner could not be expected to file its application for a building
permit before April 1992 because the squatters were still occupying the
property. Because of the respondent's failure to cause their eviction as agreed
upon, the petitioner's contractor failed to commence the construction of the
warehouse in October 1991 for the agreed price of P8,649,000. In the
meantime, costs of construction materials spiraled. Under the construction
contract entered into between the petitioner and the contractor, the petitioner
was obliged to pay P11,804,160, including the additional work costing
P1,441,500, or a net increase of P1,712,980. The respondent is liable for the
AYEN QUA
Page 392 of 528

354 GSIS v. CA | Romero attainment could do." "It does not mean state of absolute helplessness, but inability
G.R. No. 117572 January 29, 1998 | 285 SCRA 430 to do substantially all material acts necessary to prosecution of an occupation for
remuneration or profit in substantially customary and usual manner."
FACTS • The Court has construed permanent total disability as the "lack of ability to follow
continuously some substantially gainful occupation without serious discomfort or
• Rosa Balais worked for the NHA since 1952. On December 1989 she was diagnosed pain and without material injury or danger to life." 16 It is, therefore, clear from
to be suffering from Subarachnoid Hmorrhage Secondary to Ruptured Aneurysm. established jurisprudence that the loss of one's earning capacity determines the
• After undergoing craniotomy, she was finally discharged from the hospital January disability compensation one is entitled to.
20, 1990. Despite her operation, Rosa could not perform her duties as efficiently as • It is also important to note that Rosa was constrained to retire the age of 62 years
she had done prior to her illness. This forced her to retire early from the because of her impaired physical condition. This is another indication that her
government service on March 1, 1990 at the age of sixty-two (62) years. disability is permanent and total. As held by this Court, "the fact of an employee's
• In the same month, she claimed from GSIS benefits. She was granted such under disability is placed beyond question with the approval of the employee's optional
Temporary Total Disability (TTD) and was subsequently converted to Permanent retirement, for such is authorized only when the employee is physically incapable to
Partial Diability (PPD) render sound and efficient service' . . . ."
• Rosa again applied for conversion of her classification to Permanent Total Disability • Rosa has been employed with the NHA for 38 years with an unblemished record
(PTD). She was denied of this because the results of her physical examination and who was compelled to retire on account of her worsening condition. Denying
conducted on June 5, 1990 did not satisfy the criteria for permanent total disability. that conversion would indeed subvert the salutary intentions the law in favor of the
worker
ISSUE & ARGUMENTS
W/N Rosa is entitled to conversion of benefits.
• It is true that the degree of Rosa’s physical condition at the time of her retirement
was not considered as permanent total disability, yet, it cannot be denied that her
condition subsequently worsened after her head operation and consequent
retirement. In fact, she suffered afterwards from some ailments like headaches,
dizziness, weakness, inability to properly sleep, inability to walk without support and
failure to regain her memory. All these circumstances ineluctably demonstrate the
seriousness of her condition, contrary to the claim of petitioner. More than that, it
was also undisputed that private respondent was made to take her medication for
life.
• A person's disability may not manifest fully at one precise moment in time but
rather over a period of time. It is possible that an injury which at first was
considered to be temporary may later on become permanent or one who suffers a
partial disability becomes totally and permanently disabled from the same cause.
• This Court has ruled that "disability should not be understood more on its medical
significance but on the loss of earning capacity." Rosa’s persistent illness indeed
forced her to retire early which, in turn, resulted in her unemployment, and loss of
earning capacity.
• Jurisprudence shows that disability is intimately related to one's earning capacity.,
"permanent total disability means disablement of an employee to earn wages in the
same kind of work, or work of a similar nature that she was trained for or
CHESKA RESPICIO
accustomed to perform, or any kind of work which a person of her mentality
Page 393 of 528
355 PNB vs. Pujol | Bellosillo and that private respondent applied for a "Combination Deposit Plan" where
G.R. No. 126152 September 28, 1999 checks issued against the Current Account of the drawer shall be charged
automatically against the latter's Savings Account if her funds in the Current
FACTS Account be insufficient to cover her checks. There was also no question that
• Lily S. Pujol opened with petitioner Philippine National Bank an account the Savings Account passbook of respondent Pujol contained the printed
denominated as "Combo Account," a combination of Savings Account and words "Combo Deposit Plan" without qualification or condition that it would
Current Account in private respondent's business name "Pujol Trading," under take effect only after submission of certain requirements. Although petitioner
which checks drawn against private respondent's checking account could be presented evidence before the trial court to prove that the arrangement was
charged against her Savings Account should the funds in her Current Account not yet operational at the time respondent Pujol issued the two (2) checks, it
be insufficient to cover the value of her checks. Hence, private respondent was failed to prove that she had actual knowledge that it was not yet operational at
issued by petitioner a passbook on the front cover of which was typewritten the the time she issued the checks considering that the passbook in her Savings
words "Combo Deposit Plan." Account already indicated the words "Combo Deposit Plan." Hence,
• On 23 October 1990, private respondent issued a check in the amount of respondent Pujol had justifiable reason to believe, based on the description in
P30,000.00 in favor of her daughter-in-law, Dr. Charisse M. Pujol. When issued her passbook, that her accounts were effectively covered by the arrangement
and presented for payment, private respondent had sufficient funds in her during the issuance of the checks. Either by its own deliberate act, or its
Savings Account. However, petitioner dishonored her check allegedly for negligence in causing the "Combo Deposit Plan" to be placed in the passbook,
insufficiency of funds and debited her account with P250.00 as penalty petitioner is considered estopped to deny the existence of and perfection of the
charge.On 24 October 1990 private respondent issued another check in the combination deposit agreement with respondent Pujol. Estoppel in pais or
amount of P30,000.00 in favor of her daughter, Ms. Venus P. De Ocampo. equitable estoppel arises when one, by his acts, representations or admissions,
When issued and presented for payment petitioner had sufficient funds in her or by his silence when he ought to speak out, intentionally or through culpable
Savings Account. But, this notwithstanding, petitioner dishonored her check negligence, induces another to believe certain facts to exist and such other
for insufficiency of funds and debited her account with P250.00 as penalty rightfully relies and acts on such belief so that he will be prejudiced if the
charge. On 4 November 1990, after realizing its mistake, petitioner accepted former is permitted to deny the existence of such facts.
and honored the second check for P30,000.00 and re-credited to private • This Court has ruled that a bank is under obligation to treat the accounts of its
respondent's account the P250.00 previously debited as penalty depositors with meticulous care whether such account consists only of a few
• Private respondent Lily S. Pujol filed with the Regional Trial Court of Pasig hundred pesos or of millions of pesos. Responsibility arising from negligence
City a complaint for moral and exemplary damages against petitioner for in the performance of every kind of obligation is demandable. While
dishonoring her checks despite sufficiency of her funds in the bank. petitioner's negligence in this case may not have been attended with malice and
• On 27 September 1994 the trial court rendered a decision ordering petitioner to bad faith, nevertheless, it caused serious anxiety, embarrassment and
pay private respondent Pujol moral damages of P100,000.00 and attorney's fees humiliation to private respondent Lily S. Pujol for which she is entitled to
of P20,000.00. It found that private respondent suffered mental anguish and recover reasonable moral damages. 7 In the case of Leopoldo Araneta v. Bank of
besmirched reputation as a result of the dishonor of her checks, and that being America 8 we held that it can hardly be possible that a customer's check can be
a former member of the judiciary who was expected to be the embodiment of wrongfully refused payment without some impeachment of his credit which
integrity and good behavior, she was subjected to embarrassment due to the must in fact be an actual injury, although he cannot, from the nature of the
erroneous dishonor of her checks by petitioner.The Court of Appeals affirmed case, furnish independent and distinct proof thereof.
in toto the decision of the trial court. • Damages are not intended to enrich the complainant at the expense of the
defendant, and there is no hard-and-fast rule in the determination of what
ISSUES AND ARGUMENTS: would be a fair amount of moral damages since each case must be governed by
its own peculiar facts. The yardstick should be that it is not palpably and
W/N: PNB IS LIABLE FOR DAMAGES TO THE PETITIONER scandalously excessive. In this case, the award of P100,000.00 is reasonable
considering the reputation and social standing of private respondent Pujol and
applying our rulings in similar cases involving banks negligence with regard to
HOLDING & RATION DECIDENDI the accounts of their depositors. The award of attorney's fees in the amount of
P20,000.00 is proper for respondent Pujol was compelled to litigate to protect
• Petitioner does not dispute the fact that private respondent Pujol maintained a
her interest.
Savings Account as well as a Current Account with its Mandaluyong Branch
Page 394 of 528
• WHEREFORE, the petition is DENIED and the Decision of the Court of
Appeals which affirmed the award by the Regional Trial Court of Pasig City of
moral damages of P100,000.00 and attorney's fees of P20,000.00 in favor of
private respondent Lily S. Pujol is AFFIRMED. Costs against petitioner.
DEANNE REYES
Page 395 of 528

356 FORTUNE EXPRESS, INC vs COURT OF APPEALS, PAULIE necessary precautions would be taken, petitioner did nothing to protect the safety of
U.CAORONG, and minor childrenYASSER KING CAORONG, ROSE HEINNI its passengers.
and PRINCE ALEXANDER, all surnamed CAORONG, and represented by
their mother PAULIE U. CAORONG | G.R. No. 119756 March 18, 1999 | • Simple precautionary measures to protect the safety of passengers, such as frisking
MENDOZA, J.: | passengers and inspecting their baggages, preferably with non-intrusive gadgets such
as metal detectors, before allowing them on board could have been employed
FACTS without violating the passenger's constitutional rights.
• Petitioner is a bus company in northern Mindanao. The private respondent are the
widow of Atty. Caorong and their children. • As for the amount of damages: Art. 1764 of the Civil Code, in relation to Art. 2206
thereof, provides for the payment of indemnity for the death of passengers caused
• A bus of petitioner figured in an accident with a jeepney, resulting in the death of by the breach of contract of carriage by a common carrier. Initially fixed in Art.
several passengers of such jeepney, including two Maranaos. It was later discovered in 2206 at P3,000.00, the amount of the said indemnity for death has through the years
an investigation that the owner of the jeepney was also a Maranao, who was also been gradually increased in view of the declining value of the peso. It is presently
planning to take revenge on the petitioner by burning some of its buses. fixed at P50,000.00. Private respondents are entitled to this amount.
• Actual Damages. The trial court found that the private respondents spent
• Subsequently, On a certain date, three armed Maranaos pretended to be passengers P30,000.00 for the wake and burial of Atty. Caorong. Since petitioner does not
and seized a bus of a petitioner. Among the passengers was Atty. Caorong. The question this finding of the trial court, it is liable to private respondent in the said
leader of the Maranaos then ordered the driver to stop the bus, and ordered the amount as actual damages.
passengers to get off the bus. • Moral Damages. The trial court found that private respondent suffered pain from
the death of her husband and worry on how to provide support for their minor
• Atty. Caorong also got off, but he then returned to retrieve something from the bus, children. The petitioner likewise does not question this finding of the trial court.
as the armed Maranaos were putting gasoline on the bus. Caorong was then shot, as Thus, in accordance with recent decisions of this Court, it was held that the
he was pleading to spare the life of the driver. The bus then burned, and although petitioner is liable to the private respondents in the amount of P100,000.00 as moral
some of the passengers were able to get Atty. Caorong out of the bus, he still died damages for the death of Atty. Caorong.
while undergoing operation. • Exemplary Damages. Despite warning that the Maranaos were planning to take
revenge against the petitioner by burning some of its buses, and contary to the
• The private respondents then brought this suit for breach of contract of carriage. assurance made by its operations manager that the necessary precautions would be
take, the petitioner and its employees did nothing to protect the safety of
ISSUES & ARGUMENTS passengers. Under the circumtances, it was deemed it reasonable to award private
respondents exemplary damages in the amount of P100,000.00.
Is the petitioner liable for damages? If yes, up to what extent? • Attorney's Fees. Pursuant to Art. 2208, attorney's fees may be recovered when, as in
the instant case, exemplary damages are awarded. The private respondents are
HOLDING & RATIO DECIDENDI entitled to attorney's fees in that amount of 50,000.
• Compensation for Loss of Earning Capacity. Art. 1764 of the Civil Code, in relation
Petitioner is liable for damages. to Art. 2206 thereof, provides that in addition to the indemnity for death arising
from the breach of contrtact of carriage by a common carrier, the "defendant shall
• Art. 1763 of the Civil Code provides that a common carrier is responsible for be liable for the loss of the earning capacity of the deceased, and the indemnity shall
injuries suffered by a passenger on account of wilfull acts of other passengers, if the be paid to the heirs of the latter." The petitioner is liable to the private respondents
employees of the common carrier could have prevented the act through the exercise in the said amount as a compensation for loss of earning capacity.
of the diligence of a good father of a family. In the present case, it is clear that
because of the negligence of petitioner's employees, the seizure of the bus by
Mananggolo and his men was made possible.
• Despite warning by the Philippine Constabulary at Cagayan de Oro that the
Maranaos were planning to take revenge on the petitioner by burning some of its
buses and the assurance of petitioner's operation manager, Diosdado Bravo, that the JR RUIZ
Page 396 of 528

357 People v. Balgos| PER CURIAM The trial court is correct in giving credence to Crisselle's testimony over that of the
No. 126115 , 26 January 2000 accused-appellant. Crisselle's testimony was simple, concise and cohesive. The trial court
is correct in observing that the victim recounted her ordeal in a "straightforward, clear
FACTS and convincing" manner. Her testimony is very typical of an innocent child whose virtue
has been violated.
In any case, even if his organ merely touched the "hole" of Crisselle's vagina, this already
♦ On 8 October 1995, at around 2:00 o'clock in the afternoon, Crisselle Fuentes went constitutes rape since the complete penetration of the penis into the female organ is not
to the house of the accused-appellant ( Alfonso Balgos) to play with Michelle and necessary.The mere introduction of the penis into the aperture of the female organ,
Waday, both surnamed Balgos and nieces of the Alfonso Balgos.Since the house of thereby touching the labia of the pudendum, already consummates the crime of rape.
the Balgos abuts a river, the three girls played near the window so they could watch Since the labia is the outer lip of the genital organ,accused-appellant's act of repeatedly
the small crabs wallowing in the said river. While they were playing, Balgos went up placing his organ in the "hole" of Crisselle's vagina was rape.
to Michelle and asked her to go outside and buy cheese curls. When Michelle left the The trial is court correct in imposing the supreme penalty of death on the accused-
house, Balgos directed her attention towards Crisselle. He opened the zipper of his appellant. Under Article 335 of the Revised Penal Code as amended by Section 11 of
pants.He then took Crisselle by the right forearm and made her hold his penis for a Republic Act No. 7659,the penalty of death shall be imposed if the crime of rape is
short time. When Michelle came back, Balgos asked her and Waday to go outside committed against a child below seven (7) years of age. In the present case, there is no
and buy more cheese curls. The two girls acceded and left Crisselle with Balgos. dispute that the victim was six (6) years of age when the accused-appellant had carnal
Whereupon, he closed the door and locked the same. He then removed Crisselle's knowledge with her. The victim's age was duly established by the prosecution, through
shorts and underwear, took off his own pants and brief and laid her down on a the testimony of the victim's mother, Criselda Fuentes, and further corroborated by
mat.5 Balgos next went on top of Crisselle and used his hand to direct his penis Crisselle's Certificate of Live Birth.
towards the opening of her vagina. He made a push and pull movement with his With respect to the award of damages, we have recently held that if the
penis into Crisselle's vagina which caused her to feel pain. However, Balgos ould not commission of rape is effectively qualified by any of the circumstances under
penetrate Crisselle's vagina and was only able to push his penis against the opening which the penalty of death may be imposed,the civil indemnity for the victim
of the same. Because of this, he re-positioned his penis and tried again to penetrate shall not be less than Seventy-Five Thousand Pesos (P75,000.00).Based on the
Crisselle's organ.9 Despite this effort, he still failed. Balgos stopped his bestial act foregoing judicial prescription, the trial court's award of Fifty Thousand Pesos
when he noticed through the window that Michelle and Waday were returning and (P50,000.00) as civil indemnity should be increased to Seventy-Five Thousand
were about to unlock the door. He then put on his pants, covered Crisselle with a Pesos (P75,000.00). Moreover, the victim is entitled to moral damages under
blanket and had her put on her underwear. When Michelle and Waday entered the Article 2219 of the Civil Code, without the necessity for pleading or proof of the
house, Crisselle was still covered with a blanket basis thereof. In line with current jurisprudence, accused appellant's victim is
♦ Criselle did not tell anybody about the incident. It was her older brother who told entitled to moral damages in the amount of Fifty Thousand Pesos (P50,000.00).
her parents and was later on confirmed by Michelle, Waday, and Criselle.
♦ Balgos claims that he merely put his finger into the victim’s vagina and that he did
not insert his penis.
♦ Trial Court: Convicted Baldos and imposed upon him the penalty of death. He is
likewise ordered to indemnify Criselle Fuentes P50,000 as civil damages.
ISSUES & ARGUMENTS
W/N the trial court was correct in convicting Balgos and in awarding civil damages to
the complainant Criselle Fuentes
YES.
DIKKI SIAN
Page 397 of 528

358 People vs. Quilatan | aggravating/ qualifying circumstances: x x x x when the victim is under
G.R. No. 132725. September 28, 2000| eighteen (18) years of age and the offender is a parent, ascendant, step-
parent, guardian, relative by consanguinity or affinity within the third civil
FACTS degree or the common-law spouse of the parent of the victim.
• ARMANDO QUILATAN was charged with incestuous rape and found guilty by • This Court observes that the trial court did not award any indemnity to Oliva for the
the trial court. He was sentenced to death. He is now before the SC on automatic physical abuse she suffered although it granted her P200,000.00 by way of moral and
review. exemplary damages.
• The trial court found him guilty of rape and sentenced him to death. He was also • In People v. Prades we reiterated that civil indemnity is mandatory upon the finding of
ordered to pay Oliva Quilatan P200,000.00 for moral and exemplary damages. the fact of rape; it is distinct from and should not be denominated as moral damages
Oliva is his daughter, then 13 years old. She was earlier raped by Quilatan on her which is based on different jural foundations and assessed by the court in the
11th birthday. exercise of sound discretion.
• In both instances of rape, Quilatan threatened to kill her and her siblings if she • If the crime of rape is committed or effectively qualified by any of the
would tell anyone what he was doing to her. circumstances under which the death penalty is authorized by law, the
• Elenita (the wife) narrated that there was another incident when she found the indemnity for the victim shall be P75,000.00.
accused no longer beside her. To her surprise she saw him lying beside their • Moral damages may additionally be awarded to the victim in the criminal
daughter Oliva. When she asked Armando the reason for his action he just kept proceeding, in such amount as the court may deem just, without the need for
silent. Offended by what she saw she dashed out of the house. The accused pleading or proof of the basis thereof as has heretofore been the practice. With
followed her and promised not to abuse Oliva again. Elenita then asked her regard to exemplary damages, the same may be awarded in criminal cases committed
daughter about her father's abuses and Oliva revealed her painful and harrowing with one or more aggravating circumstances. We find that the award by the trial
experiences, with her father. Elenita and Oliva went to the police station and filed court of moral and exemplary damages in the amount of P200,000.00 should be split
their sworn statements charging Armando Quilatan with rape. into P150,000.00 for moral damages and P50,000.00 for exemplary damages, the
• Dr. Vergara of the PNP Crime Laboratory at Camp Crame conducted a medical total amount of P200,000.00 for moral and exemplary damages not being disputed
examination of Oliva and found her hymen with shallow healed lacerations at 3 by the accused-appellant and is a factual matter binding on this Court.
o'clock and 6 o'clock positions, as well as a deep healed laceration at 9 o'clock WHEREFORE, the Decision of the Regional Trial Court of Pasig City finding the accused
position. ARMANDO QUILATAN guilty of Incestuous Rape and imposing on him the DEATH penalty
• The accused interposed denial for his defense. He alleged that when he was still is AFFIRMED, with the modification that the accused is ordered to pay his victim Oliva Quilatan the
working abroad he learned from a neighbor, whose name he could not recall, that amounts of P75,000.00 for civil indemnity and P200,000.00 for moral and exemplary damages.
his wife Elenita had a paramour. He confronted her sometime in March 1993 about
the P9,000.00 he was sending her every month. When she could not answer him he
slapped her. Immediately after, his wife together with all their children left him. But
two (2) months later they all returned to their house.
• Prosecution presented Oliva’s sister as eyewitness to the rape, she was then 8 years
old.
ISSUES & ARGUMENTS

• W/N damages awarded are enough
NO. There should be an additional fixed penalty of P75,000

• The Court finds that the accused was correctly meted the supreme penalty of
death, pursuant, to Art. 335 of the Revised Penal Code, as amended by RA
7659 and RA 8353, providing that the death penalty shall be imposed upon
the perpetrator if the crime of rape is committed with any of the following FRANK TAMARGO
Page 398 of 528

359 People v Willy Marquez | Ynares-Santiago • In order to justify the imposition of death, there must be independent
G.R. Nos. 137408-10. December 8, 2000 | evidence proving the age of the victim, other than the testimonies of
prosecution witnesses and the absence of denial by the accused. A duly
FACTS certified certificate of live birth accurately showing the complainant's age, or
• Willy Marquez (accused-appellant) is accused of raping 5-year-old girl, Maria some other official document or record such as a school record, has been
Christina Agustin, in the month of October 1997 in the banana plantation located at recognized as competent evidence. In the case at bar, while the informations
the back of the latter’s house in Bacayao, Guimba, Nueva Ecija. sufficiently allege the minority of Maria Cristina, the prosecution did not present
• It was only on January 8, 1998 when Maria Cristina confided to her mother in detail proof to substantiate the age of the victim, such as her birth certificate. This
what appellant did to her. Upon the advice of the police, Maria Cristina was becomes crucial considering that the prosecution must establish with moral certainty
brought by her parents to the Cabanatuan Provincial Hospital for medical that the victim was below seven (7) years old at the time of the rape, to justify the
examination. imposition of the death penalty. Accordingly, the penalty imposed on accused-
• Dr. Cora Lacurom, who examined Maria Cristina, found an old healed hymenal appellant must be reduced to reclusion perpetua.
laceration at 6:00 o’clock position, which could have been inflicted through forced
sexual intercourse committed in or about October 1997. ON DAMAGES:
• Denying he had anything to do with the offenses charged, Marquez testified that • The Court finally observes that while the trial court awarded moral damages, it did
during daytime for the whole month of October 1997 he was at his place of work not award any indemnity ex delicto. A civil indemnity of P50,000.00 is
hauling palay hay for Honofre Arenas at Barangay Bacayao, Guimba, Nueva Ecija. automatically given to the offended party without need of further evidence
He further claimed that he worked from Monday to Sunday from 6:00 a.m. to 5:30 other than the fact of rape. Consistent, therefore, with present case law which
p.m. and had a break time which lasted from 12:00 noon to 2:00 p.m. Aside from treats the imposition of civil indemnity as being mandatory upon the finding of rape,
hauling palay hay, accused-appellant’s work included pasturing the cows and cleaning accused-appellant should likewise be ordered to pay the amount of P50,000.00 for
their wastes. During break time, accused would hang out at the workshop (talyer) of each count of rape. This civil indemnity is distinct from and awarded in addition to
his employer’s brother-in-law which was just in front of his workplace. After his moral damages, the two being based on different jural foundations and assessed by
dismissal from work, he would proceed to the workshop of the brother-in-law in the court in the exercise of sound discretion.
order to learn. He alleged that said place of his work is 250 meters away from the • To curb the disturbing trend of a child being snatched from the cradle of
house of the victim and that the road is of muddy condition. innocence by some beast to sate its deviant sexual appetite, accused-
• RTC held the Marquez guilty beyond reasonable doubt and meted to him the appellant should likewise be made to pay exemplary damages, which, in line
penalty of death and likewise ordering him to pay offended party the amount of with prevailing jurisprudence, is pegged at P25,000.00, for each count of rape.
P150,000 as moral damages. • All in all, Marquez was paid to pay: P150,000 civil indemnity, P150,000 moral
damages and P75,000 exemplary damages.
ISSUES & ARGUMENTS

• W/N RTC erred in holding Marquez guilty of rape?
o Accused-appellant: the prosecution failed to state in the informations
the precise date of the commission of the alleged rapes.
NO. The exact date of the commission of the crime is not an essential element of
the crime.
• In any event, even if the information failed to allege with certainty the time of the
commission of the rapes, the defect, if any, was cured by the evidence presented
during trial and any objection based on this ground must be deemed waived as a
result of accused-appellant's failure to object before arraignment. His remedy was to
move either for a bill of particulars or for the quashal of the information on the
ground that it does not conform substantially to the prescribed form. TEL VIRTUDEZ
Page 399 of 528

360 Pedro Davila vs PAL| Art 2206 provides that the defendant shall be liable for the loss of earning
49 SCRA 497 28 February 1973| capacity of the deceased and indemnity shall be paid to the heirs of the
latter. This article is expressly made applicable to Art 1764 to the death of
FACTS the passenger caused by the breach of contract by a common carrier, as in
this case.
• On November 23, 1960 Pedro Davila Jr. boarded Philippine Airlines flight from
Manduriao, Iloilo to Manila. In computing a deceased’s life expectancy, the formula is: (2/3) x (80-age
• The plane had 33 passengers and it did not reach its destination. It crashed at Mt. at the time of death). In this case Jr was single at 30 years of age when he
Baco, Mindoro 1 Hour and 15 minutes after take-off. died. Using the formula, his normal life expectancy is 33 and 1/3 years.
• The parents were bothered by the conflicting news reports not until they received, However, his life expectancy must be reduced to 25 years since his medical
on December 19, a letter from PAL’s president informing them that their son died history shows that he had complained of and had been treated for
in the crash. It was only on December 29 that his body was recovered and taken backaches, chest pains and occasional feeling of tiredness.
back to Iloilo.
• The findings of the investigation conducted by the Civil Aeronautics Administration In this case, taking into consideration JR’s income from all 3 sources
showed that the prescribed Iloilo-Romblon-Manila Route was not followed as it together with his living expenses, a yearly living income of Php 7,800 is
being a straight line from Iloilo to Manila. left. This amount multiplied by 25 years (Php 195,000) is the amount
• The plane reported its position after take-off and again when it was abeam the which should be awarded to Jr’s parents.
Roxas homer. However, the pilot did not intercept airway Amber I as it was
supposed to. The pilot also did not report its position then although Romblon was
a compulsory checking point.
• This led to the conclusion that the plane deviated from the prescribed route by 32
miles to the west when it crashed at Mt. Baco. The reading of the altimeter when it
crashed was 6,800 ft from the assigned 6,000 ft required elevation.
• Due to this accident the Court of First Instance ruled in favor of Pedro Davila Jr.
and ordered PAL to pay the plaintiffs various sums of money: Php 6,000 for Jr’s
death; Php 60,000 for loss of earning capacity (Php 12,000 per annum times 5
years), Moral damages, Exemplary damages, Actual Damages and Attorney’s Fees.
ISSUES & ARGUMENTS
Whether or not the damages awarded to Davila was proper?
1. The Indemnity for Jr’s death.
Yes this must be increased. The CFI fixed the indemnity for his death in
the amount of Php 6,000. Pursuant to the current jurisprudence on the
point it should be increased to Php 12,000.
2. For the loss of earning capacity.
Yes. Jr. was getting his income from 3 different sources: (1) Php
8,400/year as manager of a radio station; Php 3,600/year as a lawyer and
junior partner in his father’s law firm and Php 3,000/year from farming. SATURDAY ALCISO
Page 400 of 528

361 People vs. Quilatan | aggravating/ qualifying circumstances: x x x x when the victim is under
G.R. No. 132725. September 28, 2000| eighteen (18) years of age and the offender is a parent, ascendant, step-
parent, guardian, relative by consanguinity or affinity within the third civil
FACTS degree or the common-law spouse of the parent of the victim.
• ARMANDO QUILATAN was charged with incestuous rape and found guilty by • This Court observes that the trial court did not award any indemnity to Oliva for the
the trial court. He was sentenced to death. He is now before the SC on automatic physical abuse she suffered although it granted her P200,000.00 by way of moral and
review. exemplary damages.
• The trial court found him guilty of rape and sentenced him to death. He was also • In People v. Prades we reiterated that civil indemnity is mandatory upon the finding of
ordered to pay Oliva Quilatan P200,000.00 for moral and exemplary damages. the fact of rape; it is distinct from and should not be denominated as moral damages
Oliva is his daughter, then 13 years old. She was earlier raped by Quilatan on her which is based on different jural foundations and assessed by the court in the
11th birthday. exercise of sound discretion.
• In both instances of rape, Quilatan threatened to kill her and her siblings if she • If the crime of rape is committed or effectively qualified by any of the
would tell anyone what he was doing to her. circumstances under which the death penalty is authorized by law, the
• Elenita (the wife) narrated that there was another incident when she found the indemnity for the victim shall be P75,000.00.
accused no longer beside her. To her surprise she saw him lying beside their • Moral damages may additionally be awarded to the victim in the criminal
daughter Oliva. When she asked Armando the reason for his action he just kept proceeding, in such amount as the court may deem just, without the need for
silent. Offended by what she saw she dashed out of the house. The accused pleading or proof of the basis thereof as has heretofore been the practice. With
followed her and promised not to abuse Oliva again. Elenita then asked her regard to exemplary damages, the same may be awarded in criminal cases committed
daughter about her father's abuses and Oliva revealed her painful and harrowing with one or more aggravating circumstances. We find that the award by the trial
experiences, with her father. Elenita and Oliva went to the police station and filed court of moral and exemplary damages in the amount of P200,000.00 should be split
their sworn statements charging Armando Quilatan with rape. into P150,000.00 for moral damages and P50,000.00 for exemplary damages, the
• Dr. Vergara of the PNP Crime Laboratory at Camp Crame conducted a medical total amount of P200,000.00 for moral and exemplary damages not being disputed
examination of Oliva and found her hymen with shallow healed lacerations at 3 by the accused-appellant and is a factual matter binding on this Court.
o'clock and 6 o'clock positions, as well as a deep healed laceration at 9 o'clock WHEREFORE, the Decision of the Regional Trial Court of Pasig City finding the accused
position. ARMANDO QUILATAN guilty of Incestuous Rape and imposing on him the DEATH penalty
• The accused interposed denial for his defense. He alleged that when he was still is AFFIRMED, with the modification that the accused is ordered to pay his victim Oliva Quilatan the
working abroad he learned from a neighbor, whose name he could not recall, that amounts of P75,000.00 for civil indemnity and P200,000.00 for moral and exemplary damages.
his wife Elenita had a paramour. He confronted her sometime in March 1993 about
the P9,000.00 he was sending her every month. When she could not answer him he
slapped her. Immediately after, his wife together with all their children left him. But
two (2) months later they all returned to their house.
• Prosecution presented Oliva’s sister as eyewitness to the rape, she was then 8 years
old.
ISSUES & ARGUMENTS

• W/N damages awarded are enough
NO. There should be an additional fixed penalty of P75,000

• The Court finds that the accused was correctly meted the supreme penalty of
death, pursuant, to Art. 335 of the Revised Penal Code, as amended by RA
7659 and RA 8353, providing that the death penalty shall be imposed upon
the perpetrator if the crime of rape is committed with any of the following FRANK TAMARGO
Page 401 of 528

362 PEOPLE vs. JEREZ
FACTS
Efren Jerez together with some companions went their way to look for carabao buyers in
Camarines Sur. They were able to obtain information from a tricycle driver of the
wherabouts of a prospective buyer in the name of Reynaldo Ochoa (49 years old).
Subsequently, the latter together with another buyer by the name Joselito Balbastro (35
years old) went with Jerez and company in order to check the status of the carabaos.
However, the two buyers by then, were stabbed to death by Jerez and company as they
were divested of certain possessions including a sum of money amounting to PhP
37,000.00. Jerez, et. al. were consequently charged and convicted of the crime of robbery
and double homicide. They were then ordered to pay the heirs of the victims PhP
100,000.00 (each of the victim), as cost of loss of earning capacity.
ISSUES & ARGUMENTS

Whether the order of payment was proper?

No. The lower court made a wrong computation. They must have rendered the order
using:
NET EARNING CAPACITY = Life Expectancy X (Gross Annual Income
Less: Necessary Life Expenses)
Where: Life Expectancy = 2/3 (80 – age at time of death)
Hence:
Jose = PhP 1,080,000.00
Reynaldo = PhP 756,000.00
JOY ADRANEDA
Page 402 of 528

363 Rosales vs. CA and MMTC| Quisumbing • In People v. Teehankee no award of compensation for loss of earning capacity was
G.R. No. 126395, November 16, 1998| granted to the heirs of a college freshman because there was no sufficient evidence
on record to show that the victim would eventually become a professional pilot. But
FACTS compensation should be allowed for loss of earning capacity resulting from the
• Metro Manila Transit Corporation (MMTC) is the operator of a fleet of passenger death of a minor who has not yet commenced employment or training for a specific
buses within the Metro Manila area. Musa was its driver assigned to MMTC Bus No. profession if sufficient evidence is presented to establish the amount thereof.
27. The spouses Rosales were parents of Liza Rosalie, a third-year high school • In sharp contrast with the situation obtaining in People v. Teehankee, where the
student at the University of the Philippines Integrated School. prosecution merely presented evidence to show the fact of the victim's graduation
• At around a quarter past one in the afternoon of August 9, 1986, MMTC Bus No. from high school and the fact of his enrollment in a flying school, spouses Rosales
27, which was driven by Musa at 25 kilometers per hour, hit Liza Rosalie who was did not content themselves with simply establishing Liza Rosalie's enrollment at UP
then crossing Katipunan Avenue in Quezon City. An eye witness said the girl was Integrated School. They presented evidence to show that Liza Rosalie was a good
already near the center of the street when the bus, then bound for the south, hit her. student, promising artist, and obedient child. She consistently performed well in her
She fell to the ground upon impact, rolled between the two front wheels of the bus, studies since grade school. A survey taken in 1984 when Liza Rosalie was twelve
and was run over by the left rear tires thereof. Her body was dragged several meters years old showed that she had good study habits and attitudes.
away from the point of impact. Liza Rosalie was taken to the Philippine Heart • Considering her good academic record, extra-curricular activities, and varied
Center, but efforts to revive her proved futile. interests, it is reasonable to assume that Liza Rosalie would have enjoyed a
• Pedro Musa was found guilty of reckless imprudence resulting in homicide and successful professional career had it not been for her untimely death. Hence,
sentenced to imprisonment by the RTC of Quezon City. it is proper that compensation for loss of earning capacity should be awarded
• The spouses Rosales filed an independent civil action for damages against MMTC, to her heirs in accordance with the formula established in decided cases for
Musa, MMTC Acting General Manager Conrado Tolentino, and the Government computing net earning capacity, to wit:
Service Insurance System (GSIS). Net Earning Capacity = Life Expectancy x [Gross Annual Income –
• On August 5, 1994, the Court of Appeals affirmed the decision of the trial court Necessary Living Expenses]
with the following modification of deleting the award of P150,000.00 as actual • Life expectancy is equivalent to two thirds (2/3) multiplied by the difference of
damages and awarding in lieu thereof the amount of P30,000.00 as death indemnity. eighty (80) and the age of the deceased. Since Liza Rosalie was 16 at the time of her
• The spouses Rosales filed a motion for reconsideration, which the appellate court, in death, her life expectancy was 44 more years. Her projected gross annual income,
a resolution, dated September 12, 1996, partly granted by increasing the indemnity computed based on the minimum wage for workers in the non-agricultural sector in
for the death of Liza Rosalie from P30,000.00 to P50,000.00. effect at the time of her death, then fixed at P37.00, is P14,630.46. Allowing for
necessary living expenses of fifty percent (50%) of her projected gross annual
ISSUES & ARGUMENTS income, her total net earning capacity amounts to P321,870.12.
W/N COMPENSATION FOR LOSS OF EARNING CAPACITY SHOULD BE

AWARDED TO LISA ROSALIE’S HEIRS?
YES, COMPENSATION FOR LOSS OF EARNING CAPACITY SHOULD BE

AWARDED
• Art. 2206 of the Civil Code provides that in addition to the indemnity for
death caused by a crime or quasi delict, the "defendant shall be liable for the
loss of the earning capacity of the deceased, and the indemnity shall be paid
to the heirs of the latter; . . ." Compensation of this nature is awarded not for loss
of earnings but for loss of capacity to earn money. Evidence must be presented that
the victim, if not yet employed at the time of death, was reasonably certain to
complete training for a specific profession.
BON ARCILLA
Page 403 of 528

364 People vs. Mendoza | Puno 3. Net earnings= P46, 980 x .50= P23,490
GR. No.134004, December 15, 2000 | 348 SCRA 318 4. Lost Earnings= 36.67 x P23,490= P861,378.30.
FACTS Petition DENIED. s

• While celebrating his bestfriend’s (Christoper Huidem) birthday, Antonio Antholyn
Laggui II met his death. At age 25, he was still at the prime of his life (contractual
worker at Coca-Cola earning P180.00 per day) and less than one year into his
marriage. The accused SPO3 Antonio Mendoza was behind his namesake’s untimely
demise.
• During the birthday inuman, Christopher and his brother Jonathan got into an
argument. To cool off, Christoper went to his aunt’s store, a few houses away.
Antonio then followed him.
• While Christopher and Antonio were talking with a neighbor named Andres
Rodriguez, the accused Mendoza approached them and lighted their faces with a
flashlight. Mendoza wore a bonnet, which left his singkit eyes and medyo matangos
nose exposed. Mendoza asked Antonio if he was a barangay tanod and whether he
was drunk. Antonio answered no and was shot thrice. (First was when he answered
no; second when he was on the ground; and third the accused came back for a final
shot.)
• Trial court convicted Mendoza of Murder and sentenced him to Reclusion Perpetua.
ISSUES & ARGUMENTS

• What is the proper award for damages due to lost earnings?
[Main issue is review of the conviction, which was affirmed by the Supreme
Court. In fact, actual, moral and exemplary damages were awarded.]
THE ACCUSED MENDOZA SHALL ALSO COMPENSATE THE HEIRS OF

ANTONIO FOR THE LATTER’S LOSS OF EARNING CAPACITY.
• The following factors should be considered in determining the compensable amount

of lost earnings: (1) the number of years for which the victim would have otherwise
lived; and (2) the rate of loss sustained by the heirs of the deceased. Jurisprudence
provides that the first factor, or life expectancy, is computed by applying the
formula (2/3 x [80 - age at death]) adopted in the American Expectancy Table of
Mortality of the Actuarial Combined Experience Table of Mortality. On the other
hand, the second factor is arrived at by multiplying the life expectancy by the net
earnings of the deceased (i.e. the total earnings less expenses necessary in the
creation of such earnings or income and less living and other incidental expenses).
The net earning is ordinarily pegged at 50% of the gross earnings.
• 1. Life Expectancy= 2/3 x (80-25) = 36.67
2. Gross Annual Salary= P180 x 261 days (working)= P46,980 DANI BOLONG
Page 404 of 528

365 People vs. Dubria | Gonzaga-Reyes
G.R. No. 138887, September 26, 2000 |
FACTS
• This is an appeal from the decision of the RTC of Iloilo City, , finding accused
Dubria guilty beyond reasonable doubt of murder and sentencing him to suffer the
penalty of reclusion perpetua
• The information against Dubria alleged …the above-named accused, armed with a
long homemade firearm and a sharp instrument with treachery and evident
premeditation, with deliberate intent and decided purpose to kill, did then and there
willfully, unlawfully, and feloniously attack, assault, shoot and hack one Patricio
Calambro, Jr. with said weapons he was then provided, hitting and inflicting upon
the latter, wounds on the different parts of his body which caused his death
thereafter.
• The RTC believed the testimony of three witnesses of the prosecution.
• Upon appeal, the SC affirmed the conviction.
• NOTE: Damages was NOT really an issue raised by the parties upon appeal, but the
SC itself noted that the RTC FORGOT to award said damages (loss of earning
capacity)
ISSUES & ARGUMENTS
• W/N damages for loss of earning capacity must be awarded
YEZZZIR!!! using the AETM [American Expectancy Table of Mortality]

• We note however that the trial court failed to award damages for the loss of earning
capacity of the victim to the heirs of the deceased Patricio Calambro, Jr. The fact
that the prosecution did not present documentary evidence to support its claim for
damages for loss of earning capacity of the deceased does not preclude recovery of
said damages.
• The testimony of the mother of the victim, Norma Calambro, as to the earning
capacity of her husband sufficiently establishes the basis for making such an award.
It was established that Patricio Calambro, Jr. was 23 years old at the time of his
death in 1996. His average monthly income was P3,000.00. Hence, in accordance
with the American Expectancy Table of Mortality that has been consistently
adopted by the Courtthe loss of his earning capacity is to be calculated as follows:
Award for = 2/3 [80-age at time of death]x[gross annual income-80%(GAI)]
Lost earnings
= 2/3 [80-23] x [P36,000.00 - 80%(P36,000.00)]
= (38) x (P7,200.00)
=P273,600.00
As such, accused-appellant should likewise be made to pay the amount of P273,600.00
representing the loss of earning capacity of the deceased.
GINO CAPATI
Page 405 of 528

366. Reformina vs. Tomol| Cuevas oIt will be noted that Act No. 2655 deals with interest on (1) loans; (2)
G.R. No. L-59096 October 11, 1985 |SCRA forbearances of any money, goods, or credits; and (3) rate allowed in
judgments.
FACTS • WHAT KIND OF JUDGMENT IS REFERRED TO UNDER THE
SAID LAW?
• In an action for Recovery of Damages for injury to Person and Loss of Property, o The judgments spoken of and referred to are Judgments in
judgment was rendered by the CFI of Cebu ordering defendants Shell and Michael litigations involving loans or forbearance of any 'money, goods
to pay jointly and severally Pacita F. Reformina and Francisco Reformina for or credits. Any other kind of monetary judgment which has
the losses and damages suffered by them with legal interest. nothing to do with, nor involving loans or forbearance of any
• Upon execution, the Reforminas claim that the "legal interest" should be at the rate money, goods or credits does not fall within the coverage of the
of twelve (12%) percent per annum, invoking in support of their aforesaid said law for it is not within the ambit of the authority granted to
submission, Central Bank of the Philippines Circular No. 41623. Shell and Michael the Central Bank.
insist that said legal interest should be at the rate of six (6%) percent per annum o A word or phrase in a statute is always used in association with other
only, pursuant to and by authority of Article 2209 of the New Civil Code in relation words or phrases and its meaning may thus be modified or restricted
to Articles 2210 and 2211 thereof. by the latter.
o Another formidable argument against the tenability of the Reforminas'
ISSUES & ARGUMENTS stand are the whereases of PD No. 11624 which brought about the
grant of authority to the Central Bank. The decision herein sought to
W/N, by way of legal interest, a judgment debtor should pay a judgment creditor be executed is one rendered in an Action for Damages for injury to
twelve (12%) percent per annum. persons and loss of property and does not involve any loan, much less
forbearances of any money, goods or credits
Reforminas: Central Bank Circular No. 416 includes the judgment sought to be
executed in this case, because it is covered by the second phrase “the rate allowed in The law applicable to the said case is Article 2209 of the New Civil Code25.
judgments in the absence of express contract as to such rate of interest ... " The above provision remains untouched despite the grant of authority to the
Central Bank by Act No. 2655, as amended. To make Central Bank Circular No. 416
HOLDING & RATIO DECIDENDI applicable to any case other than those specifically provided for by the Usury Law
will make the same of doubtful constitutionality since the Monetary Board will be
No. By way of legal interest, a judgment debtor should pay a judgment creditor only six exercising legislative functions which was beyond the intendment of P.D. No. 116.
(6%) percent per annum.
Separate Opinion
• Central Bank Circular No. 416 was issued and promulgated by the Monetary
Board pursuant to the authority granted to the Central Bank by P.D. No. 116,
which amended Act No. 2655, otherwise known as the Usury Law.
o Acting pursuant to this grant of authority, the Monetary Board 24 WHEREAS, the interest rate, together with other monetary and credit policy instruments, performs a vital
increased the rate of legal interest from that of six (6%) percent per role in mobilizing domestic savings and attracting capital resources into preferred areas of investments;
annum originally allowed under Section I of Act No. 2655 to twelve
(12%) percent per annum. WHEREAS, the monetary authorities have recognized the need to amend the present Usury. Law to allow for
more flexible interest rate ceilings that would be more responsive to the requirements of changing economic
conditions;
WHEREAS, the availability of adequate capital resources is, among other factors, a decisive element in the
achievement of the declared objective of accelerating the growth of the national economy
23By virtue of the authority granted to it under Section 1 of Act 2655, as amended, otherwise known as the
"Usury Law" the Monetary Board in its Resolution No. 1622 dated July 29, 1974, has prescribed that the rate of
interest for the loan or forbearance of any money, goods, or credits and the rate allowed in judgments, in the absence 25 Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the
of express contract as to such rate of interest, shall be twelve (12%) per cent per annum. This Circular shall indemnity for damages, there being no stipulation to the contrary, shall be the payment of interest agreed upon,
take effect immediately. (Italics supplied) and in the absence of stipulation, the legal interest which is six percent per annum.
Page 406 of 528
PLANA, J., concurring and dissenting:
o The Central Bank authority here in question is not premised on Section 1-a of
Act No. 2655 (Usury Law). Sec. 1-a cannot include a provision on interest to be
allowed in judgments, which is not the subject of contractual stipulations and
therefore cannot logically be made subject to interest (ceiling), which is all that
Sec. 1-a covers.
o Sec. 1 of the Usury Law is different from Sec. 1-a. The role of Section 1 is to fix
the specific rate of interest or legal interest (6%) to be charged. It also impliedly
delegates to the Central Bank the power to modify the said interest rate. Thus,
the interest rate shall be 6% per annum or "such rate as may be prescribed by
the Monetary Board of the Central Bank ..."
o The authority to change the legal interest that has been delegated to the
Central Bank under the quoted Section 1 is absolute and unqualified.
The determination of what the applicable interest rate shall be, as
distinguished from interest rate ceiling, is completely left to the judgment
of the Central Bank. In short, there is a total abdication of legislative
power, which renders the delegation void. Thus, it is unnecessary to make a
distinction between judgments in litigations involving loans and judgments in
litigations that have nothing to do with loans.
o The Central Bank authority to change the legal rate of interest allowed in
judgments is constitutionally defective; and incidentally, this vice also affects its
authority to change the legal interest of 6% per annum as to loans and
forbearance of money, goods or credits, as envisaged in Section 1 of the Usury
Law.
NICO CRISOLOGO
Page 407 of 528

367. Easter Shipping vs. CA and Mercantile Insurance
GR 97412, July 12, 1994/ Vitug
FACTS
• Two fiber drums of Vitamin B were shipped from Japan on SS Eastern Comet
owned by petitioners
• Upon inspection in Manila, it was found out that one of the drums spilled, the
rest of the shipment contents were fake. Defendant then sued petitioner in the
RTc which ruled in their favor
• The award include a stipulation asking them to pay 12 percent interest.
ISSUES & ARGUMENTS
W/N the interest on the claim should commence from the date of the filing of the
complaint at the rate of 12% contra from the date of decision only at a rate of 6%
6% from the decision

• When an obligation regardless of its source is breached, the contravenor can be
held liable for damages.
• The provisions under the civil code regarding “Damages” govern the measure
of recoverable damages.
• But, with regard to interest in the concept of actual and compensatory damages,
the rate of interest is imposed as follows:
o When the obligation is breached and it consists of the payment of a
sum of money like a loan or forbearance of money, the interest due is
what it was written in the stipulation. This interest shall ITSELF earn
legal interest from the time it is judicially demanded. In absence of
such stipulation, it is 12%
o When an obligation NOT in breach of a loan or forbearance of
money, an interest of said damages may be given at the discretion of
the court, at 6% per annum. There will be no interest though until the
claims are liquidated except when the demand can be proven with
reasonable certainty, and this interest shall run from the time judicially
or extrajudicially. But if there is no certainty, it will be counted from
the date of the judgment id made
• When the judgment reaches FINALLITY, there shall be a interest rate of 12%
until it is satisfied. This is equivalent to a forbearance
JOFEE CUENCA
Page 408 of 528

368. Atlantic Gulf and Pacific Co. of Manila, Inc. vs. CA, Carlito Castillo and • Petitioner overlooks the fact that private respondents specifically alleged that as a
Heirs of Castillo | Regalado result of petitioner’s dredging operations the soil of the former’s property “became
G.R. No. 114841-42, October 20, 1995 | infertile, salty, unproductive and unsuitable for agriculture.” They further averred
that petitioner’s heavy equipment “used to utilize respondents’ land as a depot or
FACTS parking lot of these equipment without paying any rent therefor.”
• It is therefore clearly apparent that petitioner was guilty of two culpable
• Sometime in 1982, petitioner company commenced the construction of a steel transgressions on the property rights of respondents, that is:
fabrication plant in the Municipality of Bauan, Batangas, necessitating dredging o 1. For the ruination of the agricultural fertility or utility of the soil of
their property
operations at the Batangas Bay in an area adjacent to the real property of private o 2. For the unauthorized use of said property as a dump rile or depot
respondents. for petitioner’s heavy equipment and trucks
• Private respondents alleged that during the on-going construction of its steel and • Consequently, both courts correctly awarded damages both for the destruction of
fabrication yard, petitioner's personnel and heavy equipment trespassed into the the land and for the unpaid rentals, or more correctly denominated, for the
adjacent parcels of land belonging to private respondents without their consent. reasonable value of its use and occupation of the premises.
These heavy equipment damaged big portions of private respondents' property
which were further used by petitioner as a depot or parking lots without paying any
rent therefor, nor does it appear from the records that such use of their land was
with the former's conformity.
• Respondents further alleged that as a result of the dredging operation of petitioner
company, the sea silt and water overflowed and were deposited upon their land.
Consequently, the said property which used to be agricultural lands principally
devoted to rice production and each averaging an annual net harvest of 75 cavans,
could no longer be planted with palay as the soil became infertile, salty,
unproductive and unsuitable for agriculture.
• Petitioner now moves for the reconsideration of the judgment promulgated in this
case on August 23, 1995 contending that private respondents are permitted
thereunder to recover damages twice for the same act of omission contrary to
Article 2177 of the Civil Code.
ISSUES & ARGUMENTS
• W/N RESPONDENTS WERE PERMITTED TO RECOVER DAMAGES

TWICE FOR THE SAME ACT?
Petitioner: Affirmance of the judgment of the trial court granting damages for both
the “damage proper to the land” and “rentals for the same property” runs afoul of
the proscription in Article 2177.
NO, THERE WAS NO RECOVERY OF DAMAGES TWICE FOR THE SAME

ACT BON ARCILLA
Page 409 of 528

369. Medel vs. CA | PARDO, J illegal and excessive, and that substantial payments made were applied to interest,
G.R. No. 131622, November 27, 1998 | 299 SCRA 481 penalties and other charges.
• the lower court declared that the due execution and genuineness of the four
FACTS promissory notes had been duly proved, and ruled that although the Usury Law had
been repealed, the interest charged by the plaintiffs on the loans was
• Servando Franco and Leticia Medel obtained a loan from Veronica R. Gonzales unconscionable. Hence, the trial court applied "the provision of the New Civil
who was engaged in the money lending business under the name "Gonzales Credit Code" that the "legal rate of interest for loan or forbearance of money, goods or
Enterprises", in the amount of P50,000.00, payable in two months. credit is 12% per annum."
• Veronica gave only the amount of P47,000.00, to the borrowers, as she retained
P3,000.00, as advance interest for one month at 6% per month. Then Servando and ISSUES & ARGUMENTS
Leticia executed a promissory note for P50,000.00, to evidence the loan, payable on
January 7, 1986. W/N the stipulated rate of interest at 5.5% per month on the loan in the sum of
• Servando and Liticia obtained from Veronica another loan in the amount of P500,000.00, that plaintiffs extended to the defendants is usurious.
P90,000.00. They received only P84,000.00, out of the proceeds of the loan.
• Servando and Leticia secured from Veronica still another loan in the amount of HOLDING & RATIO DECIDENDI
P300,000.00, maturing in one month, secured by a real estate mortgage over a
property belonging to Leticia Makalintal Yaptinchay, who issued a special power of No, it is not usurious. However it is unconscionable which makes the stipulation
attorney in favor of Leticia Medel, authorizing her to execute the mortgage. void.
• Like the previous loans, Servando and Medel failed to pay the third loan on
maturity. SC agreed with petitioners that the stipulated rate of interest at 5.5% per month on the
• Servando and Leticia with the latter's husband, Dr. Rafael Medel, consolidated all P500,000.00 loan is excessive, iniquitous, unconscionable and exorbitant.
their previous unpaid loans totaling P440,000.00, and sought from Veronica another
loan in the amount of P60,000.00, bringing their indebtedness to a total of However, SC can not consider the rate "usurious" because this Court has consistently
P500,000.00, payable on August 23, 1986. held that Circular No. 905 of the Central Bank, adopted on December 22, 1982, has
• Then they executed a promissory note which provides that indebtedness of expressly removed the interest ceilings prescribed by the Usury Law and that the Usury
P500,000 shall bear an interest at the rate of 5.5 PER CENT per month plus 2% service Law is now "legally inexistent
charge per annum
• Said promissory note likewise provides that should they fail to pay any amortization The interest at 5.5% per month, or 66% per annum, stipulated upon by the parties in the
or any portion thereof, all the other installments together with all interest accrued promissory note iniquitous or unconscionable, and, hence, contrary to morals ("contra
shall immediately be due and payable plus an additional amount equivalent to one per cent bonos mores"), if not against the law.
(1%) per month of the amount due and demandable as penalty charges in the form of liquidated The stipulation is void. The courts shall reduce equitably liquidated damages, whether
damages until fully paid; intended as an indemnity or a penalty if they are iniquitous or unconscionable.
• Plus there shall be a further sum of TWENTY FIVE PER CENT (25%) thereof in full, The Court of Appeals erred in upholding the stipulation of the parties. Rather, SC agreed
without deductions as Attorney's Fee whether actually incurred or not, of the total with the trial court that, under the circumstances, interest at 12% per annum, and an
amount due and demandable, exclusive of costs and judicial or extra judicial additional 1% a month penalty charge as liquidated damages may be more reasonable.
expenses
• Since the borrowers failed to pay, Veronica R. Gonzales, joined by her husband
Danilo G. Gonzales filed, a complaint for collection of the full amount of the loan
including interests and other charges.
• Defendants Leticia and Rafael Medel alleged that the loan was the transaction of
Leticia Yaptinchay, who executed a mortgage in favor of the plaintiffs over a parcel
of real estate situated in San Juan, Batangas
• They also averred that the interest rate is excessive at 5.5% per month with
additional service charge of 2% per annum, and penalty charge of 1% per month;
that the stipulation for attorney's fees of 25% of the amount due is unconscionable, TIN DIÑO
Page 410 of 528
370. David vs. Court of Appeals | Quisumbing, J. • On November 17, 1993, respondent Judge issued his Order denying the petitioner's
G.R. No. 115821, October 13, 1999 | 316 SCRA 710 motion for reconsideration.
• Petitioner elevated said Orders to the Court of Appeals in a petition for certiorari,
FACTS prohibition and mandamus. However, respondent appellate court dismissed the
• The parties do not dispute the facts in this case. The dispute concerns only the petition in a Decision dated May 30, 1994.
execution of the Decision of the Regional Trial Court of Manila, Branch 27, in Civil ISSUES & ARGUMENTS
Case No. 94781, dated October 31, 1979, as amended by an Order dated June 20,
1980.1âwphi1.nêt W/N respondent appellate court erred in affirming respondent Judge's order for
• The Regional Trial Court of Manila, Branch 27, with Judge Ricardo Diaz, then the payment of simple interest only rather than compounded interest.
presiding, issued a writ of attachment over real properties covered by TCT Nos.
80718 and 10289 of private respondents. In his Decision dated October 31, 1979, HOLDING & RATIO DECIDENDI
Judge Diaz ordered private respondent Afable to pay petitioner P66,500.00 plus However, this Court has already interpreted Article 2212, and defined standards for its
interest from July 24, 1974, until fully paid, plus P5,000.00 as attorney's fees, and to application in Philippine American Accident Insurance vs. Flores, 97 SCRA 811. As therein
pay the costs of suit. held, Article 2212 contemplates the presence of stipulated or conventional interest which
• On June 20, 1980, however, Judge Diaz issued an Order amending said Decision, so has accrued when demand was judicially made. In cases where no interest had been
that the legal rate of interest should be computed from January 4, 1966, instead of stipulated by the parties, as in the case of Philippine American Accident Insurance, no
from July 24, 1974. accrued conventional interest could further earn interest upon judicial demand. 5
• Respondent Afable appealed to the Court of Appeals and then to the Supreme • In the said case, we further held that when the judgment sought to be executed
Court. In both instances, the decision of the lower court was affirmed. Entries of ordered the payment of simple "legal interest" only and said nothing about payment
judgment were made and the record of the case was remanded to Branch 27, of compound interest, but the respondent judge orders payment of compound
presided at that time by respondent Judge Edgardo P. Cruz, for the final execution interest, then, he goes beyond the confines of a judgment which had become final.
of the Decision dated October 31, 1979, as amended by the Order dated June 20, • Note that in the case now before us, the Court of Appeals made the finding that ". .
1980. . no interest was stipulated by the parties. In the promissory note denominated as
• Upon petitioner's motion, respondent Judge issued an Alias Writ of Execution by "Compromise Agreement" signed by the private respondent which was duly
virtue of which respondent Sheriff Melchor P. Peña conducted a public auction. accepted by petitioner no interest was mentioned. In his complaint, petitioner
Sheriff Peña informed the petitioner that the total amount of the judgment is merely prayed that defendant be ordered to pay plaintiff the sum of P66,500.00 with
P270,940.52. The amount included a computation of simple interest. Petitioner, interest thereon at the legal rate from the date of the filing of the complaint until
however, claimed that the judgment award should be P3,027,238.50, because the fully paid. 6 Clearly here the Philippine American Accident Insurance ruling applies.
amount due ought to be based on compounded interest.
• Although the auctioned properties were sold to the petitioner, Sheriff Peña did not
issue the Certificate of Sale because there was an excess in the bid price in the
amount of P2,941,524.47, which the petitioner failed to pay despite notice. This
excess was computed by the Sheriff on the basis of petitioner's bid price of
P3,027,238.50 minus the amount of P270,940.52 computed in the judgment award.
• On May 18, 1993, petitioner filed a Motion praying that respondent Judge Cruz
issue an order directing respondent Sheriff Peña to prepare and execute a certificate
of sale in favor of the petitioner, placing therein the amount of the judgment as
P3,027,238.50, the amount he bid during the auction which he won. His reason is
that compound interest, which is allowed by Article 2212 of the Civil Code, should
apply in this case.
• On July 5, 1993, respondent Judge issued an Order denying petitioner's Motion
dated May 18, 1993,
• On August 11, 1993, petitioner moved for reconsideration of the Order dated July
5, 1993, reiterating his Motion dated May 18, 1993.
JAY DUHAYLONGSOD
Page 411 of 528
371. Ruiz vs. Court of Appeals | Puno nature of liquidated damages under Art. 2227 of the NCC, and is separated and
G.R. No. 146942, April 22, 2003 | 401 SCRA 410 distinct from interest payment.
• Although the courts may not at liberty ignore the freedom of the parties to agree on
FACTS such terms and conditions as they see fit that contravene neither law nor morals,
good customs, public order or public policy, a stipulated penalty, nevertheless, may
• Petitioner Corazon Ruiz is engaged in the business of buying and selling jewelry. She be equitably reduced if it is iniquitous or unconscionable.
obtained loans from private respondent Consuelo Torres on different occasions.
• These loans were consolidated under one promissory note and were secured by a
real estate mortgage. The promissory note provided for a monthly interest rate of
3%, a surcharge of 1%, and 10% compounded monthly interest on remaining
balance as of the maturity date.
• Petitioner obtained three more loans from private respondent and was secured by
P571,000 worth of jewelry.
• Petitioner was unable to make interest payments as she had difficulties collecting
from her clients in her jewelry business.
• Due to petitioner’s failure to pay the principal loan, as well as the interest payment,
private respondent demanded payment. When petitioner failed to pay, private
respondent sought the extrajudicial foreclosure of the real estate mortgage.
• Petitioner filed a complaint, with a prayer for the issuance of TRO to enjoin the
sheriff from proceeding with the foreclosure sale and to fix her indebtedness to
P706,000.
ISSUES & ARGUMENTS
W/N the rates of interests and surcharges on the obligation of petitioner to

private respondent are valid?
NO. INTEREST RATES ARE INVALID.

• SC affirmed the CA ruling, striking down as invalid the 10% compounded monthly
interest, the 10% surcharge per month stipulated in the promissory notes, and the
1% compounded monthly interest stipulated in another promissory note.
• The legal rate of interest of 12% per annum shall apply after the maturity dates of
the notes until full payment of the entire amount due.
• The only permissible rate of surcharge is 1% per month, without compounding.
• SC upheld the award of CA of attorney’s fees, reasonably reducing the stipulated
25% to 10% of the entire amount due.
• SC also equitably reduced the 3% per month or 36% per annum interest present in
all four promissory notes to 1% per month or 12% per annum interest.
• SC based its decision on the Medel, Garcia, Bautista, and Spouses Solangon cases.
• An interest of 12% per annum is deemed fair and reasonable.
• The 1% surcharge on the principal loan for every month of default is valid. This
surcharge or penalty stipulated in a loan agreement in case of default partakes of the
FRANCIS ESPIRITU
Page 412 of 528

372. Cuaton v. Salud | Ynares-Santiago per annum to be computed from default, i.e., from judicial or extrajudicial demand
G.R. No. 158382 January 27, 2004| 421 SCRA 278 under and subject to the provisions of Article 1169 23 of the Civil Code. x x x 3.
When the judgment of the court awarding a sum of money becomes final and
FACTS executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 12% per annum from such finality until its satisfaction,
• Petitioner Cuaton loaned P1M from Respondent Salud, which was secured by a this interim period being deemed to be by then an equivalent to a forbearance of
REM. After petitioner’s default, respondent, joined by her husband, instituted credit.
foreclosure proceedings for a REM against petitioner and his mother. • Applying the foregoing rules, the interest of 12% per annum imposed by the Court
• The RTC rendered a decision that the REM was void because it was executed by the (in lieu of the invalidated 10% and 8% per month interest rates) on the P1M loan
petitioner without expressly stating that he was merely acting as a representative of should be computed from the date of the execution of the loan on October 31,
his mother, in whose name the mortgaged lot was titled. Nevertheless, the RTC 1991 until finality of this decision. After the judgment becomes final and executory
ordered petitioner to pay the P1M loan plus interest amounting to P610K, until the obligation is satisfied, the amount due shall further earn interest at 12% per
representing interests of 10% and 8% per month for the period of Feb-Aug 1992. year.
• CA affirmed the RTC decision. Petitioner then filed a motion for partial
reconsideration with respect to the award of interest worth P610K, arguing that the
same was iniquitous and exorbitant. Motion denied.
ISSUES & ARGUMENTS
W/N the 8% and 10% MONTHLY interest rates imposed on the P1M loan
obligation of petitioner to respondent are valid.
NO. SUCH RATES ARE INIQUITOUS AND EXORBITANT. INTEREST

RATE REDUCED TO 12% PER ANNUM.
• Although the Usury Law is suspended, lenders have no authority to raise interest
rates to levels which will either enslave their borrowers or lead to a haemorrhaging
of their assets. The stipulated interest rates are illegal if they are unconscionable.
• Stipulations authorizing iniquitous or unconscionable interests are contrary to
morals, if not against the law. Under Art.1409 of the Civil Code, these contracts are
inexistent and void from the beginning. They cannot be ratified nor the right to set
up their illegality as a defense be waived.
• The SC has already declared unconscionable interest rates of 5.5% per month and
6% per month in previous cases for being excessive, iniquitous, unconscionable, and
exorbitant. In both cases, the interest rates were reduced to 12% per annum. In the
present case, the present 8% and 10% interest rates are even higher than those
previously invalidated by the Court. Accordingly, the reduction of the said rates to
12% per annum is fair and reasonable.
• The case of Eastern Shipping Lines, Inc. v. Court of Appeals, laid down the following
guidelines on the imposition of interest, to wit: 1. When the obligation is breached,
and it consists in the payment of a sum of money, i.e., a loan or forbearance of
money, the interest due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the time it is
judicially demanded. In the absence of stipulation, the rate of interest shall be 12% JOHN FADRIGO
Page 413 of 528

373. Commonwealth Insurance Corp vs. CA| Austria-Martinez
G.R. No. 130886. January 29, 2004|
FACTS
• RCBC granted 2 loans to Jigs Manufacturing (JIGS), 2.5M and Elba Industries
(ELBA), 1M.
• The loans were evidenced by promissory notes and secured by surety bonds
executed by Commonwealth Insurance Corp (CIC). The surety bonds totalled
P4,464,128.00
• JAGS and ELBA defaulted in their payment.
• RCBC made a written demand to CIC which in turn CIC made several payments,
2M in total.
• RCBC made a final demand on the balance but CIC ignored.
• RCBC filed a complaint against CIC. Trial Court ruled in favor of RCBC and
ordered CIC to pay the balance. The judgment made no pronouncement as to
interest.
• RCBC appealed to CA praying that CIC be made liable to pay interest.
• CA granted and added a 12% legal interest on the award.
ISSUES & ARGUMENTS

W/N CIC should be held liable to pay interest over and above its principal
obligation under the surety bonds issued by it?
YES. CIC is made to pay interest not on the basis of the surety bonds it issued
but on basis of it’s default in paying its obligation.
• It has been held that if a surety upon demand fails to pay, he can be held liable for
interest, even if in thus paying, its liability becomes more than the principal
obligation. The increased liability is not because of the contract but because of the
default and the necessity of judicial collection.
• As a general rule, a suretyshould not be made to pay more than its assumed
obligation under the surety bonds. However, CIC’s liability for the payment of
interest is not by reason of the suretyship agreement itself but because of the delay
in the payment of its obligation under the said agreement.
• CIC offered no valid excuse for not paying the balance of its principal obligation
when demanded by RCBC. Its failure to pay is unreasonable.
• The appellate court is correct in imposing 12% interest.
• When an obligation is breached, and it consists in the payment of a sum of money,
the interest due should be that which may have been stipulated in writing. Absence
of stipulation, the reate of interest shall be 12%.
• CIC’s obligation consists of a loan or forbearance of money. No interest has been
agreed upon in writing between CIC and RCBC. Rate of interest is 12% to be
computed from the time the extrajudicial demand was made. PAT FERNANDEZ
Page 414 of 528

374. DBP V. PEREZ properties covered by the mortgage contract was scheduled on October 30,
G.R. No. 148541 1985
FACTS ISSUES & ARGUMENTS
• On April 28, 1978, petitioner Development Bank of the Philippines (DBP) sent Whether the interest rate agreed upon by the parties in the new promissory note
a letter to respondent Bonita Perez, informing the latter of the approval of an is usurious?
industrial loan amounting to P214,000.00 for the acquisition of machinery and
equipment and for working capital, and an additional industrial loan amounting HELD
to P21,000.00 to cover unforeseen price escalation. YES.The CA held that under CB Circular No. 817, if the loan is secured by a registered
• On May 18, 1978, the respondents were made to sign four promissory notes real estate, the interest of eighteen percent (18%) is usurious. The petitioner, however,
covering the total amount of the loan, P235,000.00. Three promissory notes for argues that usury has become legally inexistent with the promulgation of CB Circular No.
P24,000.00, P48,000.00, and P142,000.00, respectively, were executed, totaling 905. It contends that the interest rate should be eighteen percent (18%), the interest rate
P214,000.00. These promissory notes were all due on August 31, 1988. A they agreed upon. For their part, the respondents argue that the Central Bank engaged in
fourth promissory note due on September 19, 1988 was, likewise, executed to self-legislation in enacting CB Circular No. 905.
cover the additional loan of P21,000.00. The promissory notes were to be paid We agree with the ruling of the CA. It is elementary that the laws in force at the time the
in equal quarterly amortizations and were secured by a mortgage contract contract was made generally govern the effectivity of its provision. We note that the new
covering real and personal properties. promissory note was executed on May 6, 1982, prior to the effectivity of CB Circular No.
• On September 6, 1978, the petitioner sent a letter to the respondents informing 905 on January 1, 1983. At that time, The Usury Law, Act No. 2655, as amended by
them of the terms for the payment of the P214,000.00 industrial loan. On Presidential Decree No. 116, was still in force and effect.
November 8, 1978, the petitioner sent another letter to the respondents Under the Usury Law, no person shall receive a rate of interest, including commissions,
informing them about the terms and conditions of their additional P21,000.00 premiums, fines and penalties, higher than twelve percent (12%) per annum or the
industrial loan. maximum rate prescribed by the Monetary Board for a loan secured by a mortgage upon
• Due to the respondents' failure to comply with their amortization payments, the real estate the title to which is duly registered.
petitioner decided to foreclose the mortgages that secured the obligation. In this case, by specific provision in the new promissory note, the restructured loan
However, in a Letter dated October 7, 1981, Mrs. Perez requested for a continued to be secured by the same mortgage contract executed on May 18, 1978 which
restructuring of their account due to difficulties they were encountering in covered real and personal properties of the respondents. We, therefore, find the
collecting receivables. eighteen percent (18%) interest rate plus the additional interest and penalty charges of
• On April 1, 1982, the petitioner informed the respondents that it had approved eighteen percent (18%) and eight percent (8%), respectively, to be highly usurious.
the restructuring of their accounts. The loan was restructured, and on May 6, In usurious loans, the entire obligation does not become void because of an agreement
1982, the respondents signed another promissory note in the amount of for usurious interest; the unpaid principal debt still stands and remains valid, but the
P231,000.00 at eighteen percent (18%) interest per annum, payable quarterly at stipulation as to the usurious interest is void. Consequently, the debt is to be considered
P12,553.27, over a period of ten years. without stipulation as to the interest. In the absence of an express stipulation as to the
• The first amortization was due on August 7, 1982, and the succeeding rate of interest, the legal rate at twelve percent (12%) per annum shall be imposed.
amortizations, every quarter thereafter. However, the respondents made their IN LIGHT OF THE FOREGOING, the assailed Decision dated February 28, 2001
first payment amounting to P15,000.00 only on April 20, 1983 or after the lapse of the Court of Appeals and Order dated June 11, 1993 of the Regional Trial Court,
of three quarters. Their second payment, which should have been paid on Makati City, Branch 145, are AFFIRMED WITH MODIFICATION. The case is
November 7, 1982, was made on December 2, 1983 and only in the amount of hereby REMANDED to the trial court for determination of the total amount of the
P5,000.00. The third payment was then made at the time when the ninth respondents' obligation according to the reduced interest rate of twelve percent (12%)
quarterly amortization should have been paid. After this, the respondents per annum.
completely stopped paying. The total payments they made after the restructure
of the loan amounted to P35,000.00 only.
• This failure to meet the quarterly amortization of the loan prompted the
petitioner to institute foreclosure proceedings on the mortgages. The sale of the
J.C. LERIT
Page 415 of 528
375. Landl & Company vs. Metrobank| Ynarez-Santiago ISSUES & ARGUMENTS .
G.R. No. 159622. July 30, 2004 W/N the RTC/CA erred in computing or imposing interests, attorney’s fees and
penalties against Landl.
FACTS
• Metrobank filed a complaint for sum of money against Landl and Company (Phil.) HOLDING & RATIO DECIDENDI
Inc. (Landl) and its directors. Metrobank alleged that Landl is engaged in the No, except the Service Charges and Attorney’s fees.
business of selling imported welding rods and alloys. On June 17, 1983, it opened
Commercial Letter of Credit with the bank, in the amount of US$19,606.77, which The first issue involves the amount of indebtedness prior to the imposition of
was equivalent to P218,733.92 in Philippine currency at the time the transaction was interest and penalty charges. The initial amount of the trust receipt of P218,733.92,
consummated. The letter of credit was opened to purchase various welding rods was reduced to P192,265.92 as of June 14, 1984, as per respondent’s Statement of
and electrodes. Landl put up a marginal deposit of P50,414.00 from the proceeds of Past Due Trust Receipt dated December 1, 1993. This amount presumably includes
a separate clean loan. the application of P35,000.00, the amount of petitioner Lucente’s Deed of
• As an additional security, and as a condition for the approval of Landl’s application Assignment, which amount was applied by respondent bank to petitioners’
for the opening of the commercial letter of credit, Metrobank required Landl’s obligation. No showing was made, however, that the P30,000.00 proceeds of the
Directors Llaban and Lucente to execute a Continuing Suretyship Agreement to the auction sale on July 31, 1985 was ever applied to the loan. Neither was the amount
extent of P400,000.00, excluding interest, in favor of the bank. Lucente also of P50,414.00, representing the marginal deposit made by petitioner corporation,
executed a Deed of Assignment in the amount of P35,000.00 in favor of the bank to deducted from the loan.
cover the amount of Landl’s obligation to the bank. Upon compliance with these
requisites, Metrobank opened an irrevocable letter of credit for the corporation. The net amount of the obligation, represented by Metrobank to be P292,172.23 as
• To secure the indebtedness of Landl, Metrobank required the execution of a Trust of April 17, 1986, would thus be P211,758.23.
Receipt in an amount equivalent to the letter of credit, on the condition that
petitioner corporation would hold the goods in trust for Metrobank, with the right To this principal amount must be imposed the following charges: (1) 19% interest
to sell the goods and the obligation to turn over to the bank the proceeds of the per annum, in keeping with the terms of the trust receipt;[16] and (2) 12% penalty
sale, if any. If the goods remained unsold, Landl had the further obligation to return per annum, collected based on the outstanding principal obligation plus unpaid
them to respondent bank on or before November 23, 1983. Upon arrival of the interest, again in keeping with the wording of the trust receipt.[17] It appearing that
goods in the Philippines, Landl took possession and custody thereof. petitioners have paid the interest and penalty charges until April 17, 1986, the
• Upon the maturity date of the trust receipt, Landl defaulted in the payment of its reckoning date for the computation of the foregoing charges must be April 18,
obligation to Metrobank and failed to turn over the goods to the latter. On July 24, 1986.
1984, the bank demanded that Landl, as entrustees, turn over the goods subject of
the trust receipt. On September 24, 1984, Landl turned over the subject goods to A perusal of the records reveals that the trial court and the Court of Appeals erred
the respondent bank. in imposing service charges upon the petitioners. No such stipulation is found in
• On July 31, 1985, in the presence of representatives of Landl and Metrobank, the the trust receipt. Moreover, the trial court and the Court of Appeals erred in
goods were sold at public auction. The goods were sold for P30,000.00 to computing attorney’s fees equivalent to 10% per annum, rather than 10% of the
Metrobank as the highest bidder. total amount due. There is no basis for compounding the interest annually, as the
• The proceeds of the auction sale were insufficient to completely satisfy petitioners’ trial court and Court of Appeals have done. This amount would be unconscionable.
outstanding obligation to Metrobank, notwithstanding the application of the time
deposit account of Lucente (Director of Landl). Accordingly, Metrobank demanded Doctrine:
that Landl and the Directors pay the remaining balance of their obligation. After If an obligation consists in the payment of a sum of money, the indemnity for
they failed to do so, the bank instituted the instant case to collect the said deficiency. damages shall be the amount stipulated by the parties as liquidated damages.
• RTC: In favor of Metrobank; Landl to pay the outstanding balance PLUS the If no liquidated damages had been stipulated by the parties, then the indemnity for
interest at the rate of 19% per annum; service charge at the rate of 2% per damages shall consist in the payment of the interest agreed upon and if there is no
annum starting; 10% per annum of the total amount due collectible by way of stipulation as to interest the indemnity shall be the payment of interest at six per
Attorney’s Fees; Litigation Expenses of P3,000.00 and to pay the cost of the cent (6%) per annum (Art. 2209).
suit; and (6) to pay penalty charge of 12% per annum. CA affirmed.
JON LINA
Page 416 of 528
376. CRISMINA GARMENTS, INC., petitioner, vs. COURT OF APPEAL AND from default, i.e., from judicial or extrajudicial demand under and subject to the
NORMA SIAPNO, respondents.|Panganiban provisions of Article 1169 of the Civil Code.
G.R. No. 128721. March 9, 1999|
2. When an obligation, not constituting a loan or forbearance of money, is
FACTS breached, an interest on the amount of damages awarded MAY be imposed at
the discretion of the court at the rate of 6% per annum. No interest, however,
• Crismina Garments entered into a contract for a piece of work for 20,762 girl’s shall be adjudged on unliquidated claims or damages except when or until the
denim pants with D’ Wilmar Garments, through its sole proprietress Norma Siapno demand can be established with reasonable certainty. Accordingly, where the
(PR). The contract amounted to Php76,410. demand is established with reasonable certainty, the interest shall begin to run from
• From Feb 1979- May 1979, PR sent 13 various deliveries to comply with the the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but
Petitioner’s orders. The delivery receipts are accepted and acknowledged to be in when such certainty cannot be so reasonably established at the time the demand is
good order condition. made, the interest shall begin to run only from the date the judgment of the court is
• Later, Crismina informed PR of the defective pants delivered. PR offered to take made (at which time the quantification of damages may be deemed to have been
delivery of the defective pants, however Crismina’s rep said the goods were good reasonably ascertained). The actual base for the computation of legal interest shall,
and PR just have to send back her check for P76,410. in any case, be xxx the amount finally adjudged.
• Because PR was actually then unpaid, PR sent a demand letter for the P76,410 and
payment within 10 days from receipt of such notice. Crismina countered that PR 3. When the judgment of the court awarding a sum of money becomes final
was liable for the value of the 6,164 damaged pants amounting to P49,925.51. and executory, the rate of legal interest, whether the case falls under paragraph 1
• PR filed a collection suit against Crismina. or paragraph 2, above, shall be 12% per annum from such finality until its
• RTC favored PR. CA affirmed RTC order but deleted the Atty’s fees. satisfaction, this interim period being deemed to be by then an equivalent to a
forbearance of credit.
ISSUES & ARGUMENTS
• Because the amount due in this case arose from a contract for a piece of work,
W/N it is proper to impose interest at the rate of twelve percent (12%) per annum not from a loan or forbearance of money, the legal interest of six percent (6%)
for an obligation that does not involve a loan or forbearance of money in the per annum should be applied. Furthermore, since the amount of the demand could
absence of stipulation of the parties? be established with certainty when the Complaint was filed, the six percent (6%)
interest should be computed from the filing of the said Complaint. But after the
HOLDING & RATIO DECIDENDI judgment becomes final and executory until the obligation is satisfied, the
interest should be reckoned at twelve percent (12%) per year.
INTEREST RATE for obligation not involving a loan or forbearance of money is 6%.
• Guidelines for the application of the proper interest rates: CA decision modified. 6% interest (pa) from filing of complaint and 12% legal
interest (pa) after the judgment has become final and executory until satisified.
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts,
delicts or quasi-delicts is breached, the contravenor can be held liable for
damages. The provisions under Title XVIII on ‘Damages’ of the Civil Code
govern in determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the interest due shall
itself earn legal interest from the time it is judicially demanded. In the absence of
stipulation, the rate of interest shall be 12% per annum (pa) to be computed DIANE LIPANA
Page 417 of 528

377. Manzanares v. Moreta | Torres
G.R. No. L-12306, October 22, 1918| 38 PHIL 823 • "Damage" has been defined by Escriche as the detriment, injury, or loss which are
occasioned by reason of fault of another in the property or person." Of whatsoever
FACTS nature the damage be, and from whatsoever cause it may proceed, the person who
has done the injury ought to repair it by an indemnity proportionate to his fault and
• A male child, 8 or 9 years of age, was killed through the negligence of the defendant to the loss caused thereby. Damnum (daño or a loss) must be shown to sustain an
in driving his [Moreta] automobile. action for damages.
• The mother of the dead boy is a widow, a poor washerwoman. She brings action • In order to give rise to the obligation imposed by this article of the Civil Code, the
against the defendant to recover damages for her loss in the amount of P5,000. coincidence of two distinct requisites is necessary, vis: (1) That there exist an injury
Without there having been tendered any special proof of the amount of damages or damage not originating in acts or omissions of the prejudiced person demanding
suffered, the trial court found the defendant responsible and condemned him to pay indemnification therefore; (2) that said injury or damage be caused by the fault or
to plaintiff the sum of P1,000. negligence of a person other than the sufferer. (12 Manresa, Comentarios al Codigo
• The decision of this Court handed down by Justice Torres, affirms the judgment of Civil, p. 604.)
the Court of First Instance. • The customary elements of damages must be shown. But in certain cases, the law
presumes a loss because of the impossibility of exact proof and computation in
respect to the amount of the loss sustained. In other words, the loss can be proved
ISSUES & ARGUMENTS either by evidence or by presumption.
• The right of action for death and the presumption in favor of compensation begin
W/N Moreta is liable for Damages? admitted, the difficulty of estimating in money the worth of a life should not keep a
court from judicially compensating the injured party as nearly as may be possible for
HOLDING & RATIO DECIDENDI the wrong. True, man is incapable of measuring exactly in the delicate scales of
justice the value of a human life. True, the feelings of a mother on seeing her little
YES. MORETA SHOULD PAY DAMAGES AMOUNTING P1000 son torn and mangled — expiring — dead — could never be assuaged with money.
ACCORDING TO THE TRIAL COURTS DECISION True, all the treasure in nature's vaults could not being to compensate a parent for
• If it were true that the Moreta was coming from the southern part of Solana Street, the loss of a beloved child. Nevertheless, within the bounds of human powers, the
and had to stop his car before crossing Real Street, because he had met vehicles negligent should make reparation for the loss.
which were going along the latter street or were coming from the opposite direction • The damages which would give the plaintiff in this case a right to recovery against
along Solana street, he should have adjusted the speed of the auto which he was the defendant are only the loss of support, or contributions thereto, which the son
operating until he had fully crossed Real Street and had completely reached a clear was accustomed to make to his mother from his earnings and of which she may
way on Solana Street. [Solona and Real streets are perpendicular] have been deprived by his death. But does the evidence introduced by the plaintiff
• But, as the child was run over by the auto precisely at the entrance of Solana Street, support her claim to recover such damages? We are of the opinion that it does not,
this accident could not have occurred, if the auto had been running at a slow speed, because she has not proven that her son was really earning the amount alleged in the
aside form the fact that the defendant, at the moment of crossing Real Street and complaint, nor any other sum whatever, no alleged in the complaint, nor any other
entering Solana Street, in a northward direction, could have seen the child in the act sum whatever, nor alleged in the complaint, nor any other sum whatever, no how
of crossing the latter street from the sidewalk on the right to that on the left much money he was earning by his work either in Arecibo or in San Juan during the
• Moreta should have slowed down and honked his horn. If these precautions were days immediately preceding his death or at any time. And we are of the opinion that
taken, the boy could have survived. this is a necessary requisite, because, as the Civil Code declares that recovery may be
had for the damage caused, the damages accruing to the plaintiff must be shown so
SEPARATE OPINION that the trial judge may have data on which to base his decision.
MALCOLM; Compensation for Human Life:
MORETA SHOULD NOT PAY P5000 BUT ONLY P1000 BECAUSE THE
PLAINTIFF COULD NOT SHOW ENOUGH EVIDENCE THAT THE
MIK MALANG
DEATH OF HER SON AMOUNTS TO P5000.
Page 418 of 528
378. Hugo Borromeo vs. MERALCO. |Avanceña negligence under article 1902 of the Civil Code, includes the two kinds of damages
G.R. No. L-18345, December 5, 1922|44 Phil. 165 specified in article 1106 of the same Code; to wit, damages for the loss actually
sustained and for the profit which the injured party may have failed to realized
FACTS • It appears that at the time of the accident, Borromeo was chief engineer of the
merchant steamer San Nicolas with a monthly salary of P375, and that having lost
• On the evening of April 10, 1920, electric car No. 203 of Manila Electric was his left foot, thereby necessitating the use of an artificial foot in order to be able to
running along M. H. del Pilar Street of the city of Manila, and on arriving at the walk, he can no longer be employed as a marine engineer on any vessel, and, as a
intersection of that street and Isaac Peral it stopped to receive passengers matter of fact, the Collector of Customs has refused to grant him a license to follow
• At that moment, Borromeo approached the car with his two children, 12 and 16 his profession as marine engineer. It also appears that he, who is 45 years old, has
years old, and putting his two children on board the car first, he proceeded to been engaged in this profession for sixteen years (since 1904), and that he knows no
follow, but in attempting to board he fell off and was dragged some distance by the other profession whereby he can earn his living. It is evident that this damage must
car, one of the rear wheels passing over his left foot also be indemnified
• As a result of this accident, Borromeo’s left foot was amputated, making it necessary • Borromeo’s incapacity to continue in the practice of his profession as marine
for him to use an artificial foot in order to be able to walk engineer has put an end to one of his activities and has certainly destroyed a source
• Borromeo then brought an action to recover from Manila Electric damages for the — the principal source — of his professional earnings in the future. Taking into
injury sustained by him by reason of the accident account the age of Borromeo and the salary he derived from this profession from
• The trial court sentenced Manila Electric to pay the sum of P5,400 with legal the exercise of which he has been deprived, the Court fix this future damage at
interest and did not provide for anything due to the loss of his left foot, which P2,000
incapacitated him from following his profession
• On appeal, the appellate court dismissed the same Judgment MODIFIED.
ISSUES & ARGUMENTS
W/N the damages for the loss of Borromeo’s left foot should be awarded?
YES, IT IS AN ERROR FOR THE TRIAL COURT NOT TO ALLOW

ANYTHING FOR THE LOSS OF THE LEFT FOOT, WHICH
INCAPACITATED BORROMEO FROM FOLLOWING HIS PROFESSION
• The Court accepts the finding of the trial court that Manila Electric is liable, and
that Borromeo’s fall was due entirely to the car having been suddenly set in motion
at the moment that he was about to board it, but without having gained a sure
footing on the running board, and that the subsequent loss of his left foot was due
to the carelessness and negligence of Manila Electric's employees in charge of car
No. 203 as supported by the evidence
• The sum of P5,400 awarded by the trial court as damages is made up to the expense
incurred for hospital, medicine, and physician's fees on account of this accident.
Although Borromeo asks for more on this account, the Court believes, after an
examination of the evidence, that this amount is really all that he is entitled to on
this account
• However, the trial court has not allowed Borromeo anything for the loss of his left
foot, which has incapacitated him from following his profession and the Court KATH MATIBAG
believes that this is an error. The obligation to indemnify for injury caused by
Page 419 of 528

379. Villa Rey Transit, Inc v. CA| Concepcion, J. HOLDING & RATIO DECIDENDI
G.R. No. L-25499 February 18, 1970 YES, it is proper.
Death and Permanent Incapacity In the case of Alcantara v. Surro, none of the parties had questioned the propriety of the
four-year basis adopted by the trial court in making its award of damages. Both parties
FACTS appealed, but only as regards the amount thereof. The plaintiffs assailed the non-inclusion,
in its computation, In fact in that case the Court held that: The determination of the
• An Izuzu First Class passenger bus owned and operated by the defendant, driven by indemnity to be awarded to the heirs of a deceased person has therefore no fixed basis.
Laureano Casim, left Lingayen, Pangasinan, for Manila. Among its paying Much is left to the discretion of the court considering the moral and material damages involved, and so it
passengers was the deceased, Policronio Quintos, Jr. who sat on the first seat, has been said that "(t)here can be no exact or uniform rule for measuring the value of a human life
second row, right side of the bus. and the measure of damages cannot be arrived at by precise mathematical calculation, but the amount
• At about 4:55 o'clock a.m. when the vehicle was nearing the northern approach of recoverable depends on the particular facts and circumstances of each case. The life expectancy of the
the Sadsaran Bridge, it frontally hit the rear side of a bullcart filled with hay. As a deceased or of the beneficiary, whichever is shorter, is an important factor. Other factors
result the end of a bamboo pole placed on top of the hayload and tied to the cart to that are usually considered are: (1) pecuniary loss to plaintiff or beneficiary; (2) loss of
hold it in place, hit the right side of the windshield of the bus. The protruding end support ; (3) loss of service; (4) loss of society; (5) mental suffering of beneficiaries ; and
of the bamboo pole, about 8 feet long from the rear of the bullcart, penetrated (6) medical and funeral expenses.
through the glass windshield and landed on the face of Policronio Quintos, Jr. who, Life expectancy is, not only relevant, but, also, an important element in fixing the amount
because of the impact, fell from his seat and was sprawled on the floor. The pole recoverable by private respondents herein. The Court of Appeals has not erred in basing
landed on his left eye and the bone of the left side of his face was fractured. the computation of petitioner's liability upon the life expectancy of Policronio Quintos,
• Notwithstanding medical assistance, Policronio Quintos, Jr. died due to traumatic Jr.
shock due to cerebral injuries. It has been consistently held that earning capacity, as an element of damages to one's
• The private respondents are the sisters and only surviving heirs of Quintos Jr., who estate for his death by wrongful act is necessarily his net earning capacity or his capacity
died single, leaving no descendants nor ascendants. Said respondents herein brought to acquire money, "less the necessary expense for his own living. Stated otherwise, the amount
this action against petitioner, for breach of the contract of carriage between said recoverable is not loss of the entire earning, but rather the loss of that portion of the
petitioner and the deceased Quintos, to recover the aggregate sum of P63,750.00 as earnings which the beneficiary would have received. In other words, only net earnings,
damages, including attorney's fees. not gross earning, are to be considered that is, the total of the earnings less expenses
• Petitioner contended that the mishap was due to a fortuitous event, but this necessary in the creation of such earnings or income and less living and other incidental
pretense was rejected by the trial court and the Court of Appeals, both of which expenses.
found that the accident and the death of Policronio had been due to the negligence
of the bus driver, for whom petitioner was liable under its contract of carriage with
the deceased.
• The Trial Court based the number of years by which the damages shall be
computed on the life expectancy of Quintos, which was placed at 33-1/3 years —
he being over 29 years of age (or around 30 years for purposes of computation) at
the time of his demise — by applying the formula (2/3 x [80-301 = life expectancy)
adopted in the American Expectancy Table of Mortality or the actuarial of
Combined Experience Table of Mortality.
• Petitioner maintains that the lower courts had erred in adopting said formula and in
not acting in accordance with Alcantara v. Surro in which the damages were
computed on a four year basis, despite the fact that the victim therein was 39 years
old, at the time of his death, and had a life expectancy of 28.90 years.
ISSUES & ARGUMENTS
W/N the amount of damages awarded is proper?

NINA MEIJA
Page 420 of 528
380. Salvador vs. People of the Philippines | Nachura Decision MODIFIED. CA affirmed.
G.R. No. 164266, July 23, 2008 |
FACTS
• Spouses Zuniga had three daughters: Marianne, Mary Ann, and Arlene. Mary Ann
was married to petitioner Salvador.
• The Zuniga family lived in one house. One bedroom for the spouses Zuniga, one
for Salvador and Mary Ann, and one for Marianne and Arlene.
• One day, the spouses Zuniga and Marianne went to Bulacan to attend the wake of
Ernesto’s mother. Arlene, Mary Ann, and her baby were left in the house.
Meanwhile, petitioner asked permission to attend a birthday party.
• At 4:30 in the morning, the spouses and Marianne arrived home. They found Arlene
dead with 21 stab wounds. Salvador acted strangely – he stayed in the sala and cried,
and later embraced Mary Ann telling her he was innocent.
• Among other circumstantial evidence, the court found Salvador guilty of homicide
his clothes were stained with Arlene’s blood, there was no forcible entry into the
house, and he was known to carry a balisong. Hence, he was sentenced to an
imprisonment and to indemnify the spouses Zuniga the amount of P50,000.00 for
the death of Arlene, and another P50,000.00 for moral damages.
• The CA affirmed. Hence, the present petition.
ISSUES & ARGUMENTS

_______________________________________________________________
W/N the award of damages if proper in this case.
NO ACTUAL DAMAGE. HOWEVER, THE AWARD OF MORAL AND

TEMPERATE DAMAGES IS IN ORDER.
• We affirm the award of P50,000.00 by way of indemnity ex delicto to the Zuniga
spouses. When death occurs as a result of a crime, the heirs of the deceased
are entitled to such amount as indemnity for death without need of any
evidence or proof of damages.
• The court likewise correctly awarded P50,000.00 as moral damages because of their
mental anguish and moral suffering caused by Arlene's death.
• The trial and appellate courts did not award actual damages, obviously because the
victim's heirs failed to present proof of the expenses they incurred. However, it has
been repeatedly held by this Court that where the amount of actual damages
cannot be determined because of the absence of receipts to prove the same,
temperate damages may be fixed at P25,000.00.
CHRISSIE MORAL
Page 421 of 528

381. Lopez vs PANAM | Bengzon Senate President Pro Tempore. International carriers like defendant know the prestige
G.R. No. L-22415, March 30, 1966| 16 SCRA 431 of such an office. For the Senate is not only the Upper Chamber of the Philippine
Congress, but the nation's treaty-ratifying body.
FACTS • Mrs. Maria J. Lopez, as wife of Senator Lopez, shared his prestige and therefore his
humiliation. In addition she suffered physical discomfort during the 13-hour trip.
• The Lopez family booked for first class accommodations with Pan American Apparently, Mrs. Lopez was severely sick with flu 2 months before the flight and the
World Ways (PAN-AM) through “Your Travel Guide” Agency for a flight from condition in the tourist class (e.g. seating spaces in the tourist class are quite
Tokyo to San Francisco. PAN-AM’s San Francisco head office confirmed the narrower than in first class, there being six seats to a row in the former as against
reservations. four to a row in the latter, and that in tourist class there is very little space for
• Upon arriving in Tokyo, first class accommodations were not granted to them by reclining in view of the closer distance between rows) caused her much discomfort
PAN-AM stating there were no reservations for them and that they have to take the and anxiety. Added to this, of course, was the painful thought that she was deprived
tourist class. Due to urgent business to be attended by the Lopez spouses in the US by defendant — after having paid for and expected the same — of the most
(Lopez being a senator at that time), they were constrained to take the tourist class suitable, place for her, the first class, where evidently the best of everything would
under protest. have been given her, the best seat, service, food and treatment. Such difference in
• As it turns out, another family (the Rufinos) booked first class accommodations comfort between first class and tourist class is too obvious to be recounted, is in fact
with PAN-AM together with the Lopez party but thereafter the Rufinos cancelled. the reason for the former's existence, and is recognized by the airline in charging a
An agent (Herranz) of “Your Travel Guide” Agency sent a telex message to PAN- higher fare for it and by the passengers in paying said higher rate Accordingly,
AM’s head office in San Francisco. In said message, however, Herranz mistakenly considering the totality of her suffering and humiliation, an award to Mrs. Maria J.
cancelled all the seats that had been reserved, that is, including those of Senator Lopez of P50,000.00 for moral damages will be reasonable.
Lopez and party. • Mr. and Mrs. Alfredo Montelibano, Jr., were travelling as immediate members of the
• Upon realizing the mistake, the said agent telexed the San Francisco office but the family of Senator Lopez. They formed part of the Senator's party as shown also by
latter could no longer reinstate the seats of the Lopezes. Herranz forgot about the the reservation cards of PAN-AM. As such they likewise shared his prestige and
matter and was not able to inform the Lopezes of the same. humiliation. Although defendant contends that a few weeks before the flight they
had asked their reservations to be charged from first class to tourist class — which
ISSUES & ARGUMENTS did not materialize due to alleged full booking in the tourist class — the same does
W/N the petitioners can recover moral damages from PAN-AM? If so, how to not mean they suffered no shared in having to take tourist class during the flight.
compute for the same? For by that time they had already been made to pay for first class seats and therefore
HOLDING & RATIO DECIDENDI to expect first class accommodations. As stated, it is one thing to take the tourist
class by free choice; a far different thing to be compelled to take it notwithstanding
PAN-AM liable for moral damages. (also exemplary and attorney’s fees) having paid for first class seats. Plaintiffs-appellants now ask P37,500.00 each for
• Moral damages are recoverable in breach of contracts where the defendant acted the two but we note that in their motion for reconsideration filed in the court a quo,
fraudulently or in bad faith. In addition to moral damages, exemplary or corrective they were satisfied with P25,000.00 each for said persons. (Record on Appeal, p.
damages may be imposed by way of example or correction for the public good, in 102). For their social humiliation, therefore, the award to them of P25,000.00 each is
breach of contract where the defendant acted in a wanton, fraudulent, reckless, reasonable.
oppressive or malevolent manner. Lastly, a written contract for an attorney's
services shall control the amount to be paid therefor unless found by the court to be
unconscionable or unreasonable.
• As a proximate result of defendant's breach in bad faith of its contracts with
plaintiffs, the latter suffered social humiliation, wounded feelings, serious anxiety
and mental anguish. For plaintiffs were travelling with first class tickets issued by
defendant and yet they were given only the tourist class. At stop-overs, they were
expected to be among the first-class passengers by those awaiting to welcome them,
only to be found among the tourist passengers. It may not be humiliating to travel as
tourist passengers; it is humiliating to be compelled to travel as such, contrary to what is
rightfully to be expected from the contractual undertaking. Senator Lopez was then MAUI MORALES
Page 422 of 528

382. Zamboanga Transportaion Company. et al. vs. CA |BARREDO, J.: • The Court humbly contends that to award damages when none was allowed by the
G.R. No. L-25292 November 29, 1969 lower Court, and to increase damages when the successful party did not appeal, is
simply improper and amounts to pure abuse of discretion on the part of the
FACTS respondent appellate Court,
• True it is, the awards of P8,000 each for the death of the parents of respondent Jose
• The Spouses Ramon and Josefina Dagamanuel boarded a bus to attend a benefit Mario Dagamanuel may not be increased anymore, but We cannot say that they
dance at an elementary School, where Josefina was a public school teacher. After the should be reduced.
dance, the couple boarded the same bus. At around 1 o'clock in the early morning, • The Court furthermore didn’t approve of the award of the CA of moral damages,
the bus driven by Valeriano Marcos, fell off the road and pinned to death the said considering the tender age of the above-named respondent child, and the Court
spouses and several other passengers. would have upheld the same had private respondent appealed from the decision of
• The plaintiff, the only child of the deceased spouses, through his maternal the trial court. Indeed, the Court of Appeals properly interpreted the P16,000
grandmother, as guardian ad-litem, instituted this action against the defendants awarded by the trial court as including not only damages for the deceased couple but
Zamboanga Transportation Co., Inc. and the Zamboanga Rapids Co., Inc. also the other items of recoverable damages, like compensatory or actual, etc. Thus
(hereinafter referred to as Zamtranco and Zambraco, respectively) for breach of viewed, the amounts awarded by the trial court cannot be considered excessive.
contract of carriage.
• The lower court, held Zamtranco, the operator, jointly and severally liable with the
registered owner, Zamtranco
ISSUES & ARGUMENTS
W/N the CA erred, as a matter of law and applicable decisions of the SC, in
awarding excessive damages for the death of the parents of respondent; excessive
compensatory damages; and excessive moral damages to respondent, without the
latter appealing the decision of the TC.
YES, PARTLY.
• It may be recalled that the trial court's judgment regarding the matter of damages
was as follows:1) P8,000.00 for the death of Ramon Dagamanuel; 2) P8,000.00 for
the death of Josefina Punzalan; 3) P4,000.00 as exemplary damages; 4) P2,000.00 as
attorney's fees; and 5) Costs.
• The respondent did not appeal any portion of the decision of the lower Court, thus
indicating that he is fully satisfied with the same. On the other hand, the driver of
the ill-fated bus failed to perfect his appeal and consequently, as against him, the
decision of the lower Court is already final.
• The lower Court rendered a decision against the driver of the bus and the two
petitioners herein for the death of the parents of the respondent in the sum of
P16,000.00 together with P4,000.00 exemplary damages. But notwithstanding the
automatic exclusion of the driver from the effects of the appealed decision, the
Court of Appeals, while reducing the death award to P12,000.00 increased the
exemplary damages to P5,000.00 adding thereto P11,520.00 compensatory damages
and P5,000.00 moral damages.
MAGIC MOVIDO
Page 423 of 528

383. Asia Pacific Chartering vs. Farolan | Carpio-Morales, J.: • A valid dismissal of an employee requires that:
G.R. No. 151370, December 4, 2002 | 393 SCRA 454 o The employee must be afforded due process (opportunity to be heard
and to defend himself)
FACTS o Dismissal must be for a valid cause (Art. 282 of the Labor Code)
• The employer bears the onus of proving that the dismissal is for just cause
• Maria Linda Farolan was hired as Sales Manager of Asia Pacific Chartering for its failing which the dismissal is not justified and the employee is entitled to
passenger and cargo GSA (general sales agent) operations for Scandinavian Airline reinstatement
System via a ‘letter-offer of employment’ • Recent decisions of the Court distinguished the treatment of managerial
• Upon her acceptance and assumption of her post, she participated in a number of employees from that of rank and file personnel insofar as the application of the
meetings/seminars geared towards improving her marketing and sales skills doctrine of loss of trust and confidence is concerned
including: o Rank and file – loss of trust and confidence requires proof of
o Customer service seminar in Bangkok, Thailand involvement in the alleged events in question and that mere
o Regional Sales Meeting on the technical aspects of airline commercial uncorroborated assertions and accusations by the employer will not be
operations sufficient
o Course on the highly technical airline computer reservations system (Amadeus) o Managerial – the mere existence of a basis for believing that such
• There were several letters indicating the APC’s happiness and congratulations for employee has breached the trust of his employer would suffice for his
Farolan’s good performance dismissal
• Farolan moved for the lower fare of seamen to be competititve with other agents, • Things to consider to be deemed as a ‘managerial employee’
which eventually resulted to a marked decline in SAS’ sales revenues o Their primary duty consists of the management of the establishment
• APC directed Zozobrado, a high ranking officer, to conduct investigation to identify in which they are employed or of a department or subdivision thereof
the problems and implement possible solutions o They customarily and regularly direct the work of two or more
o Zozobrado informally took over some of Farolan’s marketing and sales employees therein
responsibilities but the latter retained her title and continued to receive her o They have the authority to hire or fire other employees of lower rank;
salary as such or their suggestions and recommendations as to the hiring and firing
o The investigation divulge that Farolan did not adopt any sales strategy nor and as to the promotion or any other change of status of other
conduct any sales meeting or develop other sources of revenue for SAS employees are given particular weight
• In another letter, APC urged Farolan to file her letter of resignation for she failed to • Loss of trust and confidence to be a valid ground for an employee’s dismissal
meet the former’s expectations of a Sales Manager must be based on a willful breach and founded on clearly established facts
o Farolan refused and APC sent a letter of termination on the ground of o A breach is willful if it is done intentionally, knowingly, and purposely,
‘loss of confidence’ without justifiable excuse, as distinguished from an act done carelessly,
• Farolan contested her termination and filed a case for illegal dismissal which the thoughtlessly, heedlessly, or inadvertently
court adjudged in her favor, awarding moral and exemplary damages at the same • To warrant award of moral damages, it must be shown that the dismissal of the
time employee was attended to by bad faith, or constituted an act opposite to labor,
• On appeal to the NLRC, the latter reversed the ruling on the ground of or was done in a manner contrary to morals, good customs, or public policy.
‘management prerogative’ but the same was reversed on appeal to the CA, which o Award of moral and exemplary damages for an illegally dismissed
reinstated the lower court’s ruling employee is proper where the employee had been harassed and
• Hence, the present petition for review on certiorari arbitrarily terminated by the employer
ISSUES & ARGUMENTS Initial order Final order

Moral Damages P1,500,000 P500,000
W/N Farolan was illegally dismissed and entitled to damages Exemplary Damages P750,000 P250,000
YES. CEO OCAMPO

Page 424 of 528
384. Samson, Jr. vs. BPI | Panganiban • Award should be increased to P100,000.00 since a) petitioner is a businessman and
G.R. No. 150487, July 10, 2003 | 405 SCRA 607 the highest lay person in the United Methodist Church; b) was regarded with
arrogance and a condescending manner, and c) BPI successfully postponed
FACTS compensating him for more than a decade. His alleged delay in reporting the matter
did not at all contribute to his injury.
• Samson, Jr. filed an action for damages against BPI. As a client/depositor of the
bank, he deposited a Prudential Bank check into his savings account worth Petition partly granted. Decision modified. Award increased to P100,000.00
P3,500.00. Later, he asked his daughter to withdraw P2,000, but declined due to
insufficient funds. As a result, he suffered embarrassment as he could not produce
the required cash to fulfill an obligation towards a creditor who had waited at his
residence.
• Subsequently, Samson deposited P5,500.00. Here, he discovered that hi balance
remained P342.38, and that the earlier deposit of P3,500.00 had not been credited.
• When Samson asked about the discrepancy, BPI confirmed the deposited check but
could not account for the same. Upon investigation, it was found out that their
security guard had encashed the check and that, despite knowledge of the
irregularity, BPI had not informed Samson. Moreover, manager Cayanga allegedly
displayed arrogance, indifference, and discourtesy towards Samson.
• The trial court rendered a decision in favor of Samson. CA affirmed by reducing the
amount of damages from P200,000.00 to P50,000.00. Hence this petition.
ISSUES & ARGUMENTS
W/N the reduction of moral damages by the trial court was proper.
PETITION IS PARTLY MERITORIOUS.

• Moral damages are meant to compensate the claimant for any physical suffering,
moral shock, social humiliation and similar injuries unjustly caused.
• Although incapable of pecuniary estimation, the amount must somehow be
proportional to and in approximation of the suffering inflicted. Moral damages are
not punitive in nature and were never intended to enrich the claimant at the expense
of the defendant.
• No hard-and-fast rule in determining moral damages; each case must be governed
by its own peculiar facts. Trial courts are given discretion in determining the
amount, with the limitation that it “should not be palpably and scandalously
excessive.”
• Moral damages are awarded to achieve a “spiritual status quo”, i.e. to enable the
injured party to obtain means, diversions, amusements that will serve to alleviate the
moral suffering undergone.
• The social standing of the aggrieved party is essential to the determination of the
proper amount of the ward. Otherwise, the goal of enabling him restore the spiritual
status quo may not be achieved. CHRISSIE MORAL
Page 425 of 528

385. Erlinda Francisco v. Ricardo Ferrer, Jr., et al. | Pardo • Bad faith does not simply connote bad judgment or negligence, it imports a
G.R. No. 142029, February 28, 2001 | 353 SCRA 261 dishonest purpose or some moral obliquity and conscious doing of a wrong, a
breach of known duty through some motive or interest or ill will that partakes of the
FACTS nature of fraud.
• Moral damages are in the category of an award designed to compensate the claimant
• Mrs. Rebecca Lo and her daughter Annette Ferrer ordered a 3-layered cake from for actual injury suffered and not to impose a penalty on the wrongdoer.
Fountainhead Bakeshop. It was agreed that the wedding cake shall be delivered at • The person claiming moral damages must prove the existence of bad faith by clear
5:00 in the afternoon on December 14, 1992 at the Cebu Country Club, Cebu City. and convincing evidence for the law always presumes good faith. It is not enough
• Plaintiffs made their full payment. that one merely suffered sleepless nights, mental anguish, serious anxiety as the
• At 7:00 in the evening, the wedding cake has not arrived. Plaintiffs made a follow-up result of the actuations of the other party. Mere allegations of besmirched
call and were informed that it was probably late because of the traffic. reputation, embarrassment and sleepless nights are insufficient to warrant an award
• At 8:00, plaintiffs were informed that no wedding cake will be delivered because the for moral damages.
order slip got lost. They were then compelled to buy the only available cake at the • An award of moral damages would require certain conditions to be met, to wit: (1)
Cebu Country Club which was a sans rival. first, there must be an injury, whether physical, mental or psychological, clearly
• At 10:00, a 2-layered wedding cake arrived. Plaintiffs declined to accept it. sustained by the claimant; (2) second, there must be culpable act or omission
• Defendant Erlinda Francisco sent a letter of apology accompanied with a P5,000.00 factually established; (3) third, the wrongful act or omission of the defendant is the
check which was declined by plaintiffs. 2 weeks after the wedding, Francisco called proximate cause of the injury sustained by the claimant; and (4) fourth, the award of
Mrs. Lo and apologized. damages is predicated on any of the cases stated in Article 2219” of the Civil Code.
• Plaintiffs filed an action for breach of contract with damages. • When awarded, moral damages must not be palpably and scandalously excessive as
• TC decided in favor of plaintiffs, directing defendant to pay the cost of the wedding to indicate that it was the result of passion, prejudice or corruption on the part of
cake, MORAL DAMAGES, attorney’s fees and the cost of litigation. the trial court judge or appellate court justices.
• CA modified the award by increasing the MORAL DAMAGES to P250,000.00 and • In this case, we find no such fraud or bad faith.
awarding EXEMPLARY DAMAGES of P100,000.00.
CA also erred in awarding EXEMPLARY DAMAGES.
ISSUES & ARGUMENTS • To warrant the award of exemplary damages, [t]he wrongful act must be
accompanied by bad faith, and an award of damages would be allowed only if the
W/N the CA erred in affirming the TC’s award of MORAL DAMAGES and guilty party acted in a wanton, fraudulent, reckless or malevolent manner.
increasing the amount from P30,000.00 to P250,000.00. • The requirements of an award of exemplary damages are: (1) they may be imposed
by way of example in addition to compensatory damages, and only after the
W/N the CA was justified in awarding in addition to moral damages, claimant’s right to them has been established; (2) that they can not be recovered as a
EXEMPLARY DAMAGES of P100,000.00. matter of right, their determination depending upon the amount of compensatory
Petitioner- CA and TC erred in awarding moral damages because moral damages that may be awarded to the claimant; (3) the act must be accompanied by
damages are recoverable in breach of contract cases only where the breach was bad faith or done in a wanton, fraudulent, oppressive or malevolent manner.
palpably wanton, reckless, malicious, in bad faith, oppressive or abusive.
NOMINAL DAMAGES awarded.
HOLDING & RATIO DECIDENDI • The facts show that when confronted with their failure to deliver on the wedding
day, petitioners gave the lame excuse that delivery was probably delayed because of
YES. CA erred in awarding MORAL DAMAGES. the traffic, when in truth, no cake could be delivered because the order slip got lost.
• Article 2219 of the Civil Code provides: “To recover moral damages in an action for For such prevarication, petitioners must be held liable for nominal damages for
breach of contract, the breach must be palpably wanton, reckless, malicious, in bad insensitivity, inadvertence or inattention to their customer’s anxiety and need of the
faith, oppressive or abusive.” hour.
• In culpa contractual or breach of contract, moral damages may be recovered when • Nominal damages are recoverable where a legal right is technically violated and must
the defendant acted in bad faith or was guilty of gross negligence (amounting to bad be vindicated against an invasion that has produced no actual present loss of any
faith) or in wanton disregard of his contractual obligation and, exceptionally, when kind or where there has been a breach of contract and no substantial injury or actual
the act of breach of contract itself is constitutive of tort resulting in physical injuries. damages whatsoever have been or can be shown.
Page 426 of 528

• Nominal damages may be awarded to a plaintiff whose right has been violated or
invaded by the defendant, for the purpose of vindicating or recognizing that right,
not for indemnifying the plaintiff for any loss suffered.
Petition granted. CA reversed. Petitioner order to pay the cost of the wedding cake, nominal damages of
P10,000.00, attorney’s fees and the costs of litigation.
TIN OCAMPO-TAN
Page 427 of 528

386. Zalamea vs. Court of Appeals | Nocon ISSUES & ARGUMENTS
G.R. No. 104235, November 18, 1993 | 228 SCRA 23
W/N TWA is guilty of bad faith?
FACTS
• Spouses Zalamea, and their daughter, Liana Zalamea, purchased three (3) airline
tickets from the Manila agent of respondent TransWorld Airlines, Inc. for a YES.
flight to New York to Los Angeles on June 6, 1984. The tickets of petitioners- Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling
spouses were purchased at a discount of 75% while that of their daughter was a the passengers concerned to an award of moral damages. In Alitalia Airways v. Court of
full fare ticket. All three tickets represented confirmed reservations. Appeals, where passengers with confirmed bookings were refused carriage on the last
• While in New York, on June 4, 1984, petitioners received notice of the minute, this Court held that when an airline issues a ticket to a passenger confirmed on a
reconfirmation of their reservations for said flight. On the appointed date, particular flight, on a certain date, a contract of carriage arises, and the passenger has
however, petitioners checked in at 10:00 a.m., an hour earlier than the every right to expect that he would fly on that flight and on that date. If he does not,
scheduled flight at 11:00 a.m. but were placed on the wait-list because the then the carrier opens itself to a suit for breach of contract of carriage. Where an airline
number of passengers who had checked in before them had already taken all had deliberately overbooked, it took the risk of having to deprive some passengers of
the seats available on the flight. Liana Zalamea appeared as the No. 13 on the their seats in case all of them would show up for the check in. For the indignity and
wait-list while the two other Zalameas were listed as "No. 34, showing a party inconvenience of being refused a confirmed seat on the last minute, said passenger is
of two." Out of the 42 names on the wait list, the first 22 names were entitled to an award of moral damages.
eventually allowed to board the flight to Los Angeles, including petitioner Cesar A contract to transport passengers is quite different in kind and degree from any other
Zalamea. The two others, on the other hand, at No. 34, being ranked lower contractual relation. So ruled this Court in Zulueta v. Pan American World Airways, Inc. This
than 22, were not able to fly. As it were, those holding full-fare tickets were is so, for a contract of carriage generates a relation attended with public duty — a duty to
given first priority among the wait-listed passengers. Mr. Zalamea, who was provide public service and convenience to its passengers which must be paramount to
holding the full-fare ticket of his daughter, was allowed to board the plane; self-interest or enrichment. Thus, it was also held that the switch of planes from
while his wife and daughter, who presented the discounted tickets were denied Lockheed 1011 to a smaller Boeing 707 because there were only 138 confirmed economy
boarding. According to Mr. Zalamea, it was only later when he discovered the class passengers who could very well be accommodated in the smaller planes, thereby
he was holding his daughter's full-fare ticket. sacrificing the comfort of its first class passengers for the sake of economy, amounts to
• Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, bad faith. Such inattention and lack of care for the interest of its passengers who are
could not be accommodated because it was also fully booked. Thus, they were entitled to its utmost consideration entitles the passenger to an award of moral damages.
constrained to book in another flight and purchased two tickets from American Even on the assumption that overbooking is allowed, respondent TWA is still guilty of
Airlines at a cost of Nine Hundred Eighteen ($918.00) Dollars. bad faith in not informing its passengers beforehand that it could breach the contract of
• Petitioners filed an action for damages based on breach of contract of air carriage even if they have confirmed tickets if there was overbooking. Respondent TWA
carriage before the Regional Trial Court of Makati and ruled in favor of should have incorporated stipulations on overbooking on the tickets issued or to
petitioners. properly inform its passengers about these policies so that the latter would be prepared
• On appeal, the respondent Court of Appeals held that moral damages are for such eventuality or would have the choice to ride with another airline.
recoverable in a damage suit predicated upon a breach of contract of carriage Moreover, respondent TWA was also guilty of not informing its passengers of its alleged
only where there is fraud or bad faith. Since it is a matter of record that policy of giving less priority to discounted tickets. While the petitioners had checked in at
overbooking of flights is a common and accepted practice of airlines in the the same time, and held confirmed tickets, yet, only one of them was allowed to board
United States and is specifically allowed under the Code of Federal Regulations the plane ten minutes before departure time because the full-fare ticket he was holding
by the Civil Aeronautics Board, no fraud nor bad faith could be imputed on was given priority over discounted tickets. The other two petitioners were left behind.
respondent TransWorld Airlines. The purchase of the American Airlines tickets by petitioners Suthira and Liana was the
consequence of respondent TWA's unjustifiable breach of its contracts of carriage with
petitioners. In accordance with Article 2201, New Civil Code, respondent TWA should,
therefore, be responsible for all damages which may be reasonably attributed to the non-
performance of its obligation. In the previously cited case of Alitalia Airways v. Court of
Appeals, 15 this Court explicitly held that a passenger is entitled to be reimbursed for the
Page 428 of 528
cost of the tickets he had to buy for a flight to another airline. Thus, instead of simply
being refunded for the cost of the unused TWA tickets, petitioners should be awarded
the actual cost of their flight from New York to Los Angeles. On this score, we differ
from the trial court's ruling which ordered not only the reimbursement of the American
Airlines tickets but also the refund of the unused TWA tickets. To require both
prestations would have enabled petitioners to fly from New York to Los Angeles
without any fare being paid.
The award to petitioners of attorney's fees is also justified under Article 2208(2) of the
Civil Code which allows recovery when the defendant's act or omission has compelled
plaintiff to litigate or to incur expenses to protect his interest. However, the award for
moral damages and exemplary damages by the trial court is excessive in the light of the
fact that only Suthira and Liana Zalamea were actually "bumped off." An award of
P50,000.00 moral damages and another P50,000.00 exemplary damages would suffice
under the circumstances obtaining in the instant case.
JAVIN OMPOC
Page 429 of 528

387. People vs. Senen Prades| En Banc
G.R. No. 127569, July 30, 1998
FACTS
• Senen Prades, armed with a handgun, entered the dwelling of Emmie Rosales, a
seventeen year old girl, and by means of force and intimidation and with lewd
design, did then and there willfully, unlawfully and feloniously had sexual
intercourse with her against her will.
• Rosales and the physician who conducted the medical examination testified in court.
• Prades subsequently absconded and the trial continued in absentia.
• The guilt of the accused was proved beyond reasonable doubt from the testimony
that moonlit seeped through the spaces in the sawali door, enabling the victim to
identify Prades who was the husband of her grandmother’s goddaughter. Prades also
sent Rosales two letters asking for forgiveness, and willingness to leave his wife,
which the Court interpreted as an admission of guilt.
• Due to the aggravating circumstance of the crime being committed in the dwelling
of the offended party, Prades was sentenced the higher penalty of death. The RTC
also awarded P50,000.00 moral damages.
ISSUES & ARGUMENTS
W/N the grant of moral damages was proper
No, the lower court erred in classifying the award of P50,000 as moral damages
• It is well established in jurisprudence that the award authorized by the criminal law
as civil indemnity ex delicto for the offended party is itself equivalent to actual or
compensatory damages in civil law.
• The civil indemnity provided by the RPC for the crime of rape is in the nature of
restitution, reparation, and indemnification. What the lower court awarded was a
mandatory civil indemnity upon the finding of the fact of rape. It is distinct from
and should not be denominated as moral damages which are based on different jural
foundations and assessed by the court in the exercise of sound discretion.
• The recent judicial prescription is that the indemnification of the victim shall be in
the increased amount of P75,000.00 if the crime of rape is committed or effectively
qualified by any of the circumstances under which the death penalty is authorized by
the applicable amendatory laws.
Held: P50,000 moral damages changed to P75,000 compensatory damages
.
MARICE PACHECO
Page 430 of 528

388. Expertravel vs. CA | Vitug is that the law could have not meant to impose a penalty on the right to litigate. The
G.R. No. 130030 June 25, 2009 | anguish suffered by a person for having been a defendant in a civil suit would be no
different from the usual worry and anxiety suffered by anyone who is haled to court, a
FACTS situation that cannot by itself be a cogent reason for award of moral damage if the rule
were otherwise, then moral damages must every time be awarded in favor of the
• Expertravel & Tours Inc. issued to private respondent Ricardo Lo four round trip prevailing defendant against an unsuccessful plaintiff.
plane tickets to Hong Kong, together with hotel accommodations and transfers, for
a total cost of 39, 677.20.
• Alleging that Lo had failed to pay the amount due, Expertravel caused several
demands to be made. Since the demands were ignored by Lo, Expertravel filed a
court complaint for recovery of amount due plus damages.
• In his answer, Lo explained that he had already paid such amount to expertravel. It
was remmited to the Chairperson of Expertravel, Ms. De Vega. This was evidenced
by Monte de Pieda check with the amount of 50,000 pesos.
• The trial court, affirmed by the appellate court, ruled that payment to Ms. De Vega
is valid and binding to Expertravel and awarded moral damages, attorney’s fees and
cost of suit in favor of Lo.
ISSUES & ARGUMENTS
W/N the appellate court was correct in awarding moral damages in favor of Lo.
The Appellate Court was not correct in awarding moral damages in favor of Lo
Moral damages are not punitive in nature but are designed to compensate and alleviate in
some way the physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feeling, moral shock, social humiliation, and similar injury unjustly
caused to a person. Such damages must be the proximate result of a wrongful act or
omission the factual basis for which is satisfactorily established by the aggrieved party.
An award of moral damages would require certain conditions to be met; to wit

1. there must be an injury, whether physical, mental or psychological, clearly
sustained by the claimant.
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
4. the award of damages is predicated on any of the cases stated in article 2219,
death of a passenger under breach of carriage, when the defendant is guilty of
intentional tort, culpa criminal, analogous cases, or malicious prosecution
Although the institution of a clearly unfounded civil suit can at times be a legal
justification for award of attorney’s fees, such filing is however, has almost been
invariably been held not a ground for award of moral damages. The rationale for this rule VP PADILLA
Page 431 of 528

389. Air France, petitioner vs. Carascoso and CA, respondents ticket so issued is desirable. Such is the case here. The lower courts refused to
G.R. No. L-21438 September 28, 1966 believe the oral evidence intended to defeat the covenants in the ticket.
Facts • Why, then, was he allowed to take a first class seat in the plane at Bangkok, if he had
no seat or, if another had a better right to the seat?
• On March 28, 1958, the defendant, Air France, through its authorized agent,
Philippine Air Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket • To authorize an award for moral damages there must be an averment of fraud or
from Manila to Rome. From Manila to Bangkok, plaintiff travelled in "first class", bad faith. It is true that there is no specific mention of the term bad faith in the
but at Bangkok, the Manager of the defendant airline forced plaintiff to vacate the complaint. But, the inference of bad faith is there, it may be drawn from the facts
"first class" seat that he was occupying because, in the words of the witness Ernesto and circumstances set forth therein. The contract was averred to establish the
G. Cuento, there was a "white man", who, the Manager alleged, had a "better right" relation between the parties. But the stress of the action is put on wrongful
to the seat. When asked to vacate his "first class" seat, the plaintiff, as was to be expulsion. It is, therefore, unnecessary to inquire as to whether or not there is
expected, refused, and told defendant's Manager that his seat would be taken over sufficient averment in the complaint to justify an award for moral damages.
his dead body; a commotion ensued, and, according to said Ernesto G. Cuento, Deficiency in the complaint, if any, was cured by the evidence. An amendment
"many of the Filipino passengers got nervous in the tourist class; when they found thereof to conform to the evidence is not even required.
out that Mr. Carrascoso was having a hot discussion with the white man [manager],
they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat • Passengers do not contract merely for transportation. They have a right to be
to the white man" and plaintiff reluctantly gave his "first class" seat in the plane. treated by the carrier's employees with kindness, respect, courtesy and due
consideration. They are entitled to be protected against personal misconduct,
ISSUES & ARGUMENTS injurious language, indignities and abuses from such employees. So it is that any rule
or discourteous conduct on the part of employees towards a passenger gives the
latter an action for damages against the carrier.
Was Carrascoso entitled to the first class seat he claims and therefore entitles to
damages?
Held
• Yes. It is conceded in all quarters that on March 28, 1958 he paid to and received
from petitioner a first class ticket. But petitioner asserts that said ticket did not
represent the true and complete intent and agreement of the parties; that said
respondent knew that he did not have confirmed reservations for first class on any
specific flight, although he had tourist class protection; that, accordingly, the
issuance of a first class ticket was no guarantee that he would have a first class ride,
but that such would depend upon the availability of first class seats.
• If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class

seat, notwithstanding the fact that seat availability in specific flights is therein
confirmed, then an air passenger is placed in the hollow of the hands of an airline.
What security then can a passenger have? It will always be an easy matter for an
airline aided by its employees, to strike out the very stipulations in the ticket, and say
that there was a verbal agreement to the contrary. What if the passenger had a
schedule to fulfill? We have long learned that, as a rule, a written document speaks a
uniform language; that spoken word could be notoriously unreliable. If only to
achieve stability in the relations between passenger and air carrier, adherence to the
J.C. LERIT
Page 432 of 528

390. Tiongson v Fernandez | Reyes JBL.
G.R. No. L-26403, October 20, 1970 |
FACTS
• Defendants were granted water appropriation rights over Taguan River and
Noynoyin Creek in Tiaong and Candelaria in Quezon Province
• In 1918 defendants were granted the said rights by Department of Commerce and
Communications. In 1940 they built a dam that impeded the flow of water from
Taguan into the Aguirra, this dam was named the Del-Valle Dam. In 1952
defendants increased the height of the dam fully blocking the flow of the river.
• Plaintiffs are owners of a parcel of land around 20 hectares situated in Candelaria.
They claim that since 1955 they have been farming the land and have irrigated it
from all the water overflowing the dam situated on Noynoyin creek built by a
Nicolas Maralit. Thus they claim that they have acquired by prescription all the
water that overflows from the dam to the exclusion of all the others.
• Defendants and intervenors allege that with the construction of the Del Valle dam
there is no more water flowing from the Noynoyin. It is admitted that before the
construction that there is an arrangement between defendants and plaintiffs and
predecessors in interest that the defendants used to take water from the river that is
stopped by the dam
• Defendants and intervenors ask plaintiffs to pay total of P165,000 in moral damages
and P66,000 exemplary damages.
• Lower court ruled that defendant Hernandez had no right to dig canal connecting
Noynoyin to Aguirra and enjoined him from reducing water in the Del Valle dam.
LC dismissed claim for damages and charged defendant P500 for costs.
ISSUES & ARGUMENTS
W/N There is prescription?
Award of Damages proper?
NO PRESCRIPTION. AWARD OF DAMAGES PROPER. PLAINTIFFS

MUST DEMOLISH THE DAM.
• Court finds no clear evidence of prescription for 20 years or more
• Del Valle was not content with reducing the water flow to defendants Hernandez
and in fact increased height of dam in 1952 blocking it totally. Hernandez et al
entitled to Moral damages P2000 each. Entitlement based on Art. 2220 of Civil
Code.
• Equity and Justice dictate that Hernandez et al can recover attorney’s fees in amount
of P5000 according to Art. 2208 Civil Code.
CHRIS PALARCA
Page 433 of 528

391. Zalamea vs. Court of Appeals | Nocon Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling
G.R. No. 104235, November 18, 1993 | 228 SCRA 23 the passengers concerned to an award of moral damages. In Alitalia Airways v. Court of
Appeals, where passengers with confirmed bookings were refused carriage on the last
FACTS minute, this Court held that when an airline issues a ticket to a passenger confirmed on a
• Spouses Zalamea, and their daughter, Liana Zalamea, purchased three (3) airline particular flight, on a certain date, a contract of carriage arises, and the passenger has
tickets from the Manila agent of respondent TransWorld Airlines, Inc. for a flight to every right to expect that he would fly on that flight and on that date. If he does not,
New York to Los Angeles on June 6, 1984. The tickets of petitioners-spouses were then the carrier opens itself to a suit for breach of contract of carriage. Where an airline
purchased at a discount of 75% while that of their daughter was a full fare ticket. All had deliberately overbooked, it took the risk of having to deprive some passengers of
three tickets represented confirmed reservations. their seats in case all of them would show up for the check in. For the indignity and
• While in New York, on June 4, 1984, petitioners received notice of the inconvenience of being refused a confirmed seat on the last minute, said passenger is
reconfirmation of their reservations for said flight. On the appointed date, however, entitled to an award of moral damages.
petitioners checked in at 10:00 a.m., an hour earlier than the scheduled flight at A contract to transport passengers is quite different in kind and degree from any other
11:00 a.m. but were placed on the wait-list because the number of passengers who contractual relation. So ruled this Court in Zulueta v. Pan American World Airways, Inc. This
had checked in before them had already taken all the seats available on the flight. is so, for a contract of carriage generates a relation attended with public duty — a duty to
Liana Zalamea appeared as the No. 13 on the wait-list while the two other Zalameas provide public service and convenience to its passengers which must be paramount to
were listed as "No. 34, showing a party of two." Out of the 42 names on the wait self-interest or enrichment. Thus, it was also held that the switch of planes from
list, the first 22 names were eventually allowed to board the flight to Los Angeles, Lockheed 1011 to a smaller Boeing 707 because there were only 138 confirmed economy
including petitioner Cesar Zalamea. The two others, on the other hand, at No. 34, class passengers who could very well be accommodated in the smaller planes, thereby
being ranked lower than 22, were not able to fly. As it were, those holding full-fare sacrificing the comfort of its first class passengers for the sake of economy, amounts to
tickets were given first priority among the wait-listed passengers. Mr. Zalamea, who bad faith. Such inattention and lack of care for the interest of its passengers who are
was holding the full-fare ticket of his daughter, was allowed to board the plane; entitled to its utmost consideration entitles the passenger to an award of moral damages.
while his wife and daughter, who presented the discounted tickets were denied Even on the assumption that overbooking is allowed, respondent TWA is still guilty of
boarding. According to Mr. Zalamea, it was only later when he discovered the he bad faith in not informing its passengers beforehand that it could breach the contract of
was holding his daughter's full-fare ticket. carriage even if they have confirmed tickets if there was overbooking. Respondent TWA
• Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, could should have incorporated stipulations on overbooking on the tickets issued or to
not be accommodated because it was also fully booked. Thus, they were constrained properly inform its passengers about these policies so that the latter would be prepared
to book in another flight and purchased two tickets from American Airlines at a cost for such eventuality or would have the choice to ride with another airline.
of Nine Hundred Eighteen ($918.00) Dollars. Moreover, respondent TWA was also guilty of not informing its passengers of its alleged
• Petitioners filed an action for damages based on breach of contract of air carriage policy of giving less priority to discounted tickets. While the petitioners had checked in at
before the Regional Trial Court of Makati and ruled in favor of petitioners. the same time, and held confirmed tickets, yet, only one of them was allowed to board
• On appeal, the respondent Court of Appeals held that moral damages are the plane ten minutes before departure time because the full-fare ticket he was holding
recoverable in a damage suit predicated upon a breach of contract of carriage only was given priority over discounted tickets. The other two petitioners were left behind.
where there is fraud or bad faith. Since it is a matter of record that overbooking of The purchase of the American Airlines tickets by petitioners Suthira and Liana was the
flights is a common and accepted practice of airlines in the United States and is consequence of respondent TWA's unjustifiable breach of its contracts of carriage with
specifically allowed under the Code of Federal Regulations by the Civil Aeronautics petitioners. In accordance with Article 2201, New Civil Code, respondent TWA should,
Board, no fraud nor bad faith could be imputed on respondent TransWorld Airlines. therefore, be responsible for all damages which may be reasonably attributed to the non-
ISSUES & ARGUMENTS performance of its obligation. In the previously cited case of Alitalia Airways v. Court of
Appeals, 15 this Court explicitly held that a passenger is entitled to be reimbursed for the
W/N TWA is guilty of bad faith? cost of the tickets he had to buy for a flight to another airline. Thus, instead of simply
being refunded for the cost of the unused TWA tickets, petitioners should be awarded
HOLDING & RATIO DECIDENDI the actual cost of their flight from New York to Los Angeles. On this score, we differ
from the trial court's ruling which ordered not only the reimbursement of the American
YES. Airlines tickets but also the refund of the unused TWA tickets. To require both
prestations would have enabled petitioners to fly from New York to Los Angeles
without any fare being paid.
Page 434 of 528

The award to petitioners of attorney's fees is also justified under Article 2208(2) of the
Civil Code which allows recovery when the defendant's act or omission has compelled
plaintiff to litigate or to incur expenses to protect his interest. However, the award for
moral damages and exemplary damages by the trial court is excessive in the light of the
fact that only Suthira and Liana Zalamea were actually "bumped off." An award of
P50,000.00 moral damages and another P50,000.00 exemplary damages would suffice
under the circumstances obtaining in the instant case.
JAVIN OMPOC
Page 435 of 528

392. PAL vs. CA and Sps. Miranda (private respondents), from the need for tipping money for hotel boys. Upon refusal of this simple request,
257 SCRA 33 (1996) Dr. Miranda then declared that he would forego the amenities offered by PAL.
Thus, the voucher for P150.00 and the authority for the hotel accommodations
FACTS prepared by PAL were voided due to private respondents' decision not to avail
themselves thereof.
♦ Dr. Josefino Miranda and his wife, Luisa, who were residents of Surigao City, went
to the United States of America on a regular flight of PAL. On June 19, 1988, after a ♦ To aggravate the muddled situation, when private respondents tried to retrieve their
stay of over a month there, they obtained confirmed bookings from PAL's San baggage, they were told this time that the same were loaded on another earlier PAL
Francisco Office for PAL Flight PR 101 from San Francisco to Manila via Honolulu flight to Surigao City. Thus, private respondents proceeded to the hotel sans their
on June 21, 1988; PAL flight PR 851 from Manila to Cebu on June 24, 1988; and baggage and of which they were deprived for the remainder of their trip. Private
PAL Flight PR 905 from Cebu to Surigao also on June 24, 1988. respondents were finally able to leave on board the first PAL flight to Surigao City
only on June 26, 1988. Thereafter, they instituted an action for damages which, after
♦ On June 21, 1988, private respondents boarded PAL Flight PR 101 in San Francisco trial as well as on appeal, was decided in their favor.
with five (5) pieces of baggage. After a stopover at Honolulu, and upon arrival in
Manila on June 23, 1988, they were told by the PAL personnel that their baggage ISSUE & ARGUMENTS
consisting of two balikbayan boxes, two pieces of luggage and one fishing rod case
were off-loaded at Honolulu, Hawaii due to weight limitations. Consequently, Whether or not there was bad faith on the part of PAL so as to entitle the Sps.
private respondents missed their connecting flight from Manila to Cebu City, as Miranda to moral damages?
originally scheduled, since they had to wait for their baggage which arrived the
following day, June 24, 1988, after their pre-scheduled connecting flight had left. HOLDING & RATIO DECIDENDI
They consequently also missed their other scheduled connecting flight from Cebu
City to Surigao City. YES.
♦ On June 25, 1988, they departed for Cebu City and therefrom private respondents • Crucial to the determination of the propriety of the award of damages in this
had to transfer to PAL Flight 471 for Surigao City. On the way to Surigao City, the case is the lower court's findings on the matter of bad faith: found that the situation was
pilot announced that they had to return to Mactan Airport due to some mechanical aggravated by the following incidents: the poor treatment of the Mirandas by the PAL
problem. While at Mactan Airport, the passengers were provided by PAL with lunch employees during the stopover at Mactan Airport in Cebu; the cavalier and dubious
and were booked for the afternoon flight to Surigao City. However, said flight was response of petitioner's personnel to the Miranda spouses' request to be billeted at the
also canceled. Cebu Plaza Hotel by denying the same allegedly because it was fully booked, which claim
was belied by the fact that Dr. Miranda was easily able to arrange for accommodations
♦ Since there were no more lights for Surigao City that day, private respondents asked thereat; and, the PAL employees' negligent, almost malicious, act of sending off the
to be billeted at the Cebu Plaza Hotel where they usually stay whenever they happen baggage of private respondents to Surigao City, while they were still in Cebu, without any
to be in Cebu City. They were, however, told by the PAL employees that they could explanation for this gross oversight.
not be accommodated at said hotel supposedly because it was fully booked.
Contrarily, when Dr. Miranda called the hotel, he was informed that he and his wife • The Court has time and again ruled, and it cannot be over-emphasized, that a
could be accommodated there. Although reluctant at first, PAL eventually agreed to contract of air carriage generates a relation attended with a public duty and any
private respondents' overnight stay at said hotel. Oscar Jereza, PAL duty manager, discourteous conduct on the part of a carrier's employee toward a passenger gives the
approved the corresponding hotel authority with standard meals. It was only after latter an action for damages and, more so, where there is bad faith.
private respondents' insistence that their meals be ordered a la carte that they were
allowed to do so by PAL provided that they sign for their orders. • *It is settled that bad faith must be duly proved and not merely presumed. The
existence of bad faith, being a factual question, and the Supreme Court not being a trier
♦ Inasmuch as the shuttle bus had already left by the time private respondents were of facts, the findings thereon of the trial court as well as of the Court of Appeals shall
ready to go to the hotel, PAL offered them P150.00 to include the fare for the not be disturbed on appeal and are entitled to great weight and respect.
return trip to the airport. Dr. Miranda asked for P150.00 more as he and his wife,
along with all of their baggage, could not be accommodated in just one taxi, aside
Page 436 of 528
• *It is now firmly settled that moral damages are recoverable in suits predicated
on breach of a contract of carriage where it is proved that the carrier was guilty of fraud
or bad faith. Inattention to and lack of care for the interests of its passengers who are
entitled to its utmost consideration, particularly as to their convenience, amount to bad
faith which entitles the passenger to an award of moral damages. What the law considers
as bad faith which may furnish the ground for an award of moral damages would be bad
faith in securing the contract and in the execution thereof, as well as in the enforcement
of its terms, or any other kind of deceit. Such unprofessional and proscribed conduct is
attributable to petitioner airline in the case at bar and the adverse doctrinal rule is
accordingly applicable to it.
• It must, of course, be borne in mind that moral damages are not awarded to
penalize the defendant but to compensate the plaintiff for the injuries he may have
suffered in a contractual or quasi-contractual relationship, exemplary damages, on the
other hand, may be awarded only if the defendant had acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner. Attorney's fees in the concept of damages
may be awarded where there is a finding of bad faith. The evidence on record amply
sustains, and we correspondingly find, that the awards assessed against petitioner on the
aforestated items of damages are justified and reasonable.
• It may also be pointed out that it is PAL's duty to provide assistance to private
respondents and, for that matter, any other passenger similarly inconvenienced due to
delay in the completion of the transport and the receipt of their baggage. Therefore, its
unilateral and voluntary act of providing cash assistance is deemed part of its obligation
as an air carrier, and is hardly anything to rave about. Likewise, arrangements for and
verification of requested hotel accommodations for private respondents could and
should have been done by PAL employees themselves, and not by Dr. Miranda. It was
rather patronizing of PAL to make much of the fact that they allowed Dr. Miranda to
use its office telephone in order to get a hotel room.
• While it may be true that there was no direct evidence on record of blatant
rudeness on the part of PAL employees towards the Mirandas, the fact that private
respondents were practically compelled to haggle for accommodations, a situation
unbefitting persons of their stature, is rather demeaning and it partakes of discourtesy
magnified by PAL's condescending attitude. Moreover, it cannot be denied that the PAL
employees herein concerned were definitely less than candid, to put it mildly, when they
withheld information from private respondents that they could actually be
accommodated in a hotel of their choice.
• Indeed, the flamboyant testimony of Oscar Jereza, as PAL's duty manager,

merely pays lip-service to, without putting into reality, the avowed company policy of
invariably making available and always granting the requests for the kind and standard of
accommodations demanded by and appropriate for its passengers. Certainly, a more
efficient service, and not a lackadaisical and disorganized system, is expected of the
nation's flag carrier, especially on an international flight. BYRON PEREZ
Page 437 of 528

393. Antonino vs. Valencia |
G.R. No. l26526 May 27, 1974 | YES.
FACTS The statements issued were defamatory and libelous in nature as they imputed upon him
certain corrupt practices. Also, because the statement was not issued privately or
• Lorenzo Sarmiento of the Liberal Party lost to Vicente Duterte of the Nacionalista officially, malice is presumed and such presumption was not overcome as
Party in the election for governor in Davao. Valencia did not prove the truth of his statements or that they were published
• Subsequently, Senator Antonino issued a statement that the loss was caused by the with good intentions and with a justifiable motive or that they were made in the
support given by Valencia, the Secretary of Public Works, to the independent LP exercise of the right of fair comment on the character, good faith, ability and
candidate Maglana which caused a division in LP votes. Antonino was quoted in sincerity of public officials.
various newspapers that had Valencia not “Sabotaged” and “double-crossed” them,
the LP would have won. The court said that had Valencia not been motivated with malice he would have filed
• Antonino then proceeded to file requests to have Valencia investigated by the charges against Antonino with the Senate seeing as Antonino was not a candidate for
Senate Blue Ribbon Committee on alleged anomalous acquisitions of public works election and that his term as senator was no yet to expire.
supplies and equipment. Valencia retaliated by issuing a press release that he will
also file charges with the Blue Ribbon Committee regarding anomalous acts of the Also, Valencia cannot claim that his actions were justified in that Antonino was first in
Senator. This release was published in newspapers making libelous statements. The anomalous transactions charge was duly filed with the
• Antonino filed this case of damages. Valencia filed a counter-claim. Lower court Blue Ribbon. Also, the statement on sabotage and double crossing cannot be considered
ruled in favor of Antonino. Valencia appealed. Antonino died and was substituted libelous as contemporary politics shows that no stigma of disgrace or disrepute befalls
by Senator Antonino (Wife) one who changes political parties.
ISSUES & ARGUMENTS
1. W/N the Press Release was issued by Valencia

2. W/N the Press Release is libelous
YES.
The fact that Valencia caused the release and publication of the press release is seen in
the following facts:
1. The newspapers reproduced the specific charges filed by Antonino.

2. On the press release there was marked “For release” under the date.
3. It was indicated on the press release the answers made by Valencia to the
charges of Antonino in the same numerical order.
4. The press release indicated that it came from Valencia
5. The press release quoted Valencia and he admitted making the statement in his
office in the presence of the press
6. The first page of the press release consisted of quoted statements by Valencia
and reports and information he received about Antonino
7. The press release mentioned specific figures which only Valencia could know
given the time constraint
8. Valencia did not make any correction or denial of the published statement. JAN PORTER
Page 438 of 528

394. Spouses Eng v. PanAm | Puno doubt petitioners' claim that it was executed voluntarily by respondent
G.R 123560 | March 16, 2000 Tagunicar. Tagunicar categorically denied in open court that she is a duly
authorized agent of TWSI, and declared that she is an independent travel agent.
FACTS
2. No. It is against human experience that petitioners did not insist that they be
• Plaintiff Yu Eng Cho is the owner of Young Hardware Co. and Achilles Marketing. allowed to board, considering that it was then doubly difficult to get seats
On July 10, 1976, plaintiffs bought ticket from defendant Claudia Tagunicar who because of the ongoing Northwest Airlines strike. It is also perplexing that
made flight arrangements for Tourist World Services Inc. (TWSI). The destinations petitioners readily accepted whatever the Tokyo office had to offer as an
are Hong Kong, Tokyo, and San Francisco. The purpose of the trip was to go to alternative. Inexplicably too, no demand letter was sent to respondents TWSI
NJ, USA to purchase 2 lines of infrared heating systems from which Yu Eng Cho and Canilao.
expected to earn P300,000 in profits. It is not sufficient to prove that Pan Am did not allow petitioners to
• As of July 10, the only the Mla.-HK and HK-Tokyo flights were confirmed. Tokyo- board to justify petitioners' claim for damages. Mere refusal to accede to the
San Francisco legs was noted as “RQ” or “on request.” A few days after, plaintiffs passenger's wishes does not necessarily translate into damages in the absence of bad faith.
returned to Tagunicar to confirm to Tokyo-SF flight. After calling up defendant The settled rule is that the law presumes good faith such that any person who
Julieta Canilao of TWSI, Tagunicar told plaintiffs that their flight is now confirmed seeks to be awarded damages due to acts of another has the burden of proving
all the way and attached the confirmation stickers on the plane tickets. that the latter acted in bad faith or with ill motive. In the case at bar, we find
• A few days before the scheduled flight of plaintiffs, their son, Adrian Yu, called the the evidence presented by petitioners insufficient to overcome the presumption
Pan Am office to verify the status of the flight. According to said Adrian Yu, a of good faith. They have failed to show any wanton, malevolent or reckless misconduct
personnel of defendant Pan Am told him over the phone that plaintiffs' booking[s] imputable to respondent Pan Am in its refusal to accommodate petitioners in its Tokyo-San
are confirmed. Francisco flight. Pan Am could not have acted in bad faith because petitioners did not have
• Plaintiffs left for HK and stayed there for 5 days. Upon arrival in Tokyo, they called confirmed tickets and more importantly, they were not in the passenger manifest.
up the PanAm office to reconfirm their booking. However, they were informed They were not confirmed passengers and their names were not listed
that their names were not in the passengers list. They could not stay in Japan for in the passenger manifest. In other words, this is not a case where Pan Am bound
more than 72 hours, thus they paid tickets for Taipei. Upon reaching Taipei, there itself to transport petitioners and thereafter reneged on its obligation. The persistent calls
were no flights available, thus, they were forced to head back to Manila. In view of made by respondent Tagunicar to Canilao, and those made by petitioners at the
the failure to reach NJ, the seller of the infrared heating system cancelled plaintiff’s Manila, Hongkong and Tokyo offices in Pan Am, are eloquent indications that
option to buy. petitioners knew that their tickets have not been confirmed. For, as correctly
• Canilao and TWSI denied the confirmation of the Tokyo-SF flight since the flights observed by Pan Am, why would one continually try to have one's ticket
then were really tight in view of NWA’s strike. Tagunicar claims that she only signed confirmed if it had already been confirmed?
the affidavit saying that she’s TWSI’s agent upon the assurance of plaintiff’s lawyer
that she will not be involved in the case. PanAm denies that plaintiffs were bumped
off their flights since they were not even included in the flight manifest.
ISSUES & ARGUMENTS
1. W/N Tagunicar is PanAm’s agent, making the latter liable for the acts of the
former.
2. W/N PanAm is liable for its refusal to admit plaintiffs in its flight.
1. No. Affidavits, being taken ex parte, are almost always incomplete and often
inaccurate, sometimes from partial suggestion, or for want of suggestion and
inquiries. The circumstances under which said affidavit was prepared put in AYEN QUA
Page 439 of 528

395. Erlinda Francisco v. Ricardo Ferrer, Jr., et al. | Pardo breach of known duty through some motive or interest or ill will that partakes of the
G.R. No. 142029, February 28, 2001 | 353 SCRA 261 nature of fraud.
• Moral damages are in the category of an award designed to compensate the claimant
FACTS for actual injury suffered and not to impose a penalty on the wrongdoer.
• Mrs. Rebecca Lo and her daughter Annette Ferrer ordered a 3-layered cake from • The person claiming moral damages must prove the existence of bad faith by clear
Fountainhead Bakeshop. It was agreed that the wedding cake shall be delivered at and convincing evidence for the law always presumes good faith. It is not enough
5:00 in the afternoon on December 14, 1992 at the Cebu Country Club, Cebu City. that one merely suffered sleepless nights, mental anguish, serious anxiety as the
• Plaintiffs made their full payment. result of the actuations of the other party. Mere allegations of besmirched
• At 7:00 in the evening, the wedding cake has not arrived. Plaintiffs made a follow-up reputation, embarrassment and sleepless nights are insufficient to warrant an award
call and were informed that it was probably late because of the traffic. for moral damages. An award of moral damages would require certain conditions to
• At 8:00, plaintiffs were informed that no wedding cake will be delivered because the be met, to wit: (1) first, there must be an injury, whether physical, mental or
order slip got lost. They were then compelled to buy the only available cake at the psychological, clearly sustained by the claimant; (2) second, there must be culpable
Cebu Country Club which was a sans rival. act or omission factually established; (3) third, the wrongful act or omission of the
• At 10:00, a 2-layered wedding cake arrived. Plaintiffs declined to accept it. defendant is the proximate cause of the injury sustained by the claimant; and (4)
• Defendant Erlinda Francisco sent a letter of apology accompanied with a P5,000.00 fourth, the award of damages is predicated on any of the cases stated in Article
check which was declined by plaintiffs. 2 weeks after the wedding, Francisco called 2219” of the Civil Code.
Mrs. Lo and apologized. • When awarded, moral damages must not be palpably and scandalously excessive as
• Plaintiffs filed an action for breach of contract with damages. to indicate that it was the result of passion, prejudice or corruption on the part of
• TC decided in favor of plaintiffs, directing defendant to pay the cost of the wedding the trial court judge or appellate court justices.
cake, MORAL DAMAGES, attorney’s fees and the cost of litigation. • In this case, we find no such fraud or bad faith.
• CA modified the award by increasing the MORAL DAMAGES to P250,000.00 and
awarding EXEMPLARY DAMAGES of P100,000.00. CA ALSO ERRED IN AWARDING EXEMPLARY DAMAGES.
• To warrant the award of exemplary damages, [t]he wrongful act must be
ISSUES & ARGUMENTS accompanied by bad faith, and an award of damages would be allowed only if the
guilty party acted in a wanton, fraudulent, reckless or malevolent manner.
1. W/N the CA erred in affirming the TC’s award of MORAL DAMAGES and • The requirements of an award of exemplary damages are: (1) they may be imposed
increasing the amount from P30,000.00 to P250,000.00. by way of example in addition to compensatory damages, and only after the
2. W/N the CA was justified in awarding in addition to moral damages, claimant’s right to them has been established; (2) that they can not be recovered as a
EXEMPLARY DAMAGES of P100,000.00. matter of right, their determination depending upon the amount of compensatory
Petitioner- CA and TC erred in awarding moral damages because moral damages that may be awarded to the claimant; (3) the act must be accompanied by
damages are recoverable in breach of contract cases only where the breach was bad faith or done in a wanton, fraudulent, oppressive or malevolent manner.
palpably wanton, reckless, malicious, in bad faith, oppressive or abusive.
NOMINAL DAMAGES awarded.
HOLDING & RATIO DECIDENDI • The facts show that when confronted with their failure to deliver on the wedding
day, petitioners gave the lame excuse that delivery was probably delayed because of
YES. CA ERRED IN AWARDING MORAL DAMAGES. the traffic, when in truth, no cake could be delivered because the order slip got lost.
• Article 2219 of the Civil Code provides: “To recover moral damages in an action for For such prevarication, petitioners must be held liable for nominal damages for
breach of contract, the breach must be palpably wanton, reckless, malicious, in bad insensitivity, inadvertence or inattention to their customer’s anxiety and need of the
faith, oppressive or abusive.” hour.
• In culpa contractual or breach of contract, moral damages may be recovered when • Nominal damages are recoverable where a legal right is technically violated and must
the defendant acted in bad faith or was guilty of gross negligence (amounting to bad be vindicated against an invasion that has produced no actual present loss of any
faith) or in wanton disregard of his contractual obligation and, exceptionally, when kind or where there has been a breach of contract and no substantial injury or actual
the act of breach of contract itself is constitutive of tort resulting in physical injuries. damages whatsoever have been or can be shown.
• Bad faith does not simply connote bad judgment or negligence, it imports a
dishonest purpose or some moral obliquity and conscious doing of a wrong, a
Page 440 of 528
not for indemnifying the plaintiff for any loss suffered.
Petition granted. CA reversed. Petitioner order to pay the cost of the wedding cake, nominal damages of
P10,000.00, attorney’s fees and the costs of litigation.
TIN OCAMPO-TAN
Page 441 of 528

396. Prudential Bank v. CA | Quisumbing LETICIA IS ONLY ENTITLED TO P20,000 (NOT P50,000)
G.R. No. 125536, March 16, 2000| 328 SCRA 264 • The law allows the grant of exemplary damages by way of example for the public
good.
FACTS • The level of meticulousness must be maintained at all times by the banking sector.
• Leticia Tupasi-Valenzuela had a current account with Prudential Bank, the balance Hence, the Court of Appeals did not err in awarding exemplary damages. In our
of which on 21 June 1988 was about P36K. view, however, the reduced amount of P20,000.00 is more appropriate.
• She issued a post-dated check (20 June 1997) for P11,500, drawn upon her account
in Prudential Bank, in favor of Legaspi for payment of jewelry.
• The check was indorsed to Philip Lhuiller. Lhullier subsequently deposited the
check but it was dishonored for having insufficient funds.
• Leticia went to Prudential Bank to clarify the matter because it was her belief that
she had the sufficient funds to cover the amount of the check since she deposited
into her account a check for P35K on 1 June 1988.
• She presented her passbook to the bank officer as evidence, but the same was set
aside because according to the officer the best evidence of sufficiency of funds was
the ledger furnished by the bank which did, in fact, show an insufficiency.
• Leticia found out that the check she deposited on 1 June had been cleared only on
24 June, 23 days after the deposit. The P11,500.00 check was redeposited by
Lhuillier on June 24, 1988, and properly cleared on June 27, 1988.
ISSUES & ARGUMENTS

1. W/N Leticia is entitled to Moral Damages amounting to P`100,000.
o Petitioner’s Argument: Bank acted in good faith and that is was an
honest mistake, therefore moral damages cannot be asked of them.
o Respondent’s Argument: while it may be true that the bank's negligence
in dishonoring the properly funded check of Leticia might not have been
attended with malice and bad faith, it is the result of lack of due care and
caution expected of an employee of a firm engaged in so sensitive and
accurately demanding task as banking
2. W/N Leticia is entitled to Exemplary Damages amounting to P 50,000.
o Petitioner’s Argument: Bank acted with due diligence.
o Respondent’s Argument: The Bank did not practice due diligence and
the public relies on the banks' sworn profession of diligence and
meticulousness in giving irreproachable service.
LETICIA IS ENTITLED TO P100,000 as MORAL DAMAGES

• The bank's negligence was the result of lack of due care and caution required of
managers and employees of a firm engaged in so sensitive and demanding business
as banking. Accordingly, the award of moral damages by the respondent Court of
Appeals could not be said to be in error nor in grave abuse of its discretion
CHESKA RESPICIO
Page 442 of 528

397 Cathay Pacific Airways v. Spouses Vasquez| Davide SPOUSES MAY ENTITLED ONLY TO NOMINAL DAMAGES
G.R. No. 150843 March 14, 2003 • The court did not award them even nominal damages, they just made mention that
Nominal Damages is the most the spouses may claim: According to article 2221:
FACTS o Article 2221. Nominal damages are adjudicated in order that a right of the
• The Spouses Vasquez went to HongKong via Cathay Pacific Airlines. Included in plaintiff, which has been violated or invaded by the defendant, may be
the trip was their maid who rode in the tourist class, and 2 friends who rode with vindicated or recognized, and not for the purpose of indemnifying the
them in the business class cabin. plaintiff for any loss suffered by him.
• On the way back to Manila, the spouses presented their boarding passes to the
attendant. The attendant informed them that their seats have been upgraded to first
class because they were Marco Polo Club Members (frequent flyer club) and they
had such the privilege of a free upgrade in seating accommodations when such is
available.
• The spouses did not want to change their seats because they felt that they should be
seated with their friends with whom they had traveled and Dr. Vasquez had business
matters he wanted to discuss with them.
• The attendant, however, insisted that they take the seats because the flight has been
overbooked and the only way for them to get in this flight was to take the first class
upgrade. They took in reluctantly for want to be with their friends.
• When they returned back to Manila, they demanded from Cathay Pacific damages of
up to P1M, including Moral Damages.
ISSUES & ARGUMENTS
W/N Spouses Vasquez are entitled to MORAL DAMAGES, if not should they be
indemnified in another manner.
NO. SPOUSES ARE NOT ENTITLED TO MORAL DAMAGES AS THERE

WAS NO BAD FAITH ON THE PART OF CATHAY PACIFIC OR ITS
ATTENDANTS.
• The spouses knew that they were members of the Marco Polo Club and that they
had such privileged. But privileges, as known to us, can be waived. The flight
attendant whould have consulted the spouses if they wanted to avail of that privilege
before their business class seats were given to someone else and not surprise them,
as like what happened in this case.
• The spouses clearly waived such privilege, therefore Cathay Pacific breached the
• It is essential, however, that there exists bad faith or malice when in breach of the
contract of carriage. The attendants changed the seat accommodations without such
malice. Bad faith imports a dishonest purpose or some moral obliquity which was
not present in this case.
CHESKA RESPICIO
Page 443 of 528

398. Lao vs. CA | Grino-Aquino
G.R. No. 82808, July 11, 1991 | 199 SCRA 58
FACTS
• Dennis Lao was an employee of New St. Joseph Lumber owned by Chan Tong
• St. Joseph filed a collection suit and an Estafa case against Benjamin Espiritu, a
customer for unpaid purchases of construction supplies
• Lao was ordered by Tong to sign an affidavit prepared by Atty. Querubin
• Espiritu filed a case of malicious persecution against Lao and St. Joseph
• The trial court rendered judgment against Lao and St. Joseph who were ordered to
pay Espiritu jointly and severally P100,00 as moral damages, P5,000 as Attorney’ s
fees and costs
• Espiritu levied on petitioner’s car because no more assets could be seized
ISSUES & ARGUMENTS
W/N Lao can be held liable for damages and such sums may be satisfied by
execution against employee’s property because St. Joseph is closed
NO. LAO SHOULD NOT BE HELD LIABLE AS HE HAD A VALID

DEFENSE. HIS EMPLOYER FORCED HIM TO SIGN THE COMPLAINT.
• Elements to maintain action for damages based on malicious prosecution:
• The fact of prosecution and the further fact that plaintiff himself was the prosecutor
and the action was finally terminated with an acquittal
• That in bringing the action, the prosecutor acted without probable cause
• The prosecutor was actuated or impelled by legal malice
• Lao was only witness and not prosecutor in the Estafa case.Lao made the affidavit
as an employee who had personal knowledge of the transaction. The prosecution for
Estafa did not prosper but the unsuccessful prosecution may be labeled as libelous.
Hence, the judgment against Lao is a nullity and should be set aside.
DEANNE REYES
Page 444 of 528

399. Rosario Lao and George Felipe Jr., vs. CA, and Frank Duena |Kapunan
FACTS
• Antonio was bumped by a speeding jeep while he and his family were walking on a
sidewalk. This jeep was driven by Felipe. The latter got out of the jeep and
threatened Antonio, then ran towards his house located near the area of the
accident.
• Unable to walk as his legs were hit by the jeep, Antonio then sought the help of
the barangay councilman Deuna. Deuna then brought policemen ot the scene of
the incident. The policemen then seized the jeep since Felipe was nowhere to be
found, and then informed Felipe's about it.
• Felipe and Lao then filed a complaint against the Anti-carnapping Task Force,
alleging that Antonio and Frank together with their companions forcibly took the
jeep from Felipe's house. This was dismissed by the DOJ for lack of evidence to
establish probably cause.
• Thereafter, Antonio and Deuna filed an action for malicious prosecution against
Felipe and Lao.
ISSUES & ARGUMENTS
Whether or not Felipe and Lao are liable for malicious prosecution?
Yes, petitioners are liable.

• Indeed, the mere act of submitting a case to the authorities for prosecution does not
make one liable for malicious prosecution, for the law could not have meant to
impose a penalty on the right to litigate. To constitute malicious prosecution and
hold defendant liable, there must be proof that the prosecution was prompted by a
sinister design to vex and humiliate a person and that the prosecution was initiated
with the deliberate knowledge that the charge was false and baseless.
• The elements of malice and absence of probable cause are present in the instant
case.
• Lao knew that private respondent, with policemen, had taken the vehicle to the
Sangandaan police station after the traffic incident. As pointed out by respondent
appellate court, Rosario cannot validly claim that, prior to the filing of the
complaint-affidavit for carnapping, she did not know the whereabouts of the
vehicle.
• As to the absence of probable cause, it was established that there was clearly no
intent to gain on the part of respondents and the police, which is essential for the
crime of carnapping. The vehicle was turned over to the police station because it
was in connection with the charge of frustrated homicide against Felipe.
JR RUIZ
Page 445 of 528

400. Lehner V. Martires v. Ricardo Cokieng | Chico-Nazario To the mind of this Court, the twin elements of probable cause and malice are lacking in
G.R. No. 10192, Feb. 17, 2005 | the case at bar to entitle petitioner to damages he now seeks out. For one, it is an
elementary rule in this jurisdiction that good faith is presumed and that the burden of
FACTS proving bad faith rests upon a party alleging the same.[28] In the case at bar, petitioner has
Petitioner Lehner V. Martiresand respondent Ricardo C. Cokieng were contemporaries failed to prove bad faith on the part of respondents. For another, there are no factual
in Xavier School and in the De La Salle University. Both later built their own respective allegations in the complaint that can support a finding that malice and bad faith
business pursuits; petitioner with his Durabuilt Company and Ricardo Cokieng with his motivated the respondents in filing the two informations against petitioner. Allegations
Phil-Air Conditioning Center, which he jointly owned with his brother and co- of bad faith, malice, and other related words without ultimate facts to support the same
respondent Regino Cokieng. Phil-Air Conditioning Center was engaged in the are mere conclusions of law. [29] From our reading of the complaint for damages arising
distribution and sale of Carrier air-conditioners and refrigeration units. from malicious prosecution and from the records of the case, we find no ultimate facts
Sometime in 1992, petitioner joined Phil-Air Conditioning Center as its agent. For his to buttress these conclusions of law.
services, petitioner would receive commission and a fixed monthly salary. This CA affirmed. Petition dismissed.
arrangement was done informally, with no written contract governing them. In
September 1994, as a result of a verbal tussle between the former classmates, the ties
between the duo ended in antipathy, with petitioner resigning from Phil-Air.
Regino Cokieng Filed an Estafa Case against Lehner, the latter was invited for
investigation by PNP criminal investigation. The PNPCI recommended to file the action
before the proper court. However, Regino did not proceed with the case.
Ricardo on the other hand filed an unjust vexation case against Lehner because the latter
took the checking account of the former without authority. Lehner also failed to render
the accounting of the business when he was asked by Ricardo.
Lehner was acquitted for the the crime of unjust vexation. He filed a case for damagaes
on the ground of malicious prosecution against the Cokiengs. CA dismissed the case.
ISSUES & ARGUMENTS
Whether the court of appeals erred in ruling that Lehner failed to shoe cause of
action for damages based on malicious prosecution

There is malicious prosecution when a person directly insinuates or imputes to an
innocent person the commission of a crime and the accused is compelled to defend
himself in court. While generally associated with unfounded criminal actions, the term
has been expanded to include unfounded civil suits instituted just to vex and humiliate
the defendant despite the absence of a cause of action or probable cause.[25]
To merit the award of damages in a case of malicious prosecution, the aggrieved party
must prove: (1) that he has been denounced or charged falsely of an offense by the
defendant, (2) that the latter knows that the charge was false or lacks probable case, (3)
that the said defendant acted with malice, and, of course, (4) the damages he has
suffered.[26] The elements of want of probable cause and malice must simultaneously
exist; otherwise, the presence of probable cause signifies, as a legal consequence, the
absence of malice.[27] On these, there must be proof that the prosecution was prompted
by a sinister design to vex and humiliate a person, and that it was initiated deliberately
knowing that the charge was false and baseless to entitle the victim to damages.
DIKKI SIAN
Page 446 of 528

401. Yasoña Vs. De Ramos| Corona HOLDING & RATIO DECIDENDI
G.R. No. 156339 October 6, 2004| GR 156339
YES, petitioner must be held liable for malicious prosecution.
FACTS • In this jurisdiction, the term "malicious prosecution" has been defined as "an action
for damages brought by one against whom a criminal prosecution, civil suit, or other
• In November 1971, Aurea Yasoña and her son, Saturnino, went to the house of legal proceeding has been instituted maliciously and without probable cause, after
Jovencio de Ramos to ask for financial assistance in paying their loans to PNB, the termination of such prosecution, suit, or other proceeding in favor of the
otherwise their residential house and lot would be foreclosed. defendant therein."
• Inasmuch as Aurea was his aunt, Jovencio acceded to the request. They agreed • To constitute "malicious prosecution," there must be proof that the prosecution was
that, upon payment by Jovencio of the loan to PNB, half of Yasoñas’ subject prompted by a sinister design to vex or humiliate a person, and that it was initiated
property would be sold to him. deliberately by the defendant knowing that his charges were false and groundless.5
• On December 29, 1971, Jovencio paid Aurea’s bank loan. As agreed upon, Aurea Concededly, the mere act of submitting a case to the authorities for prosecution
executed a deed of absolute sale in favor of Jovencio over half of the lot does not make one liable for malicious prosecution.
consisting of 123 square meters. Thereafter, the lot was surveyed and separate • In this case, however, there is reason to believe that a malicious intent was behind
titles were issued by the Register of Deeds of Sta. Cruz, Laguna in the names of the filing of the complaint for estafa against respondents. The records show that the
Aurea (TCT No. 73252) and Jovencio (TCT No. 73251). sale of the property was evidenced by a deed of sale duly notarized and registered
• 22 years later, in August 1993, Aurea filed an estafa complaint against brothers with the local Register of Deeds. After the execution of the deed of sale, the
Jovencio and Rodencio de Ramos on the ground that she was deceived by them property was surveyed and divided into two portions. Separate titles were then
when she asked for their assistance in 1971 concerning her mortgaged property. issued in the names of Aurea Yasoña (TCT No. 73252) and Jovencio de Ramos
• In her complaint, Aurea alleged that Rodencio asked her to sign a blank paper on (TCT No. 73251). Since 1973, Jovencio had been paying the realty taxes of the
the pretext that it would be used in the redemption of the mortgaged property. portion registered in his name. In 1974, Aurea even requested Jovencio to use his
Aurea signed the blank paper without further inquiry because she trusted her portion as bond for the temporary release of her son who was charged with
nephew, Rodencio. Thereafter, they heard nothing from Rodencio and this malicious mischief. Also, when Aurea borrowed money from the Rural Bank of
prompted Nimpha Yasoña Bondoc to confront Rodencio but she was told that Lumban in 1973 and the PNB in 1979, only her portion covered by TCT No. 73252
the title was still with the Register of Deeds. However, when Nimpha inquired was mortgaged.
from the Register of Deeds, she was shocked to find out that the lot had been • All these pieces of evidence indicate that Aurea had long acknowledged Jovencio’s
divided into two, pursuant to a deed of sale apparently executed by Aurea in favor ownership of half of the property. Furthermore, it was only in 1993 when
of Jovencio. Aurea averred that she never sold any portion of her property to petitioners decided to file the estafa complaint against respondents. If petitioners
Jovencio and never executed a deed of sale. Aurea was thus forced to seek the had honestly believed that they still owned the entire property, it would not have
advice of Judge Enrique Almario, another relative, who suggested filing a taken them 22 years to question Jovencio’s ownership of half of the property. The
complaint for estafa. only conclusion that can be drawn from the circumstances is that Aurea knew all
• On February 21, 1994, the prosecutor dismissed the criminal complaint for estafa along that she was no longer the owner of Jovencio’s portion after having sold it to
for lack of evidence. On account of this dismissal, Jovencio and Rodencio filed a him way back in 1971. Likewise, other than petitioners’ bare allegations, no other
complaint for damages on the ground of malicious prosecution with the RTC. evidence was presented by them to substantiate their claim.
• They alleged that the filing of the estafa complaint against them was done with • Malicious prosecution, both in criminal and civil cases, requires the elements of (1)
malice and it caused irreparable injury to their reputation, as Aurea knew fully well malice and (2) absence of probable cause. These two elements are present in the
that she had already sold half of the property to Jovencio. present controversy. Petitioners were completely aware that Jovencio was the
• The RTC decided in against petitioner Yasoña, who then filed certiorari under rightful owner of the lot covered by TCT No. 73251, clearly signifying that they
Rule 65 were impelled by malice and avarice in bringing the unfounded action. That there
was no probable cause at all for the filing of the estafa case against respondents led
ISSUES & ARGUMENTS to the dismissal of the charges filed by petitioners with the Provincial Prosecutor’s
Office in Siniloan, Laguna.
W/N petitioner should be held liable for damages for malicious prosecution
FRANK TAMARGO
Page 447 of 528
402. Audion Electric Co., Inc. v NLRC | Gonzaga-Reyes employees and considered regular employees. Further the failure of Audion to
G.R. No. 106648 June 17, 1999 | submit reports of termination supports the claim of Madolid that he was indeed a regular
employee.
FACTS
• Nicolas Madolid was employed by Audion Electric Company on June 30, 1976 as a
fabricator and continuously rendered services assigned in different offices or
projects as helper electrician, stockman and timekeeper. He has rendered thirteen
(13) years of continuous, loyal and dedicated service with a clean record.
• On August 3, Madolid was surprised to receive a letter informing him that he will be
considered terminated after the turnover of materials, including respondent’s tools
and equipments not later than August 15, 1989.
• Madolid claims that he was dismissed without justifiable cause and due process and
that his dismissal was done in bad faith which renders the dismissal illegal. He prays
for reinstatement with full backwages as well as moral and exemplary damages.
• LA Iniego ruled in favor of Madolid. Upon appeal to NLRC, the latter dismissed the
same. Hence this appeal.
ISSUES & ARGUMENTS
W/N the award of moral and exemplary damages in this case was proper?
NO. Such award must be deleted for being devoid of legal basis. Moral and
exemplary damages are recoverable only where the dismissal of an employee was
attended by bad faith or fraud, or constituted an act oppressive to labor, or were
done in a manner contrary to morals, good customs or public policy.
• The person claiming moral damages must prove the existence of bad faith by clear
and convincing evidence for the law always presumes good faith. It is not enough
that one merely suffered sleepless nights, mental anguish, serious anxiety as the
result of the actuations of the other party, which is the basis made by Madolid for
claiming moral and exemplary damages in this case.
There was also an issue of whether or not Madolid should be considered a regular
or a project employee. The Court held that Madolid’s employment status was
established by the Certificate of Employment dated April 10, 1989 issued by
Audion Electric which certified that Madolida is a bonfide employee of the
former from June 30, 1976 up to the time the certification was issued on April 10,
1989. The same certificate of employment showed that private respondent’s exposure
was regularly and continuously employed by Audion in various job assignments from
1976 to 1989, for a total of 13 years. The Court reminded the parties of its ruling that
where the employment of project employees is extended long after the supposed TEL VIRTUDEZ
project has been finished, the employees are removed from the scope of project
Page 448 of 528
403. NEECO I vs NLRC| Quisumbing
GR No. 116066 January 24, 2000| ISSUES & ARGUMENTS
FACTS Whether the NLRC’s decision not to award Moral and Exemplary damages was
proper?
• Petitioners Reynaldo Fajardo, Ernesto Marin, Ever Guevarra, Petronilo Baguisa,
Victorino Carillo, and Erdie Javate were permanent employees of respondent Nueva HOLDING & RATIO DECIDENDI
Ecija I Electric Cooperative (NEECO I).
• They were members of petitioner NEECO I Employees Association, a labor No.
organization established for the mutual aid and protection of its members. Petitioner
Rodolfo Jimenez was the president of the association. To warrant an award of moral damages, it must be shown that the dismissal of the
• The management of NEECO I is vested on the Board of Directors. Respondent employee was attended to by bad faith, or constituted an act oppressive to labor, or was
Patricio dela Peña was NEECO's general manager on detail from NEA. done in a manner contrary to morals, good customs or public policy.
• On February 7, 1987, the Board of Directors adopted Policy No. 3-33, which set the
guidelines for NEECO I's retirement benefits. On October 28, 1987, all regular Clearly, therefore, complainants have established the fact that they were illegally
employees were ordered by NEECO I to accomplish Form 87, which were dismissed by the respondents and their illegal dismissal was even tainted with unfair
applications for either retirement, resignation, or separation from service. labor practice act. Unfair labor practices violate the constitutional rights of workers and
• On October 5, 1991 and February 28, 1992, the applications of Petronilo Baguisa employees to self-organization, are inimical to the legitimate interests of both labor and
and Ever Guevarra, respectively, were approved. They were paid the appropriate management, including their right to bargain collectively and otherwise deal with each
separation pay. other in an atmosphere of freedom and mutual respect; and disrupt industrial peace and
• These successive events, followed by the promotion of certain union officers to hinder the promotion of healthy and stable labor-management relations.
supervisory rank, caused apprehension in the labor association. They were
considered as harassment threatening the union members, and circumventing the
employees' security of tenure.
• On February 29, 1992, to strengthen and neutralize management's arbitrary moves,
the union held a "snap election" of officers.
• On March 3, 1992, petitioner labor association passed a resolution withdrawing the
applications for retirement of all its members.
• On March 4, March 17, and April 7, 1992, petitioners Ernesto Marin, Reynaldo
Fajardo and Victorino Carillo were compulsorily retired by management. They
received their separation pay under protest on March 16, March 18, and April 15,
1992, respectively.
• On August 21, 1991, Erdie Javate was terminated from employment allegedly due to
misappropriation of funds and dishonesty. He was not paid separation or retirement
benefits.
• On March 29, 1992, petitioners and Erdie Javate instituted a complaint for illegal
dismissal and damages with the NLRC Regional Arbitration Branch in San
Fernando. They alleged they were purposely singled out for retirement from a listing
of employees who were made to submit retirement forms, even if they were not on
top of the list because they were union officers, past officers or active members of
the association.
• The labor Arbiter ruled in favor of the employees but the NLRC eliminated the
award of Moral and Exemplary Damages.
SATURDAY ALCISO
Page 449 of 528
404. Rutaquio vs. NLRC
FACTS
Jose Rutaquio and Erlinda Villareal were Savings Bookkeeper and Cashier of Rural Bank
of Baler, respectively. Upon auditing and inspection of MY Mateo and Co. (CPA of the
bank) of the records, it found out that certain accounts exceeded the entries of journals
and ledgers of the bank and that some transactions were not timely recorded. This
prompted them to recommend disciplinary action against the two which the bank
heeded through its President (Flordeliza Carpio) by approving a Resolution pursuant
thereto. They then sought formal resignation of the two, which the latter questioned
through a letter expressing that they would only accede to the discipline if it will be
dispensed with in the proper venue. The bank then ratiocinated that the employees’ acts
were prejudicial to the bank which subjected it to penalties from the Central Bank. The
refusal of the two subsequently led to their dismissal. They then sued the bank for illegal
dismissal and prayed for reinstatement and certain back pays. NLRC ruled in their favor
but instead did not compel reinstatement due to strained relations and awarded moral
damages and attorney’s fees. CA deleted the latter awards upon appeal of the bank.
ISSUES & ARGUMENTS

Whether CA was correct in deleting award for moral damages and attorney’s fees.

Yes but not the Attorney’s fees. In this case the employees failed to state the facts and
substantiate the same, which served as basis for the award of moral damages. In the
absence of bad faith on the part of the employer in dismissing them, an award for moral
damages is not proper. Citing the case of Lopez v. Javier Moral damages in labor cases are
recoverable only when the dismissal is attended by bad faith or fraud, or constituted an
act oppressive to labor, or was done in a manner contrary to morals, good customs or
public policy. As to the attorney’s fees: it is settled that in actions for recovery of wages
or where an employee was forced and constrained to litigate and incur expenses in order
to protect his rights or interests, the ward of attorney’s fees is morally and legally
justified.
JOY ADRANEDA
Page 450 of 528
405. Paguio vs. PLDT| Mendoza grave abuse of discretion, bearing in mind the basic elements of justice and fair play.
G.R. No. 154072, December 3, 2002| Having the right should not be confused with the manner by which such right is to
be exercised. As found by both the NLRC and the Court of Appeals, there is no
FACTS clear justification for the transfer of petitioner except that it was done as a result of
petitioner’s disagreement with his superiors with regard to company policies.
• Petitioner Alfredo S. Paguio was appointed Head of PLDT’s Garnet Exchange. He • Petitioner is entitled to an award of moral and exemplary damages. The Court
reported to the Head of the Greater Metro Manila (GMM) East Center, Rodolfo R. has held that in determining entitlement to moral damages, it suffices to prove that
Santos, one of the respondents herein. the claimant has suffered anxiety, sleepless nights, besmirched reputation and social
• Paguio sent Santos memoranda criticizing the performance ranking of the GMM humiliation by reason of the act complained of. Exemplary damages, on the other
exchanges and requested reconsideration of the implementation of the East Center hand, are granted in addition to moral damages "by way of example or correction
OPSIM Manpower Rebalancing as such was unfair to the Garnet Exchange. for the public good." Furthermore, as petitioner was compelled to litigate and incur
Subsequently, respondent Santos issued a memorandum reassigning petitioner to a expenses to enforce and protect his rights, he is entitled to an award of attorney’s
position in the Office of the GMM East Center Head for Special Assignments. fees. The amount of damages recoverable is, in turn, determined by the business,
• Protesting the said transfer, petitioner asked Ferido for a formal hearing but the social and financial position of the offended parties and the business and financial
transfer was affirmed based on the conclusion “that [petitioner is] not a team player position of the offender.
and cannot accept decisions of management already arrived at, short of
insubordination." This was again affirmed by respondent Enrique Perez, Senior
EVP and COO of PLDT explaining that the action was not disciplinary and did not
require compliance with the process of investigation, confrontation, and evaluation
before implementation.
• As a result, petitioner filed a complaint for illegal demotion and damages against
respondents. The Labor Arbiter dismissed the complaint on the ground that
petitioner’s transfer was an exercise of a management prerogative and there was no
showing that the same amounted to a demotion in rank and privileges. Petitioner
then appealed to the NLRC, which reversed the decision of the Labor Arbiter
stating that there was a diminution of his salary, benefits, and other privileges as he
was assigned a functionless position and deprived of the opportunity to get a
performance-based promotion or a wage increase. The award included a
reinstatement and a wage increase. The CA and SC affirmed but disagreed as to the
award of salary increases.
ISSUES & ARGUMENTS
W/N petitioner Paguio is entitled to damages?
YES, PETITIONER IS ENTITLED TO DAMAGES

• Under Article 21 of the Civil Code, any person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage. The illegal transfer of petitioner to a
functionless office was clearly an abuse by respondent PLDT of its right to
control the structure of its organization. The right to transfer or reassign an
employee is decidedly an employer’s exclusive right and prerogative. In several cases,
however, we have ruled that such managerial prerogative must be exercised without BON ARCILLA
Page 451 of 528

406. Globe Telecom, Inc. vs. Florendo-Flores| Bellosillo benefits due to another of her rank and position, benefits which she apparently used
GR. No.- 150092, September 27, 2002 | 390 SCRA 200 to receive.
FACTS ENTITLED TO BAKWAGES BUT NOT TO ACTUAL, MORAL AND

EXEMPLARY DAMAGES.
• Private Respondent was the Senior Account Manager for Northern Luzon of Globe • It should be noted that the award of backwages is justified upon the finding of
Telecom. She filed a complaint with the NLRC for constructive dismissal against illegal dismissal, and not under the principle of act of grace for past services rendered.
Globe and some of its officials. According to her affidavit, Cacholo Santos, her There are occasions when the Court exercises liberality in granting financial awards
immediate superior (1) never accomplished and submitted her performance to employees, but even then they contemplate only the award of separation pay
evaluation report thereby depriving her of salary increases, bonuses, and other and/or financial assistance, and only as a measure of social justice when the
incentives which other employees of the same rank had been receiving; (2) reduced circumstances of the case so warrant, such as instances of valid dismissal for causes
her to a house-to-house selling agent of company products (“handyphones”) despite other than serious misconduct or those reflecting on the employees’ moral
her rank as supervisor of company dealers and agents; (3) never supported her in the character. Proper regard for the welfare of the labor sector should not dissuade us
sales programs and recommendations she presented; and (4) withheld all her other from protecting the rights of management such that an award of back wages should
benefits, i.e. gasoline allowance, per diems, representation allowance and car be forthcoming only when valid grounds exist to support it.
maintenance, to her extreme pain and humiliation. • An award of actual or moral damages is not proper as the dismissal is not shown to
• Petitioners averred that before the filing of the complaint, private respondent went be attended by bad faith, or was oppressive to labor, or done in a manner contrary
AWOL without signifying whether she was resigning. That notwithstanding, there to morals, good customs, or public policy. Exemplary damages are likewise not
was no official act which called for her termination and diminution in rank, seniority proper as these are imposed only if moral, temperate, liquidated or compensatory
and benefits. damages are awarded.
• Labor Arbiter adjudged illegal dismissal and ordered reinstatement and payment of
full backwages. Respondent was also awarded exemplary damages on account of
the company’s negligence in monitoring all its key personnel, and attorney’s fees.
• On appeal, the NLRC held that although private respondent abandoned her
employment she was nonetheless entitled to backwages as an act of grace of Globe.
CA then affirmed.
ISSUES & ARGUMENTS

________________________________________________________________
1. W/N respondent was constructively dismissed.

2. W/N the payment of backwages and damages was in order.
YES. ALTHOUGH RESPONDENT CONTINUED TO HAVE THE RANK

OF A SUPERVISOR, HER FUNCTIONS WERE REDUCED TO A MERE
HOUSE-TO-HOUSE SALES AGENT OR DIRECT SALES AGENT. THIS
WAS TANTAMOUNT TO A DEMOTION.
• Constructive dismissal exists where there is cessation of work because “continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a
demotion in rank and a diminution in pay.”
• In this case, private respondent might not have suffered any diminution in her basic
salary but petitioners did not dispute her allegation that she was deprived of all
DANI BOLONG
Page 452 of 528

407. UST vs. CA | Corona • UST argues that Canicosa’s first cause of action under his counterclaim was the
G.R. No. 124250, October 18, 2004 | claim for damages for his alleged illegal dismissal as personnel health officer of
the hospital. As such, it was the NLRC and not the trial court which had
FACTS jurisdiction to hear the claim for damages, pursuant to PD 1691 which
• UST owns and operates the hospital known as the Santo Tomas University Hospital took effect on May 1, 1980.
(STUH). UST entered into a lease agreement with Dr. Librado Canicosa whereby • The complaint for ejectment was filed by petitioner on May 17, 1979 while
the latter a room in the hospital. Annexed to the lease agreement the following respondent’s answer with counterclaim was filed on June 27, 1979. At that
restriction …. No physician accepted as lessee shall maintain or offer in the time, PD 1367 was still the prevailing law. Petitioner alleges that, although the
leased premises any ancillary services which is being offered by the STUH case was filed during the effectivity of PD 1367 which vested the regular courts
(such as nuclear and other laboratory services, physiotherapy, x-ray, pharmacy, etc.). with jurisdiction over claims for damages arising from an employer-employee
• Canicosa acquired two diagnostic machines - a scintillation gamma camera and an relationship, that jurisdiction was removed from the courts when PD 1691 amended PD
up take machine. Because STUH had a similar diagnostic instrument, it sent a letter 1367 during the pendency of the case. PD 1691 restored to the labor arbiters and the
to Dr. Canicosa requesting the latter to remove his up take machine pursuant to the NLRC their jurisdiction over all money claims of workers and all other claims
limitation attached to the agreement arising from employer-employee relations, including moral and exemplary
• Canicosa rejected petitioner’s request, claiming that his machine was not in the damages.
hospital premises but in the room he was leasing from the hospital. Due to the • On the other hand, respondent maintains that once a court has assumed
refusal of respondent to remove his up take machine from Room 203 of STUH, jurisdiction over a case, its jurisdiction continues until the case is terminated.
• UST filed an ejectment complaint against Canicosa on the ground of violation of the • However, on May 1, 1980, during the pendency of this case, PD 1691 was
terms of the lease agreement promulgated, amending Section 1 of PD 1367:
• In his answer, Canicosa insisted that the up take machine was essential to his • ART. 217. Jurisdiction of the Labor Arbiter and the Commission. -- a) The
medical practice as an internist specializing in thyroidology. He also filed a Labor Arbiters shall have the original and exclusive jurisdiction to hear and
counterclaim seeking actual, moral and exemplary damages for the following decide the following cases involving all workers whether agricultural or non-
causes of action agricultural:[3) All money claims of workers, -xxx- 5) All other claims
• He was also dismissed as a personnel health officer as a result of the squabble. He arising from employer-employee relation, ]
thus filed a case for illegal dismissal at the National Labor Relations Commission • We now ask: did PD 1691 apply retroactively in this case so as to transfer
(NLRC) and demanded his reinstatement and payment of backwages. Canicosa jurisdiction over respondent’s claims for damages from the courts to the
claimed that his dismissal was a product of ill-will, revenge and harassment as he labor arbiter/NLRC? Yes.
earlier opposed the application for Filipino citizenship of the hospital administrator, • In Atlas Fertilizer Corporation vs. Navarro the Court had the occasion to rule on
Fr. Antonio Cabezon, O.P. On February 28, 1978, the labor arbiter entered a conflicts of jurisdiction between the courts and the labor agencies arising from
decision branding his dismissal as illegal and ordering his reinstatement to his the amendments to PD 1367 by PD 1691. The later law, PD 1691, is a curative
former position with full backwages. Petitioner appealed to the NLRC which statute which corrected the lack of jurisdiction of the labor arbiters at the start
affirmed the decision Petitioner elevated the case to the SC which affirmed the of the proceedings and therefore should be given retroactive application vis-a-vis
decisions of both the labor arbiter and the NLRC pending proceedings. It was intended to correct a situation where two different
• In the ejectment case, the RTC awarded Canicosa with damages arising from illegal tribunals had jurisdiction over separate issues arising from the same labor
dismissal conflict.
• This principle was reiterated in Victorias Milling Co., Inc. vs. Intermediate Appellate
ISSUES & ARGUMENTS Court where PD 1691 was given retroactive application as the amendment to
the law was crafted precisely to settle once and for all the conflict of jurisdiction
W/N the Dr. Canicosa is entitled to damages due to illegal dismissal between regular courts and labor agencies.
• We rule therefore that the award of damages by the trial court on the first
HOLDING & RATIO DECIDENDI cause of action of respondent’s counterclaim cannot be sustained as the
court a quo was bereft of jurisdiction to grant the same.
THE TC IS BEREFT OF JURISDICTION TO AWARD DR. CANICOSA
WITH DAMAGES.
GINO CAPATI
Page 453 of 528

408. Hemedes vs. CA| Gonzaga-Reyes o May 14, 1981, Dominium leased the property to its sister corporation
G.R. No. 107132 October 8, 1999 |SCRA Asia Brewery, Inc. (Asia Brewery) who, even before signing the
contract of lease, constructed two warehouses.
FACTS • R & B Insurance sent a letter to Asia Brewery informing the former of its
ownership of the property as evidenced by TCT No. 41985 issued in its favor
• An unregistered parcel of land was originally owned by the late Jose Hemedes, and of its right to appropriate the constructions since Asia Brewery is a builder
father of Maxima Hemedes and Enrique D. Hemedes. in bad faith.
• Jose Hemedes executed a document entitled "Donation Inter Vivos With Resolutory • Maxima Hemedes also wrote a letter addressed to Asia Brewery wherein she
Conditions" whereby he conveyed ownership over the subject land, together with asserted that she is the rightful owner of the subject property by virtue of OCT
all its improvements, in favor of his third wife, Justa Kausapin, subject to No. (0-941) 0-198 and that, as such, she has the right to appropriate Asia
following resolution condition (among two): Brewery's constructions, to demand its demolition, or to compel Asia Brewery
(a) Upon the death or remarriage of the DONEE, the title to the to purchase the land. In another letter, Maxima Hemedes denied the
property donated shall revert to any of the children, or their heirs, of execution of any real estate mortgage in favor of R&B Insurance.
the DONOR expressly designated by the DONEE in a public • Dominium and Enrique D. Hemedes filed a
document conveying the property to the latter. complaint with the CFI of Laguna for the annulment of TCT issued in favor of
o Pursuant to the condition above mentioned, Justa Kausapin executed a "Deed R & B Insurance and/or the reconveyance to Dominium of the subject
of Conveyance of Unregistered Real Property by Reversion" conveying to Maxima property.
Hemedes the subject property. Original Certificate of Title (OCT) No. (0-941) o Dominium was the absolute owner of the subject property by virtue
0-198 5 was issued in the name of Maxima Hemedes married to Raul of the February 28, 1979 deed of sale executed by Enrique D.
Rodriguez by the Registry of Deeds of Laguna on June 8, 1962, with the Hemedes, who in turn obtained ownership of the land from Justa
annotation that "Justa Kausapin shall have the usufructuary rights over the Kausapin, as evidenced by the "Kasunduan" dated May 27, 1971.
parcel of land herein described during her lifetime or widowhood." o Justa Kausapin never transferred the land to Maxima Hemedes
o It is claimed by R & B Insurance that Maxima Hemedes and her and that Enrique D. Hemedes had no knowledge of the registration
husband Raul Rodriguez constituted a real estate mortgage over the proceedings initiated by Maxima Hemedes.
subject property in its favor to serve as security for a loan which they • TC rendered judgment in favor of Dominium and Enrique Hemedes. CA
obtained. On February 22, 1968, R & B Insurance extrajudicially affirmed.
foreclosed the mortgage since Maxima Hemedes failed to pay the
loan even after it became due. The land was sold at a public auction ISSUES & ARGUMENTS
with R & B Insurance as the highest bidder and a certificate of sale
was issued by the sheriff in its favor. On May 21, 1975, The Register 1. Which of the two conveyances by Justa Kausapin, the first in favor of Maxima
of Deeds of Laguna cancelled OCT No. (0-941) 0-198 and issued Hemedes and the second in favor of Enrique D. Hemedes, effectively
Transfer Certificate of Title (TCT) No. 41985 in the name of R & B transferred ownership over the subject land.
Insurance. The annotation of usufruct in favor of Justa Kausapin 2. W/N R & B Insurance should be considered an innocent purchaser of the
was maintained in the new title. land in question (or a mortgagee in good faith), and if so, W/N R & B
• Despite the earlier conveyance of the subject land in favor of Maxima Insurance is entitled to moral damages.
Hemedes, Justa Kausapin executed a "Kasunduan" on May 27, 1971 whereby
she transferred the same land to her stepson Enrique D. Hemedes. HOLDING & RATIO DECIDENDI
o On February 28, 1979, Enriques D. Hemedes sold the property to
Dominium Realty and Construction Corporation (Dominium). 1.) The conveyance made by Justa Kausapin in favor of Maxima Hemedes
o On April 10, 1981, Justa Kausapin executed an affidavit affirming the transferred ownership over the subject land. The SC held that Dominium and
conveyance of the subject property in favor of Enrique D. Hemedes Enrique Hemedes have failed to produce clear, strong, and convincing evidence
as embodied in the "Kasunduan" dated May 27, 1971, and at the same to overcome the positive value of the "Deed Conveyance of Unregistered Real
time denying the conveyance made to Maxima Hemedes. Property by Reversion" — a notarized document. In upholding the deed of
conveyance in favor of Maxima Hemedes, the SC ruled that Enrique D. Hemedes
Page 454 of 528

and his transferee, Dominium, did not acquire any rights over the subject o Furthermore, even assuming that R & B Insurance was legally obliged to go
property. beyond the title and search for any hidden defect or inchoate right which could
defeat its right thereto, it would not have discovered anything since the
o Public respondent's finding that the "Deed of Conveyance of Unregistered Real mortgage was entered into in 1964, while the "Kasunduan" conveying the land
Property By Reversion" executed by Justa Kausapin in favor of Maxima to Enrique D. Hemedes was only entered into in 1971 and the affidavit
Hemedes is spurious is not supported by the factual findings in this case. It is repudiating the deed of conveyance in favor of Maxima Hemedes was
grounded upon the mere denial of the same by Justa Kausapin. executed by Justa Kausapin in 1981.
o The failure of Dominium and Enrique Hemedes to refute the due execution o It is a well-settled principle that where innocent third persons rely upon the
of the deed of conveyance by making a comparison with Justa Kausapin's correctness of a certificate of title and acquire rights over the property, the
thumbmark necessarily leads one to conclude that she did in fact affix her court cannot just disregard such rights. Otherwise, public confidence in the
thumbmark upon the deed of donation in favor of her stepdaughter. certificate of title, and ultimately, the Torrens system, would be impaired for
o Public respondent's reliance upon Justa Kausapin's repudiation of the deed of everyone dealing with registered property would still have to inquire at every
conveyance is misplaced for there are strong indications that she is a biased instance whether the title has been regularly or irregularly issued. Being an
witness. The trial court found that Justa Kausapin was dependent upon innocent mortgagee for value, R & B Insurance validly acquired
Enrique D. Hemedes for financial assistance. ownership over the property, subject only to the usufructuary rights of
o Clearly, article 1332 assumes that the consent of the contracting party imputing Justa Kausapin thereto, as this encumbrance was properly annotated
the mistake or fraud was given, although vitiated, and does not cover a situation upon its certificate of title
where there is a complete absence of consent. In this case, Justa Kausapin o Despite this ruling, R & B Insurance is not entitled to moral damages as
disclaims any knowledge of the "Deed of Conveyance of Unregistered Real it has not alleged nor proven the factual basis for the same.
Property by Reversion" in favor of Maxima Hemedes. In fact, she asserts that
it was only during the hearing conducted on December 7, 1981 before the trial
court that she first caught a glimpse of the deed of conveyance and thus, she
could not have possibly affixed her thumbmark thereto.
Thus, the donation in favor of Enrique D. Hemedes is null and void for the
purported object thereof did not exist at the time of the transfer, having
already been transferred to his sister. Similarly, the sale of the subject
property by Enrique D. Hemedes to Dominium is also a nullity for the latter
cannot acquire more rights than its predecessor-in-interest and is not an
innocent purchaser for value since Enrique D. Hemedes did not present any
certificate of title upon which it relied.
2.) Yes. R & B Insurance should be considered as an innocent purchaser of the

land in question (or a mortgagee in good faith), but R & B Insurance is not
entitled to moral damages.
o The TC and CA court found that Maxima Hemedes did in fact execute a
mortgage over the subject property in favor of R & B Insurance. This finding
shall not be disturbed
o The owner of a parcel of land may still sell the same even though such land is
subject to a usufruct; the buyer's title over the property will simply be restricted
by the rights of the usufructuary. Thus, R & B Insurance accepted the
mortgage subject to the usufructuary rights of Justa Kausapin. The annotation
of usufructuary rights in favor of Justa Kausapin upon Maxima Hemedes'
OCT does not impose upon R & B Insurance the obligation to investigate the
validity of its mortgagor's title. NICO CRISOLOGO
Page 455 of 528

409. Development Bank of the Philippines vs. Court of Appeals
FACTS
• Emerald Resort Hotel Corporation obtained a loan from DBP for 3.5 millions
pesos
• Thus ERHC mortgaged its property to DBP
• Since ERHC defaulted on the payment of its loan, DBP filed with the RTC
sheriff of Iriga an application for extrajudicial foreclosure sale of the said
mortgaged properties.
• It was alleged that sheriffs and other armed men entered the premises of
said Hotel when the foreclosure was executed
ISSUES & ARGUMENTS
Could ERHC demand moral damages?
No
• As a general rule, Corporations could not be awarded moral damages because
being an artificial person; a corporation has no feelings, no emotions, and no
senses.
• It cannot experience actual sufferings and mental anguish which is only
experienced by a person having a nervous system.
• The statement in PP vs Manero is only an obiter dictum, stating that the good
reputation of the company is debased, resulting in social humiliation, thus could
recover moral damages.
• Assuming that they can, still the company did not present enough proof to
warrant moral damages.
JOFEE CUENCA
Page 456 of 528

410. PAL vs. CA | GRIÑO-AQUINO, J As per Philippine law, under Aretciles 1764 and 2206 of the Civil Code, the award of
G.R. No. 55470, May 8, 1990 | 185 SCRA 110 damages for death is computed on the basis of life the life expectancy of the deceased
and not of his beneficiary.
FACTS
In the case of Davila vs PAL, the SC in that case determined not only PAL’s liability for
• On November 23, 1960 at 5:30 pm., Starlight Flight #26 of the Philippine Airlines negligence but also the manner of computing the damages. Indemnity in that case was
took off from Manduriao Airport in Iloilo on its way to Manila with 33 persons on also determined based on the life expectancy of the deceased and not of his beneficiaries.
board.
• The plane did not reach its destination but crashed on Mt. Baco in Mindoro, one Following the procedure used by the SC in the case of Davila vs. PAL, the trial court
hour and fifteen minutes after take-off. determined the victim’s gross annual income to be P23,100 based on the yearly salaries
• The plane was identified as PI-C133, a DC-3 type aircraft manufactured in 1942 and of P18,000 from Padilla Shipping Company and P5,100 from the Allied Overseas
acquired by PAL in 1948.The same has been certifies as airworthy by the Civil Trading Corporation.
Aeronautics Administration.
• Among the fatalities was Nicanor Padilla who was a passenger on the star crossed Considering that he was single, the court deducted P9,200 as yearly living expenses
flight. resulting in a net income of P13,900 and not P15,900 as determined by the trial court.
• His mother, Natividad Vda de Padilla filed a complaint against PAL demanding
payment of P600,000 as actual and compensatory damages plus exemplary damages Since Nicanor was only 29 years old and in good health, the trial court allowed him a life
and P60,000 as attorney’s fees expectancy of 30 years.
• PAL denied that the accident was caused by its negligence or that of any of the
plane’s flight crew. Then multiplying his annual net income by his life expectancy of 30 years, the product is
• It was established that Nicanor Padilla, prior to his death was 29 years old, single, in P417,000 and not P477,000. This is the amount of death indemnity that is due to her
good health, President and General Manager of Padilla Shipping Company at Iloilo Nicanor’s mother.
City, and a legal assistant of the Padilla Law Office.
• Lower court rendered a decision ordering PAL to pay plaintiff Natividad Padilla the Further, although as a general rule, an appellee who has not appealed is not entitled to
sum of P477,000 as award for the expected income of the deceased Nicanor. such affirmative relief other than the ones granted in the decision of the lower court.
P10,000 as moral damages and P10,000 as attorney’s fees. Nevertheless, there is merit in PR’s plea for relief.
• CA affirmed.
Due to the 16-year delay in the disposition of this case, PR herself has joined her son in
ISSUES & ARGUMENTS the Great Beyond without being able to receive the indemnity that she deserves. Thus in
the interest of justice, petitioner should pay legal interest on the indemnity due her. The
W/N respondent court erred in computing the awarded indemnity on the basis of failure of the trial court to award such interest amounts to a PLAIN ERROR which the
the life expectancy of the late Nicanor Padilla rather on the life expectancy of SC may rectify on appeal although it was not specified in the appellees’ brief.
private respondent
No, however there is error as to the computation of the proper indemnity to be

awarded.
Petitioner PAL relied on foreign law which states that the controlling element in
determining loss of earnings arising from death is the life expectancy of the deceased or
of the beneficiary, whichever is shorter.
However resort to foreign law even in the absence of local statute is only persuasive.
TIN DIÑO
Page 457 of 528

411. Better Buildings , Inc. vs. NLRC | Romero, J. regard, private respondent failed to adduce substantial evidence to disprove this
G.R. No. 109714, December 15, 1997 | 283 SCRA 242 allegation.
While we find that private respondent was dismissed for cause, the same was, however,
FACTS effected without the requirements of due process.
• Private respondent Halim Ysmael (Ysmael) was hired as a Sales Manager by • In this jurisdiction, we have consistently ruled that in terminating an employee, it is
petitioner Better Building, Inc. (BBI) on March 16, 1985. In addition to his monthly essential that the twin requirements of notice and hearing must be observed. 12 The
salary, he was given the free use of the company car, free gasoline and commission written notice apprises the employee of the particular acts or omissions for which
from sales. Private respondent Eliseo Feliciano (Feliciano), on the other hand, was his dismissal is sought and at the same informs the employee concerned of the
employed as Chief Supervisor by the petitioner since January 1966. employer's decision to dismiss him.
• On May 3, 1988, petitioner, through its Assistant General Manager, Leda A. • In the case at bar, the record is bereft of any showing that private respondent was
Beverford, showed to private respondents a memorandum regarding their given notice of the charge against him. Nor was he ever given the opportunity under
termination from employment effective the same day the circumstances to answer the charge; his termination was quick, swift and sudden.
• Unable to accept petitioner's drastic action, on May 6, 1988, private respondents • Evidently, the decision to dismiss respondent was merely based on the fact that
filed a complaint against BBI for illegal dismissal. 3 petitioner was already convinced at the time that the private respondents were
• On March 3, 1989, Labor Arbiter Daisy G. Cauton-Barcelona rendered a decision engaged in disloyal acts. As regards the procedural aspect, the failure to observe the
declaring the dismissal illegal. twin requirements of notice and hearing taints the dismissal with illegality.
• Except for the reduction of the damages awarded by the Labor Arbiter, the said • In fine, we find that there was basis for petitioner's loss of trust and confidence in
decision was affirmed by the NLRC, private respondent. For an employer cannot be compelled to retain in his service an
• Petitioner, not satisfied with the decision, has filed the instant petition for certiorari employee who is guilty of acts inimical to its interest. 14 A company has the right to
alleging that the NLRC gravely abused its discretion amounting to lack or excess of dismiss its employees as a measure of protection. 15 Corollarily, proof beyond
jurisdiction when it rendered the decision of March 3, 1989 and the resolution of reasonable doubt of an employee's misconduct is
December 11, 1992. not required in dismissing an employee on the ground of loss of trust and
• On September 4, 1996, this Court resolved to dismiss the case against private confidence. 16 The quantum of proof required, being only substantial evidence, 17 we
respondent Ysmael by virtue of the compromise agreement entered into between are convinced that there was an actual breach of trust committed by private
him and the petitioner. 6 Hence, the resolution of this case will only affect private respondent which was ample basis for petitioner's loss of trust and confidence in
respondent Feliciano. him. We, therefore, hold that private respondent's dismissal was for a just and
ISSUES & ARGUMENTS valid cause. However, the manner of terminating his employment was done
in complete disregard of the necessary procedural safeguards. A man's job
W/N respondent NLRC gravely abused its discretion amounting to lack or being a property right duly protected by our laws, for depriving private
excess of jurisdiction? respondent the right to defend himself, petitioner is liable for damages
consistent with Article 32 of the Civil Code, which provides:
HOLDING & RATIO DECIDENDI o Art. 32. Any public officer or employee, or any private individual,
In termination of employment cases, we have consistently held that two requisites must who directly or indirectly obstructs, defeats, violates or in any
concur to constitute a valid dismissal: (a) the dismissal must be for any of the causes manner impedes or impairs any of the following rights and liberties
expressed in Art. 282 of the Labor Code, and (b) the employee must be accorded due of another person shall be liable to the latter for damages:
process, the elements of which are the opportunity to be heard and defend himself. 7 • xxx xxx xxx
• Deeply entrenched in our jurisprudence is the doctrine that an employer can o (6) The right against deprivation of property without due process of
terminate the services of an employee only for valid and just causes which must be law;
supported by clear and convincing evidence. 10 The employer has the burden of • xxx xxx xxx
proving that the dismissal was indeed for a valid and just cause. 11 • In this regard, the damages shall be in the form of nominal damages 18 for the
• In the case at bar, petitioner has clearly established private respondent's culpability award is not for the purpose of penalizing the petitioner but to vindicate or
by convincing evidence. First, it was never disputed that private respondent recognize private respondent's rights to procedural due process which was
established another corporation, Reachout General Services, engaged in the violated by the petitioner.
maintenance/janitorial service, the same line of business as that of petitioner. In this
JAY DUHAYLONGSOD
Page 458 of 528

412. Japan Airlines vs. Court of Appeals | Romero, J. • Failing in its bid to reconsider the decision, JAL has now filed this instant petition.
G.R. No. 118664, August 7, 1998 | 294 SCRA 19
ISSUES & ARGUMENTS
FACTS
W/N the JAL, as a common carrier has the obligation to shoulder the hotel and
• On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL 001 meal expenses of its stranded passengers until they have reached their final
in San Francisco, California bound for Manila. Likewise, on the same day private destination, even if the delay were caused by "force majeure"?
respondents Enrique Agana, Maria Angela Nina Agana and Adelia Francisco left
Los Angeles, California for Manila via JAL flight No. JL 061. As an incentive for HOLDING & RATIO DECIDENDI
travelling on the said airline, both flights were to make an overnight stopover at We are not unmindful of the fact that in a plethora of cases we have consistently ruled
Narita, Japan, at the airlines' expense, thereafter proceeding to Manila the following that a contract to transport passengers is quite different in kind, and degree from any
day. other contractual relation. It is safe to conclude that it is a relationship imbued with
• Upon arrival at Narita, Japan on June 14, 1991, private respondents were billeted at public interest. Failure on the part of the common carrier to live up to the exacting
Hotel Nikko Narita for the night. The next day, private respondents, on the final leg standards of care and diligence renders it liable for any damages that may be sustained by
of their journey, went to the airport to take their flight to Manila. However, due to its passengers. However, this is not to say that common carriers are absolutely
the Mt. Pinatubo eruption, unrelenting ashfall blanketed Ninoy Aquino responsible for all injuries or damages even if the same were caused by a fortuitous
International Airport (NAIA), rendering it inaccessible to airline traffic. Hence, event. To rule otherwise would render the defense of "force majeure," as an exception
private respondents' trip to Manila was cancelled indefinitely. from any liability, illusory and ineffective.
• To accommodate the needs of its stranded passengers, JAL rebooked all the Manila- • Accordingly, there is no question that when a party is unable to fulfill his obligation
bound passengers on flight No. 741 due to depart on June 16, 1991 and also paid because of "force majeure," the general rule is that he cannot be held liable for
for the hotel expenses for their unexpected overnight stay. On June 16, 1991, much damages for non-performance. 6 Corollarily, when JAL was prevented from
to the dismay of the private respondents, their long anticipated flight to Manila was resuming its flight to Manila due to the effects of Mt. Pinatubo eruption, whatever
again cancelled due to NAIA's indefinite closure. At this point, JAL informed the losses or damages in the form of hotel and meal expenses the stranded passengers
private respondents that it would no longer defray their hotel and accommodation incurred, cannot be charged to JAL. Yet it is undeniable that JAL assumed the hotel
expense during their stay in Narita. expenses of respondents for their unexpected overnight stay on June 15, 1991.
• Since NAIA was only reopened to airline traffic on June 22, 1991, private • Admittedly, to be stranded for almost a week in a foreign land was an exasperating
respondents were forced to pay for their accommodations and meal expenses from experience for the private respondents. To be sure, they underwent distress and
their personal funds from June 16 to June 21, 1991. Their unexpected stay in Narita anxiety during their unanticipated stay in Narita, but their predicament was not due
ended on June 22, 1991 when they arrived in Manila on board JL flight No. 741. to the fault or negligence of JAL but the closure of NAIA to international flights.
• Obviously, still reeling from the experience, private respondents, on July 25, 1991, Indeed, to hold JAL, in the absence of bad faith or negligence, liable for the
commenced an action for damages against JAL before the Regional Trial Court of amenities of its stranded passengers by reason of a fortuitous event is too much of a
Quezon City, Branch 104. 2 To support their claim, private respondents asserted burden to assume.
that JAL failed to live up to its duty to provide care and comfort to its stranded • Furthermore, it has been held that airline passengers must take such risks incident to
passengers when it refused to pay for their hotel and accommodation expenses from the mode of travel. 7 In this regard, adverse weather conditions or extreme climatic
June 16 to 21, 1991 at Narita, Japan. In other words, they insisted that JAL was changes are some of the perils involved in air travel, the consequences of which the
obligated to shoulder their expenses as long as they were still stranded in Narita. On passenger must assume or expect. After all, common carriers are not the insurer of
the other hand, JAL denied this allegation and averred that airline passengers have all risks. 8
no vested right to these amenities in case a flight is cancelled due to "force majeure." • The reliance is misplaced. The factual background of the PAL case is different from
• On June 18, 1992, the trial court rendered its judgment in favor of private the instant petition. In that case there was indeed a fortuitous event resulting in the
respondents holding JAL liable for damages diversion of the PAL flight. However, the unforeseen diversion was worsened when
• Undaunted, JAL appealed the decision before the Court of Appeals, which, "private respondents (passenger) was left at the airport and could not even hitch a
however, with the exception of lowering the damages awarded affirmed the trial ride in a Ford Fiera loaded with PAL personnel," 10 not to mention the apparent
court's finding, 3 thus: apathy of the PAL station manager as to the predicament of the stranded
• JAL filed a motion for reconsideration which proved futile and passengers. 11 In light of these circumstances, we held that if the fortuitous event
unavailing. 4 was accompanied by neglect and malfeasance by the carrier's employees, an action
Page 459 of 528
for damages against the carrier is permissible. Unfortunately, for private
respondents, none of these conditions are present in the instant petition.
We are not prepared, however, to completely absolve petitioner JAL from any liability. It
must be noted that private respondents bought tickets from the United States with
Manila as their final destination. While JAL was no longer required to defray private
respondents' living expenses during their stay in Narita on account of the fortuitous
event, JAL had the duty to make the necessary arrangements to transport private
respondents on the first available connecting flight to Manila. Petitioner JAL reneged on
its obligation to look after the comfort and convenience of its passengers when it
declassified private respondents from "transit passengers" to "new passengers" as a result
of which private respondents were obliged to make the necessary arrangements
themselves for the next flight to Manila. Private respondents were placed on the waiting
list from June 20 to June 24. To assure themselves of a seat on an available flight, they
were compelled to stay in the airport the whole day of June 22, 1991 and it was only at
8:00 p.m. of the aforesaid date that they were advised that they could be accommodated
in said flight which flew at about 9:00 a.m. the next day.
• We are not oblivious to the fact that the cancellation of JAL flights to Manila from
June 15 to June 21, 1991 caused considerable disruption in passenger booking and
reservation. In fact, it would be unreasonable to expect, considering NAIA's closure,
that JAL flight operations would be normal on the days affected. Nevertheless, this
does not excuse JAL from its obligation to make the necessary arrangements to
transport private respondents on its first available flight to Manila. After all, it had a
contract to transport private respondents from the United States to Manila as their
final destination.
• Consequently, the award of nominal damages is in order. Nominal damages are
adjudicated in order that a right of a plaintiff, which has been violated or invaded by
the defendant, may be vindicated or recognized and not for the purpose of
indemnifying any loss suffered by him. 12 The court may award nominal damages in
every obligation arising from any source enumerated in article 1157, or in every case
where any property right has been invaded. 13
JAY DUHAYLONGSOD
Page 460 of 528

413. Cojuangco vs. CA | Panganiban • Art. 2221 of the Civil Code authorizes the award of nominal damages to a plaintiff
G.R. No. 119398, July 2, 1999 | 309 SCRA 602 whose right has been violated or invaded by the defendant, for the purpose of
vindicating or recognizing that right, not for indemnifying the plaintiff for any loss
FACTS suffered.
• The court may also award nominal damages in every case where a property right has
• Petitioner Eduardo Cojuangco is a known businessman-sportsman owning several been invaded.
racehorses which he entered in the sweepstakes races. Several of his horses won.
• Petitioner sent letters of demand to private respondents PCSO and PCSO Chairman
Fernando Carrascoso, Jr. for the collection of the prizes due him.
• However, the respondent said that the demanded prizes are being withheld on
advice of Commissioner Ramon Diaz of the PCGG after private respondent
Carrascoso sought the latter a clarification of the extent and coverage of the
sequestration order issued against the properties of petitioner.
• The sequestration order was in pursuance of EO 2, issued by President Aquino,
freezing all assets and properties in the Philippines of the Marcoses, their friends,
subordinates, and business associates.
• A case was filed before the RTC, which ruled in favor of petitioner. Upon appeal to
the CA, it was reversed.
ISSUES & ARGUMENTS
W/N the award for nominal damages against respondent Carrascoso, Jr. is
warranted by evidence and law?
YES. PETITIONER’S RIGHT TO THE USE OF HIS PROPERTY WAS

UNDULY IMPEDED.
• Private respondent Carrascoso may still e held liable under Art. 32 of the Civil Code,
which provides:
o Art. 32. Any public officer, or any private individual, who directly or
indirectly obstructs, defeats, violates or in any manner impedes or impairs
any of the following rights and liberties of another person shall be liable to
the latter for damages:
 The right against deprivation of property without due process of
law;
• While private respondent Carrascoso may have relied upon the PCGG’s
instructions, he could have further sought the specific legal basis therefor.
• A little exercise of prudence would have disclosed that there was no writ issued
specifically for the sequestration of the racehorse winnings of petitioner.
• The issuance of a sequestration order requires the showing of a prima facie case and
due regard for the requirements of due process.
• The withholding of the prize winnings of petitioner without a properly issued
sequestration order clearly spoke of a violation of his property rights without due
process of law. FRANCIS ESPIRITU
Page 461 of 528

414. BPI Investment Corporation v. Court of Appeals | Quisumbing an award of nominal damages worth P25,000 should be given in recognition of
G.R. No. 133632 February 15, 2002| 377 SCRA 117 respondents’ rights which were violated by petitioner.
• The award of attorney’s fees is sustained because respondents were compelled to
FACTS litigate.
• Frank Roa loaned from petitioner and secured the loan with his house. Later on,
Roa sold the house to private respondents and the latter assumed Roa’s mortgage.
However, since petitioner was not willing to extend the same loan terms to
respondent, and they agreed on a new loan which also covered Roa’s debt.
• On Mar 1981, they executed a mortgage deed containing the new terms with the
provision that payment of the monthly amortization would commence on May
1981. On Aug 1982, respondents updated Roa’s arrearages which reduced Roa’s
balance, which in turn was liquidated when petitioner applied thereto the proceeds
of respondent’s loan of P500,000. On Sep 1982, petitioner then released to
respondents P7,146.87, purporting to be what was left of their loan after full
payment of Roa’s loan.
• In June 1984, petitioner instituted foreclosure proceedings against respondents on
the ground that they failed to pay their indebtedness from May 19981 up to June
1984 which amounted to P475,585.31. A notice of sheriff’s sale was published on
Aug 1984.
• Respondents then filed a civil case against petitioner, alleging that they were not in
arrears but in fact made an overpayment. RTC found for respondents, and ordered
petitioner to pay moral and exemplary damages and attorney’s fees. CA affirmed in
toto.
ISSUES & ARGUMENTS
1. Issue 1: (not important, regarding the loan itself)

2. Issue 2: W/N the award of moral and exemplary damages and attorney’s fees
proper?
o Respondents: Petitioner is guilty of bad faith as evidenced by its insistence
on the payment of amortization on the loan even before it was released.
ISSUE 2: MORAL AND EXEMPLARY DAMAGES DELETED, AWARDED

NOMINAL DAMAGES INSTEAD. ATTORNEY’S FEES PROPER.
• As admitted by private respondents themselves, they were irregular in their payment
of monthly amortization. Conformably with previous SC rulings, petitioner cannot
be properly declared in bad faith. Consequently, the award of moral and exemplary
damages must be ruled out.
• However, in the SC’s view, petitioner was negligent in relying merely on the entries
found in the deed of mortgage, without checking and correspondingly adjusting its
records on the amoun actually released to private respondents and the date when it
was released. Sich negligence resulted in damage to private respondents, for which JOHN FADRIGO
Page 462 of 528

415. Almeda vs. Carino| Mendoza in fact. When granted by the courts, they are not treated as an equivalent of a wrong
G.R. No. 152143. January 13, 2003| inflicted but simply a recognition of the existence of a technical injury. A violation
of the plaintiffs right, even if only technical, is sufficient to support an award of
FACTS nominal damages. Conversely, so long as there is a showing of a violation of the
right of the plaintiff, an award of nominal damages is proper.
• April 30, 1980, Ponciano L. Almeda and Avelino G. Cario, predecessors-in-interest
of petitioners and respondents, entered into 2 agreements to sell, one covering 8
titled properties at P1,743,800.00, 20% upon the signing and execution of the
agreement, balance four equal semi-annual installments, beginning six months from
the signing thereof, with 12% interest per annum.
• Another 3 untitled properties, at P1,208,580.00, 15% upon the signing and
execution of the agreement, and the balance, bearing a 12% annual interest from the
signing thereof, to be paid as follows: 15% of the purchase price plus interest to be
paid upon the issuance of titles to the lots, and the balance plus interests to be paid
in semi-annual installments starting from the date of issuance of the respective
certificates of title to the lots involved, which must be not later than March 30,
1982.
• The parties amended their agreement by extending the deadline of producing the
titles to the lands, P300K payment for the titled lands, Carino tor ender acctg of the
sugar cane crops and Carino to pay 10K a month in case of failure to produce the
title of the documents.
• Almeda asked Carino for the Deed of Absolute Sale over the 8 titled properties
despite non-payment of the full price.
• Carino granted the request and Almeda executed an undertaking to pay the balance
but failed despite repeated demands of Carino.
• .Carino filed a case against Almeda. RTC ruled in favor of Carino.
• Almeda appealed, questioning the award of nominal damages of the trial court.
• Court of Appeals affirmed the decision of the lower court. It held that the award of
nominal damages was justified by the unjust refusal of Almeda and Almeda, Inc. to
settle and pay the balance of the purchase price in violation of the rights of Cario
ISSUES & ARGUMENTS
W/N the award of NOMINAL damages was proper?
YES. Almeda’s refusal to pay the purchase price despite repeated demands and
after they sold the properties to third parties constitutes a violation of Carino’s
right to the amount in their agreement.
and not for indemnifying the plaintiff for any loss suffered by him. Its award is thus
not for the purpose of indemnification for a loss but for the recognition and
vindication of a right. Indeed, nominal damages are damages in name only and not PAT PERNANDEZ
Page 463 of 528

416. Northwest Airlines V. Cuenca that the person to whom respondent's first class seat was given had a better right thereto.
G.R. L-22425 August 31, 1965 In other words, since the offense had been committed with full knowledge of the fact
that respondent was an official representative of the Republic of the Philippines, the sum
FACTS of P20,000 awarded as damages may well be considered as merely nominal. At any rate,
considering that petitioner's agent had acted in a wanton, reckless and oppressive
• When his contract of carriage was violated by the petitioner, respondent held the manner, said award may also be considered as one for exemplary damages.
office of Commissioner of Public Highways of the Republic of the Philippines.
Having boarded petitioner's plane in Manila with a first class ticket to Tokyo, he WHEREFORE, the decision appealed from is hereby affirmed, with costs against the
was, upon arrival at Okinawa, transferred to the tourist class compartment. petitioner. It is so ordered.
Although he revealed that he was traveling in his official capacity as official delegate
of the Republic to a conference in Tokyo, an agent of petitioner rudely compelled
him in the presence of other passengers to move, over his objection, to the tourist
class, under threat of otherwise leaving him in Okinawa. In order to reach the
conference on time, respondent had no choice but to obey.
• This is an action for damages for alleged breach of contract. After appropriate
proceedings the Court of First Instance of Manila, in which the case was originally
filed, rendered judgment sentencing defendant Northwest Airlines, Inc. —
hereinafter referred to as petitioner — to pay to plaintiff Cuenca — hereinafter
referred to as respondent — the sum of P20,000 as moral damages, together with
the sum of P5,000 as exemplary damages, with legal interest thereon from the date
of the filing of complaint," December 12, 1959, "until fully paid, plus the further
sum of P2,000 as attorney's fees and expenses of litigation." On appeal taken by
petitioner, said decision was affirmed by the Court of Appeals, except as to the
P5,000.00 exemplary damages, which was eliminated, and the P20,000.00 award for
moral damages, which was converted into nominal damages.
ISSUES & ARGUMENTS
Whether or not the court erred in awarding nominal damage?
No.
Nominal damages cannot co-exist with compensatory damages." In the case at bar, the
Court of Appeals has adjudicated no such compensatory, moral and exemplary damages
to respondent herein. There are special reasons why the P20,000.00 award in favor of
respondent herein is justified, even if said award were characterized as nominal damages.
It is true that said ticket was marked "W/L," but respondent's attention was not called
thereto. Much less was he advised that "W/L" meant "wait listed." Upon the other hand,
having paid the first class fare in full and having been given first class accommodation as
he took petitioner's plane in Manila, respondent was entitled to believe that this was a
confirmation of his first class reservation and that he would keep the same until his
ultimate destination, Tokyo. Then, too, petitioner has not tried to explain or even alleged J.C. LERIT
Page 464 of 528

417. Armovit v Court of Appeals
G.R. No. 88561 April 20, 1990 ISSUES & ARGUMENTS
FACTS W/N the Armovits are entitled to Nominal Damages
• Dr. Armovit, a Filipino physician and his family residing in the United States came HOLDING & RATIO DECIDENDI
to the Philippines on a Christmas visit. They were bumped off at the Manila
International Airport on their return flight to the United States because of an NO. NOMINAL DAMAGES CANNOT CO-EXIST WITH ACTUAL OR
erroneous entry in their plane ticket relating to their time of departure. COMPENSATORY DAMAGES.
• In October 1981, they decided to spend their Christmas holidays with relatives and • The Supreme Court further modified the Court of Appeals judgment as follows:
friends in the Philippines so they purchased from Northwest three roundtrip Airline Actual damages in favor of Dr. Armovit, P1,300.00 with legal interest from January
tickets from the United States to Manila and back, plus three tickets for the rest of 17, 1982; moral damages at P100,000.00, and exemplary damages at P100,000.00 in
the children, though not involved in the suit. favor of Dr. Armovit; Moral damages at P100,000.00 and exemplary damages at
• Each ticket of the petitioners which was in the handwriting of Northwest’s tickets P50,000.00 in favor of Mrs. Armovit; Moral damages at P100,000.00 and exemplary
sales agent contains the following entry on the Manila to Tokyo portion of the damages of P20,000.00 in favor of Mrs. Jacqueline Armovit; and attorneys fees at
return flight 'Manila to Tokyo, NW flight 002 dated 17 January, time 10:30 a.m. 5% of the total awards under above paragraphs, plus costs of suit, and
Status OK." o 1. The gross negligence committed by Northwest in the issuance of the tickets
• On their return trip from Manila to the U.S. scheduled on January 17,1982, Armovit with entries as to the time of the flight; the failure to correct such erroneous
arrived at the check in counter of Northwest at the Manila International Airport at entries and the manner by which petitioners were rudely informed that they
9:15 in the morning, a good one (1) hour and Fifteen (15) minutes ahead of the were bumped off` are clear indicia of such malice and bad faith and establish
10:30 a.m. scheduled flight time recited in their ticket. They were rudely informed that respondent has committed a breach of contract which entitle petitioners to
that they cannot be accommodated inasmuch as flight 002 scheduled at 9:15 a.m. moral damages.
was already taking off and the 10:30 a.m. flight entered in their plane ticket was o 2. Considering the circumstances of this case whereby Northwest attended to
erroneous. the flight of the petitioners, taking care of their accommodation while waiting
• Previous to the said date of departure the petitioners re-confirmed their reservations and boarding them in the flight back to the United States the following dag;. the
through their representatives who personally presented the three (3) tickets at the Court finds that petitioners are entitled to moral damages in the amount of
Northwest office. The departure time in the three (3) tickets of the petitioners was P100,000.00 each.
not changed when re-confirmed. The names of petitioners appeared in the o 3. By the same token to provide an example for the public good, an award of
passenger manifest and confirmed. exemplary damages is also proper, the award of the appellate court is adequate.
• Petitioner Dr. Armovit protested that because of the bumped-off he will not be able o 4. The deletion of nominal damages by the appellate court is well-taken
to keep his appointment with his patients in the United States. Petitioners suffered since there is an award of actual damages. Nominal damages cannot co-
anguish, wounded feelings, and serious anxiety day and night of January 17th until exist with actual and compensatory damages.
the morning of January 18th when they were finally informed that seats will be
available for them on the flight of that day. The trial court rendered judgment
against the airline as follows: P1,300.00 actual damages; P500,000.00 moral damages;
P500,000.00 exemplary damages; and P100,000.00 nominal damages in favor of
Dr. Armovit; also moral damages of P300,000.00; exemplary damages of
P300,000.00; nominal damages of P50,000.00 each in favor of Mrs. Armovit and
Miss Jacqueline Arrnovit.
• The Court of Appeals modified the trial court’s judgment as follows: The
P900,000.00 moral damages and P100,000.00 nominal damages awarded to
petitioners were eliminated; exemplary damages were reduced from P500,000.00
to P50,000.00 in favor of Mrs. Armovit and from P300,000.00 to P20,000.00 in
favor of Miss Jacqueline Armovit.
JON LINA
Page 465 of 528
418 Cathay Pacific Airways v. Spouses Vasquez| Davide
G.R. No. 150843 March 14, 2003 SPOUSES MAY ENTITLED ONLY TO NOMINAL DAMAGES
• The court did not award them even nominal damages, they just made
FACTS mention that Nominal Damages is the most the spouses may claim:
• The Spouses Vasquez went to HongKong via Cathay Pacific Airlines. Included in According to article 2221:
the trip was their maid who rode in the tourist class, and 2 friends who rode with o Article 2221. Nominal damages are adjudicated in order that a right
them in the business class cabin. of the plaintiff, which has been violated or invaded by the defendant,
• On the way back to Manila, the spouses presented their boarding passes to the may be vindicated or recognized, and not for the purpose of
attendant. The attendant informed them that their seats have been upgraded to first indemnifying the plaintiff for any loss suffered by him.
class because they were Marco Polo Club Members (frequent flyer club) and they
had such the privilege of a free upgrade in seating accommodations when such is
available.
• The spouses did not want to change their seats because they felt that they should be
seated with their friends with whom they had traveled and Dr. Vasquez had business
matters he wanted to discuss with them.
• The attendant, however, insisted that they take the seats because the flight has been
overbooked and the only way for them to get in this flight was to take the first class
upgrade. They took in reluctantly for want to be with their friends.
• When they returned back to Manila, they demanded from Cathay Pacific damages of
up to P1M, including Moral Damages.
ISSUES & ARGUMENTS
W/N Spouses Vasquez are entitled to MORAL DAMAGES, if not should they be
indemnified in another manner.
NO. SPOUSES ARE NOT ENTITLED TO MORAL DAMAGES AS THERE

WAS NO BAD FAITH ON THE PART OF CATHAY PACIFIC OR ITS
ATTENDANTS.
• The spouses knew that they were members of the Marco Polo Club and that they
had such privileged. But privileges, as known to us, can be waived. The flight
attendant whould have consulted the spouses if they wanted to avail of that privilege
before their business class seats were given to someone else and not surprise them,
as like what happened in this case.
• The spouses clearly waived such privilege, therefore Cathay Pacific breached the
• It is essential, however, that there exists bad faith or malice when in breach of the
contract of carriage. The attendants changed the seat accommodations without such
malice. Bad faith imports a dishonest purpose or some moral obliquity which was
not present in this case.
CHESKA RESPICIO
Page 466 of 528

419. Precillano Necesito, Etc. Vs. Natividad Paras, Et Al.|JBL Reyes NOT LIABLE FOR MORAL DAMAGES but LIABLE FOR MODERATE
G.R. No. L-10605 June 30, 1958| 104 SCRA 75 (TEMPERATE) DAMAGES
FACTS • No allowance may be made for moral damages, since under Article 2220 of the
new Civil Code, in case of suits for breach of contract, moral damages are
• Severina Garces, with her 1y.o. son, Precillano Necesito, rode a Phil Rabbit Bus recoverable only where the defendant acted fraudulently or in bad faith,
from Agno to Manila, driven by Franciso Bandonell. and there is none in this case. As to exemplary damages, the carrier has not
• Due to fracture of the right steering knuckle, which had a defective core at it was acted in a "wanton, fraudulent, reckless, oppressive or malevolent manner" to
not compact but "bubbled and cellulous" (a condition that could not be known or warrant their award.
ascertained by the carrier despite the fact that regular thirty-day inspections were • For the minor Precillano, an indemnity of P5,000 would be adequate for the
made of the steering knuckle), the front wheel swerved to the right; then, the driver abrasions and fracture of the femur, including medical and hospitalization
lost control and the bus fell into a creek. As a result, Severina died and the expenses, there being no evidence that there would be any permanent
Precillano had a broken femur and abrasions; they also lost cargo of vegetables, a impairment of his faculties or bodily functions, beyond the lack of anatomical
wristwatch and money. symmetry.
• They filed 2 suits for damages against Phil. Rabbit. • As for the death of Severina, who was 33 years old, with 7 minor children when
• CFI: dismissed on the grounds that injury occurred due to a fortuitous events since she died, her heirs are obviously entitled to indemnity not only for the
the bus was traveling slow due to a bad road condition and that the proximate cause incidental loses of property (cash, wrist watch and merchandise) worth P394
was the reduced strength of the steering knuckle. that she carried at the time of the accident and for the burial expenses of P490,
but also for the loss of her earnings (shown to average P120 a month) and for
(NB: this case both had the original SC decision and the MR. MR slightly diverted by saying that the deprivation of her protection, guidance and company. In our judgment, an
moral damages are due to the heirs of Severina due to the fact of her death, but JBL Reyes award of P15,000 would be adequate
concluded that the MR was denied and affirmed what was held in the original decision.)
LIABLE FOR ATTORNEY’S FEES:
ISSUES & ARGUMENTS • Low income of the plaintiffs-appellants makes an award for attorney's fees
just and equitable (Civil Code, Art. 2208, par. 11). Considering that the two
1. W/N the carrier is liable for the manufacturing defect of the steering cases filed were tried jointly, a fee of P3,500 would be reasonable.
knuckle, and whether the evidence discloses that in regard thereto the carrier
exercised the diligence required by law (under Art. 1755) CFI decision reversed.
2. On DAMAGES: W/N the carrier is liable for MODERATE DAMAGES?
(Temperate damages rin yun; note that JBL Reyes didn’t brand it as temperate MR DECISION: Award of moral damages was granted under Art 176426. Under the
damages.) MORAL DAMAGES? ATTY’s FEES? new Civil Code, in case of accident due to a carrier's negligence, the heirs of a deceased
passenger may recover moral damages, while, a passenger who is injured, but manages to
HOLDING & RATIO DECIDENDI survive, is not entitled to them.
UNDER THE ORGINAL DECISION: Art 1764, being a special rule limited to cases of fatal injuries, this article prevails over the
YES, the carrier is liable general rule of Art. 2220.
• While the carrier is not insurer of the safety of the passenger, it should
nevertheless be held to answer for the flaws in its equipment if the flaws were
at all discoverable. In this connection, the manufacturer of the defective
appliance is considered in law as the agent of the carrier and the good repute of DIANE LIPANA
the manufacturer will not relieve the carrier from liability.
26 ART. 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book,
• The rationale of the carrier’s liability is the fact that the passenger has no privity
concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common
with the manufacturer if the defective equipment; hence, he has no remedy carrier. ART. 2206. . . .
against him while the carrier usually has.
(3) The spouse, legitimate and eligimate descendants and ascendants of the deceased may demand moral damages for
mental anguish by reason of the death of the deceased.
Page 467 of 528
420. Pleno vs. Court of Appeals| Gutierrez, Jr.
G.R. No. L-56505, June 16, 1992 | 161 SCRA 208
FACTS
• Florante de Luna was driving a delivery truck owned by Philippine Paper Products
Inc. at great speed along South Super Highway in Taguig when he bumped the van
which was being driven by Maximo Pleno.
• The bump caused Pleno’s van to swerve to the right and crash into a parked truck.
• As a result, Pleno was hospitalized and his van was wrecked.
• Pleno sued and was awarded actual, temperate, moral, exemplary damages and
attorney’s fees by the trial court.
• However, the CA reduced the amount of temperate and moral damages given
because they were ‘too high’.
ISSUES & ARGUMENTS
W/N the CA erred in reducing the amount of temperate damages awarded?
The CA erred in reducing the award of temperate damages.

Temperate damages are included within the context of compensatory damages. In
arriving at a reasonable level of temperate damages to be awarded, trial courts are guided
by our ruling that there are cases where from the nature of the case, definite proof of
pecuniary loss cannot be offered, although the court is convinced that there has been
such loss.
For instance, injury to one's commercial credit or to the goodwill of a business firm is
often hard to show certainty in terms of money. Should damages be denied for that
reason? The judge should be empowered to calculate moderate damages in such cases,
rather than that the plaintiff should suffer, without redress from the defendant's
wrongful act.
As to the loss or impairment of earning capacity, there is no doubt that Pleno is an
entrepreneur and the founder of his own corporation, the Mayon Ceramics Corporation.
It appears also that he is an industrious and resourceful person with several projects in
line and were it not for the incident, might have pushed them through. His actual income
however has not been sufficiently established so that this Court cannot award actual
damages, but, an award of temperate or moderate damages may still be made on loss or
impairment of earning capacity. That Pleno sustained a permanent deformity due to a
shortened left leg and that he also suffers from double vision in his left eye is also
established. Because of this, he suffers from some inferiority complex and is no longer
active in business as well as in social life.
MIKHAIL MALANG
Page 468 of 528

421. Consolidated Plywood Industried and Henry Wee vs. CA, Willie and Alfred • The trial court correctly held that there was no evidence to support such claim of
Kho |Medialdea actual damages. This claim apparently refers to an alleged commitment to a certain
G.R. No. 101706, September 23, 1992 | 214 SCRA 209 Ching Kee Trading of Taiwan scheduled in June 1979 as distinguished from the
claim for actual damages incurred in connection with its Aquarius Trading
FACTS transaction, which was sufficiently substantiated
• Consolidated’s contention that the damages for the unfulfilled shipments should
• Sometime in February 1978, Consolidated Plywood, through its president Wee, have been awarded as a form of temperate or moderate damages, as provided under
entered into a verbal hauling agreement with the father and son, Willie and Alfred Art. 2224, is not well taken
Kho (the Khos), for its logging and manufacturing timber products at its logging • The grant thereof is proper under the provision of Art. 2205, which provides that
concession damages may be recovered. In this case, there was no showing nor proof that
• As a pre-condition, the Khos will be provided a financial assistance to defray the Consolidated was entitled to an award of this kind of damages in addition to the
cost of needed repairs and re-conditioning of the trucks and other expenses actual damages it suffered as a direct consequence of the Khos’ act. The nature of
necessary for the hauling operations the contract between the parties is such that damages which the innocent party may
• It was understood that the financial assistance was in the nature of cash advance to have incurred can be substantiated by evidence
be obtained by the Khos from Equitable Bank on the guaranty of Wee, and that the
hauling services shall continue unless and until this loan remain unpaid Decision MODIFIED.
• After hauling logs for a year, the Khos without giving notice to Consolidated and
Wee, suddenly and surreptitiously at nighttime, withdrew all its truck haulers from
the jobsite and returned it to its base in violation of the agreement
• Because of this, several logs have been left unhauled from the area which spawned
serious and varied consequences to the great damage and prejudice to Consolidated
o The Aquarius Trading charged it with a reimbursement representing the
cancellation fee of a chartered vessel and other charges due to its unfulfilled
commitment
o During the interim period, it could have produced 5,000 cu. m. of logs, to fill
other commitments
• After 2 demand letters from Consolidated that remained unheeded, it then filed an
action for damages against the Khos for breach of their agreement
• The CFI (now the RTC) rendered judgment in favor of Consolidated ordering the
Khos to pay damages
• On appeal, the CA modified the award by deleting all other damages awarded except
that of unpaid overdraft cash vales, reimbursement, and the unrealized profit in the
Aquarius transaction
ISSUES & ARGUMENTS
W/N the deletion of the damages for unfulfilled import of logs, moral damages
and attorney’s fees were proper
THE DELETION OF ACTUAL DAMAGES IS PROPER BUT THE MORAL

DAMAGES AND ATTORNEY’S FEES ARE NOT JUSTIFIED
KATH MATIBAG
Page 469 of 528

422. Metrobank vs. CA | Romero • While the bank's negligence may not have been attended with malice and bad faith,
G.R. No. 112756 October 26, 1994 | 237 SCRA 761 nevertheless, it caused serious anxiety, embarrassment and humiliation to private
respondents for which they are entitled to recover reasonable moral damages.
FACTS • The damage to private respondents' reputation and social standing entitles them to
moral damages. Moral damages include physical suffering, mental anguish, fright,
• Katigbak is the president and director of RBPG, which maintain an account in serious anxiety, besmirched reputation, wounded feelings, moral shock, social
Metrobank (MBTC) humiliation and similar injury.
• MBTC received from the Central Bank a credit memo for 304k, to be credited to • Temperate or moderate damages which are more than nominal but less than
RBPG’s account compensatory damages may be recovered when the court finds that some pecuniary
• Due to the negligence of the bank’s messenger, such was not credited promptly loss has been suffered but its amount cannot, from the nature of the case, be proved
• Katigbak issued checks in the amount of 300k payable to Dr. Felipe Roque and Mrs. with certainty.
Eliza Roque for 25k • The carelessness of petitioner bank, aggravated by the lack of promptness in
• Checks bounced as funds were insufficient to cover checks repairing the error and the arrogant attitude of the bank officer handling the matter,
• Was berated by Roque’s for issuing bum checks so Katigbak had to cut short her justifies the grant of moral damages, which are clearly not excessive and
HK vacation to settle matters with MBTC unconscionable
• RBPG and Isabel Katigbak filed a civil case against the MBTC for damages
ISSUES & ARGUMENTS
Whether or not private respondents RBPG and Isabel Rodriguez are legally
entitled to moral damages and attorney's fees
Assuming that they are so entitled, whether or not the amounts awarded are
excessive and unconscionable
THERE IS NO MERIT IN MBTC’S ARGUMENT THAT IT SHOULD NOT

BE CONSIDERED NEGLIGENT, MUCH LESS BE HELD LIABLE FOR
DAMAGES ON ACCOUNT OF THE INADVERTENCE OF ITS BANK
EMPLOYEE AS ARTICLE 1173 OF THE CIVIL CODE ONLY REQUIRES IT
TO EXERCISE THE DILIGENCE OF A GOOD PATER FAMILIAS
• The dishonoring of the RBPG checks committed through negligence by the

petitioner bank and was rectified only nine days after receipt of the credit memo.
• Clearly, petitioner bank was remiss in its duty and obligation to treat private
respondent's account with the highest degree of care, considering the fiduciary
nature of their relationship. The bank is under obligation to treat the accounts of its
depositors with meticulous care, whether such account consists only of a few
hundred pesos or of millions.
• Responsibility arising from negligence in the performance of every kind of
obligation is demandable
GINO CAPATI
Page 470 of 528

423. People v. Lopez| Mendoza, J.
G.R. No. 119380 August 19, 1999
FACTS
• Mario Seldera, 11, his father Rogelio Seldera, and his cousin Rodolfo Padapat
worked in the riceland of a certain Lagula in Umingan, Pangasinan. It was harvest
time and the three were hired to bundle the palays stalks which had been cut. As it
was a moonlit night, the three worked in the field until around 9:00 pm, and then
walked for home taking a trail alongside the Banila river. The trail is about two feet
wide only, and so the three walked along the trail single file with Rogelio, being the
oldest, leading the way, followed by his son Mario and by Rodolfo who was last. As
they reached a sloping portion in the trail, accused-appellant Federico Lopez
appeared armed with a shotgun. Accused-appellant had a companion, a dark man.
He was unarmed. Without uttering a word, accused-appellant fired at the three, who
slumped forward, face down. Accused-appellant's companion went near the bodies
of the victims and rolled them over with his foot. Satisfied that the victims were
dead, accused-appellant and his companion left.
• However, Mario, the youngest in the group, was not killed, although he had been
wounded in the back. The latter testified during trial,and after the accused appellant
was convicted of Double Murder and Frustrated Murder. The accused-appellant
was ordered to pay compensatory, actual and moral.
• For the injuries sustained by Mario Seldera, the court a quo awarded P10,000.00
moral damages, P20,000.00 exemplary damages and P300.00 actual damages for
medical expenses.
ISSUES & ARGUMENTS
W/N the amount of actual damages awarded is proper
IT IS IMPROPER BECAUSE THE PROSECUTION FAILED TO PRESENT

ANY DOCUMENTARY PROOF.
However, Article 2224 of the New Civil Code provides that temperate or moderate
damages, which are more than nominal but less than compensatory damages, may be
recovered when the court finds that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be proved with certainty. In lieu of Actual
Damages, absent proof, the amount of P200.00 as temperate damages may be made in its
place.
NINA MEIJA
Page 471 of 528

424. BPI vs ALS Management | Panganiban • Despite the defects of the condominium unit, a lessee stayed there for almost three
G.R. No. 151821, April 14, 2004 | years. The damages claimed by respondent is based on the rent that it might have
earned, had Advanced Micro Device chosen to stay and renew the lease. Such claim
FACTS is highly speculative, considering that respondent failed to adduce evidence that the
unit had been offered for lease to others, but that there were no takers because of
• Petitioner BPI and Respondent ALS Management executed a Deed of Sale for 1 the defects therein
unfurnished unit of the Twin Towers Condominium. The Condominium Certificate • We recognize, however, that respondent suffered damages when its lessee vacated
was issued after BPI advanced the expenses in causing issuance and registration. The the condominium unit on May 1, 1985, because of the defects therein. Respondents
Deed of Sale stated that ALS, as vendee, should pay the expenses for the are thus entitled to temperate damages. Under the circumstances, the amount
preparation and registration of the CCT. However, despite repeated demands, ALS equivalent to three monthly rentals of P17,000 -- or a total of P51,000 -- would be
refused to pay BPI the advances it had made. reasonable.
• In its Answer, ALS alleged that it has just and valid reasons for refusing to pay, i.e.
that BPI had jacked up/increased the amount of its alleged advances by including Petition PARTLY GRANTED. Decision MODIFIED.
charges which should not be collected from buyers of the condominium units.
Moreover, contrary to representations made by BPI, the condominium had a lot of
defects and deficiencies.
• The trial court ordered ALS to pay BPI, and ordered BPI to deliver, replace or
correct the deficiencies/defects in the condominium unit. The CA affirmed.
ISSUES & ARGUMENTS
W/N the award of damages by the CA is proper.
BPI ORDERED TO PAY P51,000 AS TEMPERATE DAMAGES FOR THE

TERMINATION OF THE LEASE CONTRACT DUE TO DEFECTS IN THE
CONDOMINIUM UNIT.
• The trial court ordered petitioner to pay damages of P136,608.75 representing

unearned income for the period that respondent had to suspend a lease contract.
We find a dearth of evidence to support such award. Respondent was able to
establish through its witness’ testimony that the condominium unit suffered from
defects. This testimony was confirmed by an inspection report.
• To recover actual damages, the amount of loss must not only be capable of proof,
but also be proven with a reasonable degree of certainty.
• We agree with petitioner. While respondent may have suffered pecuniary losses for
completion work done, it failed to establish with reasonable certainty the actual
amount spent. The award of actual damages cannot be based on the allegation of a
witness without any tangible document, such as receipts or other documentary
proofs to support such claim. In determining actual damages, courts cannot rely on
mere assertions, speculations, conjectures or guesswork, but must depend on
competent proof and on the best obtainable evidence of the actual amount of loss.
CHRISSIE MORAL
Page 472 of 528

425. NPC vs Court of Appeals | Carpio • Nonetheless, we find it proper to award P50,000 in temperate damages to Pobre.
G.R. No. 106804, August 12, 2004| The court may award temperate or moderate damages, which are more than
nominal but less than compensatory damages, if the court finds that a party has
FACTS suffered some pecuniary loss but its amount cannot be proved with certainty from
the nature of the case. As the trial and appellate courts noted, Pobre's resort-
• Private respondent Pobre is the owner of a 68,969 square-meter land ("Property") subdivision was no longer just a dream because Pobre had already established the
located in Albay. Pobre began developing the Property as a resort-subdivision, resort-subdivision and the prospect for it was initially encouraging. That is, until
which he named as "Tiwi Hot Springs Resort Subdivision." The Commission on NPC permanently damaged Pobre's Property. NPC did not just destroy the
Volcanology certified that thermal mineral water and steam were present beneath property. NPC dashed Pobre's hope of seeing his Property achieve its full potential
the Property and found the thermal mineral water and steam suitable for domestic as a resort-subdivision.
use and potentially for commercial or industrial use. • The lesson in this case must not be lost on entities with eminent domain authority.
• NPC then became involved with Pobre's Property in three instances. First was Such entities cannot trifle with a citizen's property rights. The power of eminent
when Pobre leased to NPC for one year eleven lots from the approved subdivision domain is an extraordinary power they must wield with circumspection and utmost
plan. Second was sometime in 1977, the first time that NPC filed its expropriation regard for procedural requirements. Thus, we hold NPC liable for exemplary
case against Pobre to acquire an 8,311.60 square-meter portion of the Property. The damages of P100,000. Exemplary damages or corrective damages are imposed, by
trial court ordered the expropriation of the lots upon NPC's payment of P25 per way of example or correction for the public good, in addition to the moral,
square meter or a total amount of P207,790. NPC began drilling operations and temperate, liquidated or compensatory damages.
construction of steam wells. While this first expropriation case was pending, NPC Petition denied for lack of Merit. Decision of the Court of Appeals Affirmed.
dumped waste materials beyond the site agreed upon by NPC with Pobre. The
dumping of waste materials altered the topography of some portions of the
Property. NPC did not act on Pobre's complaints and NPC continued with its
dumping. Third was in 1979 when NPC filed its second expropriation case against
Pobre to acquire an additional 5,554 square meters of the Property. NPC needed the
lot for the construction and maintenance of Naglagbong Well Site.
• Pobre filed a motion to dismiss the second complaint for expropriation. Pobre
claimed that NPC damaged his Property. Pobre prayed for just compensation of all
the lots affected by NPC's actions and for the payment of damages.
• NPC filed a motion to dismiss the second expropriation case on the ground that
NPC had found an alternative site and that NPC had already abandoned in 1981 the
project within the Property due to Pobre's opposition. The trial court granted NPC's
motion to dismiss but the trial court allowed Pobre to adduce evidence on his claim
for damages. The trial court admitted Pobre's exhibits on the damages because NPC
failed to object
ISSUES & ARGUMENTS

W/N NPC is liable to respondent to pay damages?
NPC liable to pay temperate and exemplary damages.

• NPC's abuse of its eminent domain authority is appalling. However, we cannot
award moral damages because Pobre did not assert his right to it. We also cannot
award attorney's fees in Pobre's favor since he did not appeal from the decision of
the Court of Appeals denying recovery of attorney's fees.
MAUI MORALES
Page 473 of 528

426 Jison v CA | CORTES, J.:
G.R. No. L-45349 August 15, 1988
FACTS
Spouses Newton and Salvacion Jison, entered into a Contract to Sell with private
respondent, Robert O. Phillips & Sons, Inc., whereby the latter agreed to sell to the
former a lot in Rizal. Petitioners failed to pay several installments thus respondent
informed petitioners that the contract was canceled. This was affirmed by both RTC and
CA
ISSUES & ARGUMENTS
W/N the CA erred in not holding that the private respondent's act of forfeiting all
previous payments made by petitioners is contrary to law, highly iniquitous and
unconscionable
Yes.
• While the resolution of the contract and the forfeiture of the amounts already paid
are valid and binding upon petitioners, the Court is convinced that the forfeiture of
the amount of P5.00 although it includes the accumulated fines for petitioners'
failure to construct a house as required by the contract, is clearly iniquitous
considering that the contract price is only P6,173.15 The forfeiture of fifty percent
(50%) of the amount already paid, or P3,283.75 appears to be a fair settlement. In
arriving at this amount the Court gives weight to the fact that although petitioners
have been delinquent in paying their amortizations several times to the prejudice of
private respondent, with the cancellation of the contract the possession of the lot
review.... to private respondent who is free to resell it to another party.
• The Court's decision to reduce the amount forfeited finds support in the Civil Code.
As stated in paragraph 3 of the contract, in case the contract is cancelled, the
amounts already paid shall be forfeited in favor of the vendor as liquidated damages.
The Code provides that liquidated damages, whether intended as an indemnity or a
penalty, shall be equitably reduced if they are iniquitous or unconscionable [Art.
2227.]
• Further, in obligations with a penal clause, the judge shall equitably reduce the
penalty when the principal obligation has been partly or irregularly complied with by
the debtor [Art. 1229]
MAGIC MOVIDO
Page 474 of 528

427. Country Bankers Insurance Association vs. CA | Medialdea, J.: commencement of the action and that the injunction bond filed by Sy is liable for
G.R. No. 85161, September 9, 1991 | 201 SCRA 458 whatever damages OVEC may have suffered by reason of the injunction.
• From this decision of the trial court, Sy and (CBISCO) appealed the decision in toto
FACTS while OVEC appealed insofar as the decision failed to hold the injunction bond
liable for an damages awarded by the trial court.
• Oscar Ventanilla Enterprises Corporation (OVEC), as lessor, and the petitioner • The respondent Court of Appeals found no ambiguity in the provisions of the lease
Enrique F. Sy, as lessee, entered into a (6 years) lease agreement over the Avenue, agreement. It held that the provisions are fair and reasonable and therefore, should
Broadway and Capitol Theaters and the land on which they are situated in be respected and enforced as the law between the parties. It held that the
Cabanatuan City, including their air-conditioning systems, projectors and accessories cancellation or termination of the agreement prior to its expiration period is justified
needed for showing the films or motion pictures. as it was brought about by Sy's own default in his compliance with the terms of the
• After more than two (2) years of operation of the Avenue, Broadway and Capitol agreement and not "motivated by fraud or greed." It also affirmed the award to
Theaters, the lessor OVEC made demands for the repossession of the said leased OVEC of the amount of P100,000.00 chargeable against the injunction bond posted
properties in view of the Sy's arrears in monthly rentals and non-payment of by CBISCO which was soundly and amply justified by the trial court.
amusement taxes. • The respondent Court likewise found no merit in OVECS appeal and held that the
• By reason of Sy's request for reconsideration of OVECs demand for repossession of trial court did not err in not charging and holding the injunction bond posted by Sy
the three (3) theaters, the former was allowed to continue operating the leased liable for all the awards as the undertaking of CBISCO under the bond referred only
premises upon his conformity to certain conditions imposed by the latter in a to damages, which OVEC may suffer as a result of the injunction.
supplemental agreement dated August 13, 1979. • Hence, the present petition
• In pursuance of their latter agreement, Sy's arrears in rental in the amount of
P125,455.76 (as of July 31, 1979) was reduced to P71,028.91 as of December 31, ISSUES & ARGUMENTS
1979.
o However, the accrued amusement tax liability of the three (3) theaters to the W/N the Court of Appeals erred in holding CBISCO’s bond liable
City Government of Cabanatuan City had accumulated to P84,000.00 despite
the fact that Sy had been deducting the amount of P4,000.00 from his monthly HOLDING & RATIO DECIDENDI
rental with the obligation to remit the said deductions to the city government.
o Hence, letters of demand dated January 7, 1980 and February 3, 1980 were sent NO.
to Sy demanding payment of the arrears in rentals and amusement tax • A provision which calls for the forfeiture of the remaining deposit still in the
delinquency. possession of the lessor, without prejudice to any other obligation still owing, in the
o But notwithstanding the said demands and warnings SY failed to pay the above- event of the termination or cancellation of the agreement by reason of the lessee's
mentioned amounts in full Consequently, OVEC padlocked the gates of the violation of any of the terms and conditions of the agreement is a penal clause that
three theaters under lease and took possession thereof in the morning of may be validly entered into.
February 11, 1980 by posting its men around the premises of the oId movie • A penal clause is an accessory obligation, which the parties attach to a principal
houses and preventing the lessee's employees from entering the same. obligation for the purpose of insuring the performance thereof by imposing on the
• Sy, through his counsel, filed the present action for reformation of the lease debtor a special presentation (generally consisting in the payment of a sum of
agreement, damages and injunction and by virtue of a restraining order dated money) in case the obligation is not fulfilled or is irregularly or inadequately fulfilled
February 12, 1980 followed by an order directing the issuance of a writ of • As a general rule, in obligations with a penal clause, the penalty shall substitute the
preliminary injunction issued in said case, Sy regained possession and operation of indemnity for damages and the payment of interests in case of non-compliance.
the Avenue, Broadway and Capital theaters. • In such case, proof of actual damages suffered by the creditor is not necessary in
• The trial court arrived at the conclusions that Sy is not entitled to the reformation of order that the penalty may be demanded (Article 1228, New Civil Code).
the lease agreement; that the repossession of the leased premises by OVEC after the • However, there are exceptions to the rule that the penalty shall substitute the
cancellation and termination of the lease was in accordance with the stipulation of indemnity for damages and the payment of interests in case of non-compliance with
the parties in the said agreement and the law applicable thereto and that the the principal obligation. They are first, when there is a stipulation to the contrary;
consequent forfeiture of Sy's cash deposit in favor of OVEC was clearly agreed second, when the obligor is sued for refusal to pay the agreed penalty; and third,
upon by them in the lease agreement. The trial court further concluded that Sy was when the obligor is guilty of fraud (Article 1226, par. 1, New Civil Code).
not entitled to the writ of preliminary injunction issued in his favor after the
Page 475 of 528
• It is evident that in all said cases, the purpose of the penalty is to punish the obligor. depends on a consideration of all the facts brought forth by the parties and on a
Therefore, the obligee can recover from the obligor not only the penalty but also the determination of whether there is some legal or equitable relationship between the
damages resulting from the non-fulfillment or defective performance of the ground of recovery alleged in the counterclaim and the matters alleged as the cause
principal obligation. of action by the plaintiff (80 C.J.S. 48).
• In the case at bar, inasmuch as the forfeiture clause provides that the deposit shall • As the counterclaims of OVEC arise from or are necessarily connected with the
be deemed forfeited, without prejudice to any other obligation still owing by the facts alleged in the complaint for reformation of instrument of Sy, it is clear that said
lessee to the lessor, the penalty cannot substitute for the P100,000.00 supposed counterclaims are compulsory.
damage resulting from the issuance of the injunction against the P290,000.00
remaining cash deposit. This supposed damage suffered by OVEC was the alleged ACCORDINGLY, finding no merit in the grounds relied upon by petitioners in their
P10,000.00 a month increase in rental from P50,000.00 to P60,000,00), which petition, the same is hereby DENIED and the decision dated June 15, 1988 and the
OVEC failed to realize for ten months from February to November, 1980 in the resolution dated September 21, 1988, both of the respondent Court of Appeals are
total sum of P100,000.00. AFFIRMED.
• This opportunity cost which was duly proven before the trial court, was correctly
made chargeable by the said court against the injunction bond posted by CBISCO.
• There is likewise no merit to the claim of petitioners that respondent Court
committed serious error of law and grave abuse of discretion in not dismissing
private respondent's counterclaim for failure to pay the necessary docket fee, which
is an issue raised for the first time in this petition.
• Petitioners rely on the rule in Manchester Development Corporation v. Court of
Appeals, G.R. No. 75919, May 7, 1987, 149 SCRA 562 to the effect that all the
proceedings held in connection with a case where the correct docket fees are not
paid should be peremptorily be considered null and void because, for all legal
purposes, the trial court never acquired jurisdiction over the case.
• It should be remembered however, that in Davao Light and Power Co., Inc. v.
Dinopol, G.R. 75195, August 19, 1988, 164 SCRA 748, this Court took note of the
fact that the assailed order of the trial court was issued prior to the resolution in the
Manchester case and held that its strict application to the case at bar would therefore
be unduly harsh.
• Thus, We allowed the amendment of the complaint by specifying the amount of
damages within a non-extendible period of five (5) days from notice and the re-
assessment of the filing fees.
• Then, in Sun Insurance Office, Ltd. v. Asuncion, G.R. 79937-38, February 3, 1989,
170 SCRA 274, We held that where the filing of the initiatory pleading is not
accompanied by payment of the docket fee, the court may allow payment of the fee
within a reasonable time but in no case beyond the applicable prescriptive or
reglementary period.
• Nevertheless, OVEC's counterclaims are compulsory so no docket fees are required
as the following circumstances are present: (a) they arise out of or are necessarily
connected with the transaction or occurrence that is subject matter of the opposing
party's claim; (b) they do not require for their adjudication the presence of third
parties of whom the court cannot acquire jurisdiction; and (c) the court has
jurisdiction to entertain the claim (see Javier v. Intermediate Appellate Court, G.R.
75379, March 31, 1989, 171 SCRA 605).
• Whether the respective claims asserted by the parties arise out of the same contract
or transaction within the limitation on counterclaims imposed by the statutes CEO OCAMPO
Page 476 of 528

428 Pacific Mills v. CA | Feliciano • In determining wheter a penalty clause is iniquitous or unconscionable, a court may
G.R. No. 87182, February 17, 1992 |206 SCRA 317 take into consideration the actual damages sustained by a creditot who has been
compelled to sue the defaulting creditor, which actual damges would include the
FACTS interest and penalties which the creditor may have had to pay on its own loan from
its funding source.
• Pacific Mills purchased on credit varying quantites of cottonlint from Phillippine • In this case, the funds which Philcotton loaned to Pacific Mills came from DBP and
Cotton (Philcotton). The parties agreed to the follwing: that PhilCotton wanted to recover from Pacific Mills so that it may, in turn, pay
o That Pacific Mills would issue a promissory note for the cotton if they are back that amount to DBP. Therefore the interests and charges were only as high and
unable to pay within 60 days from delivery of the goods as that rate because Philcotton had to pay DBP their principal obligation and
• Pacific Mills failed to pay for the goods so they issued that 4 promissory notes to interest because Philcotton could not promptly collect from Pacific Mills
cover the varying quantities of cotton they bought. The promissory notes together
ith a joint manifestation stated the follwing:
o That there would be a 21% per annum interest rate
o Additional interest and penalty charge of 8%
o That Pacific Mills chall advance the insurance, taxes, and other out of
pocket expenses at 2% [for one time service fee] and 8% [for penalty charge
from due payment of advances on such premiums and taxes]
o That PhilCotton reserves the right to increase with notice to the borrower
the rate of interest on the account and advance
• Pacific Mills again falied to make good their obligation so Philcotton filed a case for
collection of sum of money in the total anount of P16M excluding interest and
charges.
• The court awarded to them P13M plus 21% regular interest per annum as stated in
joint manifestation and 14% additional interest of the principal obligation as penalty
charges and 10% attorney’s fees. (an additional 21% was removed, and the penalty
charge rate of 8% was increased to 14%, and the attorney’s fees were reduced from
25% to 10% from the trial court’s judgement)
• It is to be noted that Pacific Mills made a partial payment of the obligation in order
to lift the writ of execution upon ther possessions.
ISSUES & ARGUMENTS
W/N the penalty clause was iniquitous and imconscionable.

o Petitioner: Pacific Milss insists that the additional charges must be
reduced because the amount which the have to pay is already ridiculously
high if you take into account all the rates and charges that PhilCotton
stipulated in their joint manifestiaion
o Respondent: Philcotton conteds that Pcaific Mills was already granted a
reduction by the CA, ant a further reduction cannot merit serious
consideration.
NO. THE PENALTY CLAUSE IS VALID.

CHESKA RESPICIO
Page 477 of 528

429. RCBC vs. Court of Appeals |Kapuna It bears stressing that a contract of adhesion is just as binding as ordinary contracts. It is
G.R. No. 133107 March 25, 1999 | true that we have, on occasion, struck down such contracts as void when the weaker
party is imposed upon in dealing with the dominant bargaining party and is reduced to
FACTS the alternative of taking it or leaving it, completely deprived of the opportunity to
bargain on equal footing. Nevertheless, contracts of adhesion are not invalid per se; 7 they
• Private respondent Atty. Felipe Lustre purchased a Toyota Corolla from Toyota are not entirely prohibited. The one who adheres to the contract is in reality free to reject
Shaw, Inc. for which he made a down payment of P164,620.00, the balance of the it entirely; if he adheres, he gives his consent.
purchase price to be paid in 24 equal monthly installments. Private respondent thus While ambiguities in a contract of adhesion are to be construed against the party that
issued 24 postdated checks for the amount of P14,976.00 each. The first was dated prepared the same, this rule applies only if the stipulations in such contract are obscure
April 10, 1991; subsequent checks were dated every 10th day of each succeeding or ambiguous. If the terms thereof are clear and leave no doubt upon the intention of
month. the contracting parties, the literal meaning of its stipulations shall control. In the latter
• To secure the balance, private respondent executed a promissory note and a case, there would be no need for construction.
contract of chattel mortgage 2 over the vehicle in favor of Toyota Shaw, Inc. The The Agreement27 leaves no room for construction. All that is required is the application
contract of chattel mortgage, in paragraph 11 thereof, provided for an acceleration thereof.
clause stating that should the mortgagor default in the payment of any installment, Petitioner's conduct, in the light of the circumstances of this case, can only be described
the whole amount remaining unpaid shall become due. In addition, the mortgagor as mercenary. Petitioner had already debited the value of the unsigned check from
shall be liable for 25% of the principal due as liquidated damages. private respondent's account only to re-credit it much later to him. Thereafter, petitioner
• On March 14, 1991, Toyota Shaw, Inc. assigned all its rights and interests in the encashed checks subsequently dated, then abruptly refused to encash the last two. More
chattel mortgage to petitioner Rizal Commercial Banking Corporation (RCBC). than a year after the date of the unsigned check, petitioner, claiming delay and invoking
• All the checks dated April 10, 1991 to January 10, 1993 were thereafter encashed paragraph 11, demanded from private respondent payment of the value of said check
and debited by RCBC from private respondent's account, except for RCBC Check and that of the last two checks, including liquidated damages. As pointed out by the trial
No. 279805 representing the payment for August 10, 1991, which was unsigned. court, this whole controversy could have been avoided if only petitioner bothered to call
Previously, the amount represented by RCBC Check No. 279805 was debited from up private respondent and ask him to sign the check. Good faith not only in compliance
private respondent's account but was later recalled and re-credited, to him. Because with its contractual obligations, but also in observance of the standard in human
of the recall, the last two checks, dated February 10, 1993 and March 10, 1993, were relations, for every person "to act with justice, give everyone his due, and observe
no longer presented for payment. This was purportedly in conformity with honesty and good faith." behooved the bank to do so.
petitioner bank's procedure that once a client's account was forwarded to its account Failing thus, petitioner is liable for damages caused to private respondent. These include
representative, all remaining checks outstanding as of the date the account was moral damages for the mental anguish, serious anxiety, besmirched reputation, wounded
forwarded were no longer presented for patent. feelings and social humiliation suffered by the latter.
• On the theory that respondent defaulted in his payments, the check representing the
payment for August 10, 1991 being unsigned, petitioner, in a letter dated January 21,
1993, demanded from private respondent the payment of the balance of the debt, JAVIN OCAMPO
including liquidated damages. The latter refused, prompting petitioner to file an
action for replevin and damages before the Pasay City Regional Trial Court (RTC).
Private respondent, in his Answer, interposed a counterclaim for damages.
27 11. In case the MORTGAGOR fails to pay any of the installments, or to pay the interest that
• RTC dismissed the case while the CA affirmed the decision
• Hence this petition may be due as provided in the said promissory note, the whole amount remaining unpaid therein
shall immediately become due and payable and the mortgage on the property (ies) herein-above
described may be foreclosed by the MORTGAGEE, or the MORTGAGEE may take any other
ISSUES & ARGUMENTS legal action to enforce collection of the obligation hereby secured, and in either case the
MORTGAGOR further agrees to pay the MORTGAGEE an additional sum of 25% of the
W/N the chattel mortgage is void for being ambiguous? principal due and unpaid, as liquidated damages, which said sum shall become part thereof. The
MORTGAGOR hereby waives reimbursement of the amount heretofore paid by him/it to the
HOLDING & RATIO DECIDENDI MORTGAGEE.
NO.
Page 478 of 528

430. Ligutan vs. CA | Vitug • Although a court may equitably reduce the unconscionable or iniquitous, it is based
G.R. No. 138677, February 12, 2002 on the discretion of the Court depending on the surrounding circumstances. The
CA had already reduced the penalty from 5% to 3%. Given the circumstances, not
FACTS to mention the repeated acts of breach by petitioners of their contractual obligation,
the Court sees no cogent ground to modify the ruling of the appellate court.
• Ligutan and dela Llana obtained a P120,000 loan from Security Bank. The • Moreover, the stipulate interest of 15.189%, for the first time, the petitioners raised
promissory note contains the provisions for an interest of 15.189% per annum upon this issue in the SC. This contention is a fresh issue that has not been raised and
maturity and a penalty of 5% every month on the outstanding principal and interest ventilated before the courts below. In any event, the interest stipulation, on its face,
in case of default. In addition, petitioners agreed to pay 10% of the total amount does not appear as being that excessive.
due by way of attorney’s fees if the matter were indorsed to a lawyer for collection • What may justify a court in not allowing the creditor to impose full surcharges and
or if a suit were instituted to enforce payment. penalties, despite an express stipulation therefor in a valid agreement, may not
• The obligation became due, and despite repeated demands by the bank, the equally justify the non-payment or reduction of interest. Indeed, the interest
petitioners remained in default. The bank then filed a suit for recovery with the RTC prescribed in loan financing arrangements is a fundamental part of the banking
of Makati. business and the core of a bank's existence.
• After the bank had presented its evidence in court, instead of presenting their own,
petitioners had the hearing reset on two consecutive occasions. On the third hearing
date and both counsel and petitioners were absent, the bank moved and trial court
resolved to consider the case submitted for resolution.
• Only after two years did the petitioners filed an MR of the order of the trial court
declaring them to have waived their right to present evidence. The court denied
such and eventually promulgated a decision in favor of Security Bank.
• Upon appeal to the CA, it modified the judgment appealed from by lowering the
penalty to 3% per month instead of the stipulated.
• Petitioners then filed an MR to admit newly discovered evidence. Spouses Ligutan
executed an R.E.M. and it should have novated the contract with the bank.
Moreover, such was already foreclosed but was allegedly not credited to their
account.
• The CA denied the MR hence this petition. Petitioners also submitted that the
15.189% annual interest and the 3% monthly penalty were unconscionable.
ISSUES & ARGUMENTS
W/N the bank is entitled to the 3% monthly penalty
YES, the penalty clause is the liquidated damages for the breach of an obligation
• A penalty clause is expressly recognized by law. It is an accessory obligation for the

obligor to assume a greater responsibility upon breach of an obligation. It functions
to strengthen the coercive force of the obligation and to provide for what could be
the liquated damages for the breach of the obligation. The obligor would then be
bound to pay the stipulated indemnity without the necessity of proof on the
existence and on the measure of damages caused by the breach.
MARICE PACHECO
Page 479 of 528

431 Arwood Industries, Inc vs. D.M. Consunji, Inc | From the moment petitioner gave its consent, it was bound not only to fulfill what was
No. L-27523. February 25, 1975| expressly stipulated in the Agreement but also all the consequences which, according to
their nature, may be in keeping with good faith, usage and law. Petitioner’s attempt to
FACTS mitigate its liability to respondent should thus fail.
• Petitioner and respondent, as owner and contractor, respectively, entered into a
Moreover, even assuming that there was a default of stipulation or agreement on
Civil, Structural and Architectural Works Agreement (Agreement) dated February 6,
interest, respondent may still recover on the basis of the general provision of law, which
1989 for the construction of petitioner's Westwood Condominium at No. 23
is Article 2209 of the Civil Code, thus:
Eisenhower St., Greenhills, San Juan, Metro Manila. The contract price for the
condominium project aggregated P20,800,000.00. “Art. 2209. If the obligation consists in the payment of a sum of money, and
• Despite the completion of the condominium project, the amount of P962,434.78 the debtor incurs in delay, the indemnity for damages, there being no
remained unpaid by petitioner. Repeated demands by respondent for petitioner to stipulation to the contrary, shall be the payment of the interest agreed upon,
pay went unheeded. and in the absence of stipulation, the legal interest, which is six percent per
• Thus, on August 13, 1993, respondent, as plaintiff in Civil Case No. 63489 filed its annum.”
complaint for the recovery of the balance of the contract price and for damages
against petitioner. Article 2209 of the Civil Code, as abovementioned, specifies the appropriate
• Respondent specifically prayed for the payment of the (a) amount of P962,434.78 measure of damages where the obligation breached consisted of the payment of sum of
with interest of 2% per month or a fraction thereof, from November 1990 up to the money. Article 2209 was, in extent, explicated by the Court in State Investment House,
time of payment; (b) the amount of P250,000 as attorney's fees and litigation Inc. vs. Court of Appeals, which provides:
expenses; (c) amount of P150,000 as exemplary damages and (d) costs of suit. “The appropriate measure for damages in case of delay in discharging an
obligation consisting of the payment of a sum of money, is the payment of
penalty interest at the rate agreed upon; and in the absence of a stipulation of
ISSUES & ARGUMENTS a particular rate of penalty interest, then the payment of additional interest at
• W/N the court of appeals was correct in imposing 2% per month or the fraction a rate equal to the regular monetary interest; and if no regular interest had
thereof in days of the amount due for payment by the owner been agreed upon, then payment of legal interest or six percent (6%) per
annum.”
Hence, even in the absence of a stipulation on interest, under Article 2209 of the
Civil Code, respondent would still be entitled to recover the balance of the contract price
Delay in the performance of an obligation is looked upon with disfavor because, with interest. Respondent court, therefore, correctly interpreted the terms of the
when a party to a contract incurs delay, the other party who performs his part of the agreement which provides that “the OWNER shall be required to pay the interest at a
contract suffers damages thereby. Obviously, respondent suffered damages brought rate of two percent (2%) per month or the fraction thereof in days of the amount due for
about by the failure of petitioner to comply with its obligation on time. Damages take payment by the OWNER.”
the form of interest. Accordingly, the appropriate measure of damages in this case is the
payment of interest at the rate agreed upon, which is 2% interest for every month of
delay.
It must be noted that the Agreement provided the contractor, respondent in this
case, two options in case of delay in monthly payments, to wit: a) suspend work on the
project until payment is remitted by the owner or b) continue the work but the owner
shall be required to pay interest at a rate of two percent (2%) per month or a fraction
thereof. Evidently, respondent chose the latter option, as the condominium project was
in fact already completed. The payment of the 2% monthly interest, therefore, cannot be
jettisoned overboard.
Since the Agreement stands as the law between the parties, this Court cannot
ignore the existence of such provision providing for a penalty for every month’s delay. VP PADILLA
Page 480 of 528
432. State Investment House Inc. v Court of Appeals | Kapunan.
G.R. No. 112590, July 12, 2001 |
FACTS
• Private Respondents Malonjaos executed a real estate mortgage to secure payment

of receivables sold to plaintiff. Plaintiff has discretion to impose 3% penalty per
month for non-payment. Lomuyon Timber (one of the private respondents) sold to
plaintiff for 2.558M several receivables consisting of checks as per their agreement
• TCBTC (The Consolidated Bank and Trust Co.) Checks drawn by Malonjao in
favor of Lomuyon were indorsed to petitioner. MBTC checks were drawn by
another Malonjao in favor of Lomuyon and indorsed by the latter to petitioner.
Petitioner presented checks for payment which then subsequently bounced.
• Petitioner made several demands on private respondent for payment, respondents
failed to pay thus petitioner foreclosed on mortgaged property
• Petitioner through sheriff extrajudicially foreclosed on property and sold at public
auction for 4.223M. Petitioner alleges that after deducting cost of property sold
there is still an outstanding balance of 2.601M which as of May 31 1983 amounted
to 2.876M. Petitioner alleges it is entitled to recover on value of checks plus
exemplary damages, attorney’s fees and litigation expenses.
• TC ruled against plaintiff dismissing complaint. CA affirmed decision disallowing
petitioner to deficiency stating that penalty charge and interest is too high (3% a
month)
•
ISSUES & ARGUMENTS
1. W/N CA erred in its decision in finding SIHI not entitled

2. CA erred in reducing penalty charge as liquidated damages
CA did not err in both. CA not entitled to excess neither to penalty charge as
damages clause
• 3% p.m. or 36%pa is unconscionable and iniquitous. Art. 2227 allows for reduction
of liquidated damages as penalty or indemnity if iniquitous and unconscionable.
• Computation of difference by petitioner is erroneous, difference is only .575M and
already these amounts were under the 36% p.a. charge
• Court allowed to temper interest rates Art. 1229 allows judge to reduce interest if
obligation partly or irregularly complied with or if no performance if iniquitous or
unconscionable
CHRIS PALARCA
Page 481 of 528

433. NAWASA vs. Judge Catolico, 19 SCRA 980 (1967)
FACTS
A civil case was instituted by the Province of Misamis Occidental recover from the
NAWASA the possession, administration, operation and control of the Misamis
Waterworks System and the Orquieta Waterworks System, which had been taken over by
the NAWASA since 1956, acting in pursuance of Republic Act No. 1383.
In the said case, the Trial Court, presided by Judge Catolico, rendered judgment ordering
that:
1) the Province is the absolute owner of said Systems and ordering the NAWASA
to return the same to the Province, to refund thereto the sum of P13,855.44
which the Province had delivered to the NAWASA when it took over the
Systems,
2) to render — within thirty (30) days from notice of said decision — an
accounting of the income realized by the Systems since April 1956,
3) or, in defect of such accounting, to pay to the Province the sum of P7,823.76
monthly, the average monthly income of the two (2) Systems; from April, 1956,
to the date of the return thereof to the Province
4) to pay thereto P50,000, as temperate, punitive and exemplary damages,
and P5,000 by way of attorney's fees, in addition to the costs.
Thereafter, Judge Catolico issued 2 writs of execution over NAWASA’s opposition and
its petition to post a supersedeas bond to stay execution.
NAWASA then filed a petition for certiorari with the Supreme Court assailing the writs
of execution issued by the respondent Judge.
ISSUE & ARGUMENTS
Was Judge Catolico correct in awarding temperate, punitive, and exemplary

damages and attorneys fees in favor of the Province of Misamis?
NO.
The lower court was not justified, however, in awarding P50,000 as exemplary and
temperate damages, and P5,000, as attorney's fees, for the NAWASA took over the
Systems in compliance with said Republic Act No. 1383, which it was entitled to assume
to be constitutional. In other words, it had acted in good faith. The fact that RA 1383
was subsequently declared unconstitutional is of no moment since at the time NAWASA
acted in pursuance of it, it acted so in good faith on the assumption that the law was
constitutional. BYRON PEREZ
Page 482 of 528

434. Octot vs. Ybanez| Teehankee matter of right, their determination depending upon the amount of
G.R. No. l48643, January 18, 1982 | 111 SCRA 79 compensatory damages that may be awarded to the claimant.
o The claimant must first establish his right to moral, temperate, liquidated
FACTS or compensatory damages.
o The wrongful act must be accompanied by bad faith, and the award would
• Octot was a Government Employee who held the position of Security Guard. be allowed only if the guilty party acted in a wanton, fraudulent, reckless,
Pursuant to PD 6, he was dismissed from the service as he had a pending libel case oppressive or malevolent manner.
against him. Later on he was acquitted from the criminal case.
• Alfredo Imbong then filed a request for Octot’s reinstatement. The request was
favorably acted upon by all levels. The papers were sent to Octot stating that his
request for reinstatement may be given due course pursuant to LOI 647. Octot
failed to appear and so he was personally furnished with the necessary papers to be
filed to support his appointment. Octot sent a letter again asking for reinstatement.
The regional health director then instructed Octot to appear to furnish the necessary
documents. Octot did not appear but filed a case for mandamus for his
reinstatement.
• As his reinstatement was never disputed, he was reinstated.
ISSUES & ARGUMENTS
1. W/N Octot can claim backwages

2. W/N Octot can claim moral damages
3. W/N Octot can claim exemplary damages
No
• In the absence of bad faith or abuse of discretion, Octot cannot claim backwages
and damages. There was no bad faith in this case as the dismissal was due to law,
PD 6. Also, LOI647 does not provide for payment of back wages
No
• The delay in the reinstatement of Octot was due to his own fault. Also seeing as
there was no Bad Faith involved and that it doesn’t involve the situations under
2219 and 2220, moral damages cannot be claimed
No
• Exemplary damages are not usually recoverable in a mandamus case unless the
defendant patently acted with vindictiveness and wantonness. It is granted by way of
example or correction for the public good.
• Requisites
o They may be imposed by way of example or correction only in addition,
among others, to compensatory damages, and cannot be recovered as a
JAN PORTER
Page 483 of 528

435. Patricio v. Leviste|Padilla o The act of private respondent in hitting petitioner on the face is contrary to
G.R. L-51832, April 26, 1989 morals and good customs and caused the petitioner mental anguish, moral
shock, wounded feelings and social humiliation. Private respondent has to take
FACTS full responsibility for his act and his claim that he was unaware of what he had
• Petitioner was a Catholic priest appointed Director General of 1976 Religious and done to petitioner because of drunkenness is definitely no excuse and does not
Municipal Town Fiesta of Pilar, Capiz. relieve him of his liability to the latter.
• On 16 May 1976 at about 10:00 o'clock in the evening, while a benefit dance was o The fact that no actual or compensatory damage was proven before the trial
on-going in connection with the celebration of the town fiesta, petitioner together court, does not adversely affect petitioner's right to recover moral damages.
with two (2) policemen were posted near the gate of the public auditorium. Private Moral damages may be awarded in appropriate cases referred to in the chapter
respondent Bienvenido Bacalocos, President of the Association of Barangay on human relations of the Civil Code (Articles 19 to 36), without need of proof
Captains of Pilar, Capiz and a member of the Sangguniang Bayan, who was in a state that the wrongful act complained of had caused any physical injury upon the
of drunkenness, struck a bottle of beer on the table causing an injury on his hand complainant
which started to bleed. He approached petitioner in a hostile manner and asked the • Exemplary or corrective damages may be imposed upon herein private respondent by way of
latter if he had seen his wounded hand, and before petitioner could respond, private example or correction for the public good. Exemplary damages are required by public policy to
respondent, without provocation, hit petitioner's face with his bloodied hand. As a suppress the wanton acts of the offender. They are an antidote so that the poison of wickedness may
consequence, a commotion ensued. not run through the body politic. The amount of exemplary damages need not be proved where it is
• A criminal complaint for "Slander by Deed was flied by petitioner but was shown that plaintiff is entitled to either moral, temperate or compensatory damages, as the case may
dismissed. Subsequently, a complaint for damages was filed by petitioner with the be, although such award cannot be recovered as a matter of right.
court a quo. The court awarded moral and exemplary damages in favor of petitioner
as well as attorney’s fees. • In cases where exemplary damages are awarded to the injured party, attorney's fees
• Petitioner moved for execution of judgment but this was denied owing to the are also recoverable.
pendency of a motion for reconsideration. Subsequently, the court dismissed the
complaint, prompting the filing of the subject petition on 2 grounds: (1) lack of
service of copy of MR, and (2) admission of private respondent of slapping
petitioner entitles petitioner to award of damages.
ISSUES & ARGUMENTS
W/N petitioner is entitled to damages originally awarded by TC.

• Yes. Moral and exemplary damages should be given. Petitioner is also entitled to
attorney’s fees.
• There is no question that moral damages may be recovered in cases where a
defendant's wrongful act or omission has caused the complainant physical suffering,
moral shock, social humiliation and similar injury.
o Private respondent's contention that there was no bad faith on his part in
slapping petitioner on the face and that the incident was merely accidental is
not tenable. It was established before the court a quo that there was an existing
feud between the families of both petitioner and private respondent and that
private respondent slapped the petitioner without provocation in the presence
of several persons.
AYEN QUA
Page 484 of 528

436 Philippine Airlines v. CA| Regalado • More importantly, it has been sufficiently established that it is PAL’S standard
G.R. No. 120262 July 17, 1997 | 275 SCRA 621 company policy, whenever a flight has been cancelled, to extend to its hapless
passengers cash assistance or to provide them accommodations in hotels with which
FACTS it has existing tie-ups. In fact, PAL’s Mactan Airport Manager for departure services,
• Leo Pantejo was bound for Surigao City from Cebu City via Philippine Airlines. His Oscar Jereza, admitted that PAL has an existing arrangement with hotels to
flight was postponed due to the typhoon Osang. accommodate stranded passengers,
• Since he was stranded with the other passengers, he asked the Philippine Airlines
officer for hotel accommodations while waiting for the next scheduled flight which
was on the following day.
• Philippine Airlines refused to give him hotel accommodations, which was
unfortunate because he did not have any cash at that time. A kind co-passenger,
Engr. Dumlao offered Pantejo to share his room, Pantejo promised to pay him
when they get back to Surigao.
• Upon reaching Surigao, he learned that the hotel expenses of the passengers were
reimbursed. At this point, Pantejo informed Oscar Jereza, PAL's Manager for
Departure Services at Mactan Airport and who was in charge of cancelled flights,
that he was going to sue the airline for discriminating against him. It was only then
that Jereza offered to pay respondent Pantejo P300.00 which, due to the ordeal and
anguish he had undergone, the latter decline.
ISSUES & ARGUMENTS
W/N Pantejo is entitled to MORAL and EXEMPLARY DAMAGES for refusing

to provide hotel accommodations to Pantejo
YES. PANTJO IS ENTITLED TO MORAL AND EXEMPLARY DAMAGES

AS THERE WAS BAD FAITH ON THE PART OF PHILIPPPINE AIRLINES
ATTENDANTS.
• To begin with, 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. It invites people to avail of the comforts and advantages it
offers. The contract of air carriage, therefore, generates a relation attended with a
public duty. Neglect or malfeasance of the carrier's employees naturally could give
ground for an action for damages
• Assuming arguendo that the airline passengers have no vested right to these
amenities in case a flight is cancelled due to force majeure, what makes petitioner
liable for damages in this particular case and under the facts obtaining herein is its
blatant refusal to accord the so-called amenities equally to all its stranded passengers
who were bound for Surigao City. No compelling or justifying reason was advanced
for such discriminatory and prejudicial conduct.
CHESKA RESPICIO
Page 485 of 528

437. Industrial Insurance vs. Bondad | Panganiban • Yes. In justifying the award of attorney's fees and other litigation expenses, the
G.R. No. 136722, April 12, 2000 | appellate court held that respondents were compelled to litigate an unfounded suit
because of petitioner's negligence and lack of prudence in not verifying the facts
FACTS before filing this action. In affirming the award of moral damages, it accepted the
trial court's justification that respondents had "been recklessly and without basis . . .
• The present Petition finds its roots in an incident which involved three vehicles: a impleaded by the plaintiff in spite of the clear language in the Traffic Investigation
Galant Sigma car driven by Grace Ladaw Morales, a packed passenger jeepney Report . . . submitted by Pfc. Agapito Domingo."
originally driven by Ligorio Bondad, and a DM Transit Bus driven by Eduardo • Attorney's fees may be awarded by a court if one who claims it is compelled to
Mendoza. litigate with third persons or to incur expenses to protect one's interests by reason
• Investigation disclosed that shortly before the accident took place, V-3 (D.M. of an unjustified act or omission on the part of the party from whom it is sought. In
Transit Bus) was traveling along South Expressway coming from Alabang towards this case, the records show that petitioner's suit against respondents was manifestly
the general direction of Makati. When upon reaching a place at KM Post 14 [in unjustified. In the first place, the contact between the vehicles of respondents and of
front] of Merville Subd., said V-3 hit and bumped the rear left side portion of V-1 Morales was completely due to the impact of the onrushing bus. This fact is
[Bondads' jeepney] which was then at [stop] position due to flat tire[;] due to the manifest in the police investigation report and, significantly, in the findings of facts
severe impact cause by V-3 it swerved to the left and collided with the right side of both lower courts.Moreover, even a cursory examination of the events would
portion of V-2 [Morales' car] which was travelling [in] the same direction taking the show that respondents were not even remotely the cause of the accident. Their
innermost lane V-2 was dragged to its left side and hit the concrete wall. All vehicles vehicle was on the shoulder of the road because of a flat tire. In view of their
incurred damages and sustaining injuries to the occupant of V-1 and the passengers emergency situation, they could not have done anything to avoid getting hit by the
of V-3. Victims were brought to the hospital for treatment bus. Verily, an ordinary person has no reason to think that respondents could have
• Before the Regional Trial Court of Makati on April 12, 1985, Petitioner Industrial caused the accident. It is difficult to imagine how petitioner could have thought
Insurance Company, Inc. and Grace Ladaw Morales filed a Complaint for damages so.More significantly, petitioner knew that respondents were not the cause of the
7 against DM Transit Corporation, Eduardo Diaz, Pablo Bondad and Ligorio accident. This is evident from its failure to even make a prior formal demand on
Bondad. Petitioner contended that it had paid Morales P29,800 for the damages to them before initiating the suit. Indeed, the cause of the accident was the negligence
her insured car. It also asserted that the December 17, 1984 accident had been of the DM Transit bus driver.
caused "solely and proximately" by the "joint gross and wanton negligence, • In the same vein, we affirm the award of moral damages. To sustain this award, it
carelessness and imprudence of both defendant drivers Eduardo Diaz y Mendoza must be shown that (1) the claimant suffered injury, and (2) such injury sprung from
and Ligorio Bondad y Hernandez, who failed to exercise and observe the diligence any of the cases listed in Articles 2219 and 2220 of the Civil Code. It is not enough
required by law in the management and operation of their respective vehicles and by that the claimant alleges mental anguish, serious anxiety, wounded feelings, social
their defendant employers; D.M. Transit Corporation and Pablo Bondad, humiliation, and the like as a result of the acts of the other party. It is necessary that
respectively, for their failure to exercise the diligence required of them by law in the such acts be shown to have been tainted with bad faith or ill motive. In the case at
selection and supervision of their employees including their aforementioned bar, it has been shown that the petitioner acted in bad faith in compelling
involved drivers respondents to litigate an unfounded claim. As a result, Respondent Ligorio Bondad
• In its October 14, 1991 Decision, the trial court exculpated the Bondads and "could no longer concentrate on his job." Moreover, Pablo Bondad became sick and
ordered petitioner to pay them actual, moral and exemplary damages, as well as even suffered a mild stroke. Indeed, respondents' anxiety is not difficult to
attorney's fees.Petitioner appealed to the Court of Appeals, which affirmed the understand. They were innocently attending to a flat tire on the shoulder of the
ruling of the trial court with modification.Hence, this Petition for Review. road; the next thing they knew, they were already being blamed for an accident.
Worse, they were forced to commute all the way from Laguna to Makati in order to
ISSUES & ARGUMENTS attend the hearings. Under the circumstances of this case, the award of moral
damages is justified.
W/N The award for damages was proper • Likewise, we affirm the award of exemplary damages because petitioner's conduct
needlessly dragged innocent bystanders into an unfounded litigation. Indeed,
exemplary damages are imposed by way of example or correction for the public
good, in addition to moral, temperate, liquidated or compensatory damages.
DEANNE REYES
Page 486 of 528

438. People of the Philippines, vs. Albior |G.R. No. 115079 | February 19, 2001 |
QUISUMBING, J.:
FACTS
• The RTC found Francisco Albior guilty of rape, and sentenced him to suffer the
penalty of reclusion perpetua. The victim, Lorena Tolentino was also awarded moral
damages in the amount of P50,000.
ISSUE
Whether or not the award of damages are sufficient?
• The Court affirmed the ruling of trial court, finding that the accused Albior was
indeed guilty of rape. However, the court modified the award of civil damages. The
lower court failed to grant the necessary civil indeminity which is mandated by
jurisprudence to be awarded to rape victims. An additional P50,000 was granted by
the court, and this was held to be separate and distinct from that of the award of
moral damages.
(Note: this is the only related pronouncement with regard to damages in this
case).
JR RUIZ
Page 487 of 528

439. Traders Royal Bank v. Radio Philippines Network, Inc. | Corona should have known the effects of a crossed check: (a) the check may not be encashed but
G.R. No. 138510, October 10, 2002| only deposited in the bank; (b) the check may be negotiated only once to one who has an
account with a bank and (c) the act of crossing the check serves as a warning to the
FACTS holder that the check has been issued for a definite purpose so that he must inquire if he
On April 15, 1985, the Bureau of Internal Revenue (BIR) assessed plaintiffs Radio has received the check pursuant to that purpose, otherwise, he is not a holder in due
Philippines Network (RPN), Intercontinental Broadcasting Corporation (IBC), and course.
Banahaw Broadcasting Corporation (BBC) of their tax obligations for the taxable years By encashing in favor of unknown persons checks which were on their face payable to
1978 to 1983. the BIR, a government agency which can only act only through its agents, petitioner did
On March 25, 1987, Mrs. Lourdes C. Vera, plaintiffs’ comptroller, sent a letter to the so at its peril and must suffer the consequences of the unauthorized or wrongful
BIR requesting settlement of plaintiffs’ tax obligations. endorsement.In this light, petitioner TRB cannot exculpate itself from liability by
The BIR granted the request and accordingly, on June 26, 1986, plaintiffs purchased claiming that respondent networks were themselves negligent.
from defendant Traders Royal Bank (TRB) three (3) manager’s checks to be used as A bank is engaged in a business impressed with public interest and it is its duty to protect
payment for their tax liabilities its many clients and depositors who transact business with it. It is under the obligation to
Defendant TRB, through Aida Nuñez, TRB Branch Manager at Broadcast City Branch, treat the accounts of the depositors and clients with meticulous care, whether such
turned over the checks to Mrs. Vera who was supposed to deliver the same to the BIR in accounts consist only of a few hundreds or millions of pesos.
payment of plaintiffs’ taxes. Since TRB did not pay the rightful holder or other person or entity entitled to receive
Sometime in September, 1988, the BIR again assessed plaintiffs for their tax liabilities for payment, it has no right to reimbursement. Petitioner TRB was remiss in its duty and
the years 1979-82. It was then they discovered that the three (3) managers checks (Nos. obligation, and must therefore suffer the consequences of its own negligence and
30652, 30650 and 30796) intended as payment for their taxes were never delivered nor disregard of established banking rules and procedures.
paid to the BIR by Mrs. Vera. Instead, the checks were presented for payment by We agree with petitioner, however, that it should not be made to pay exemplary damages
unknown persons to defendant Security Bank and Trust Company (SBTC), Taytay to RPN, IBC and BBC because its wrongful act was not done in bad faith, and it did not
Branch as shown by the bank’s routing symbol transit number (BRSTN 01140027) or act in a wanton, fraudulent, reckless or malevolent manner.
clearing code stamped on the reverse sides of the checks.
Meanwhile, for failure of the plaintiffs to settle their obligations, the BIR issued warrants
of levy, distraint and garnishment against them. Thus, they were constrained to enter into
a compromise and paid BIR P18,962,225.25 in settlement of their unpaid deficiency
taxes.
Thereafter, plaintiffs sent letters to both defendants, demanding that the amounts
covered by the checks be reimbursed or credited to their account. The defendants
refused, hence, the instant suit
ISSUES & ARGUMENTS
Whether TRB should be held solely liable when it paid the amount of the checks
in question to a person other than the payee indicated on the face of the check,
the Bureau of Internal Revenue?
Petitioner ought to have known that, where a check is drawn payable to the order of one
person and is presented for payment by another and purports upon its face to have been
duly indorsed by the payee of the check, it is the primary duty of petitioner to know that
the check was duly indorsed by the original payee and, where it pays the amount of the
check to a third person who has forged the signature of the payee, the loss falls upon
petitioner who cashed the check. Its only remedy is against the person to whom it paid
the money.
It should be noted further that one of the subject checks was crossed. The crossing of
one of the subject checks should have put petitioner on guard; it was duty-bound to
ascertain the indorser’s title to the check or the nature of his possession. Petitioner DIKKI SIAN
Page 488 of 528

440 Singapore Airlines Ltd. Vs. Fernandez| Callejo explained her predicament but the male employee uncaringly retorted: “It’s your
G.R. No. 142305. December 10, 2003| problem, not ours.”
• The respondent never made it to Manila and was forced to take a direct flight from
FACTS Singapore to Malaysia on January 29, 1991, through the efforts of her mother and
• Andion Fernandez is an acclaimed soprano here in the Philippines and abroad. At travel agency in Manila. Her mother also had to travel to Malaysia bringing with her
the time of the incident, she was availing an educational grant from the Federal respondent’s wardrobe and personal things needed for the performance that caused
Republic of Germany, pursuing a Master’s Degree in Music majoring in Voice. them to incur an expense of about P50,000.
• She was invited to sing before the King and Queen of Malaysia on February 3 and 4, • As a result of this incident, the respondent’s performance before the Royal Family
1991. For this singing engagement, an airline passage ticket was purchased from of Malaysia was below par. Because of the rude and unkind treatment she received
petitioner Singapore Airlines which would transport her to Manila from Frankfurt, from the petitioner’s personnel in Singapore, the respondent was engulfed with fear,
Germany on January 28, 1991. From Manila, she would proceed to Malaysia on the anxiety, humiliation and embarrassment causing her to suffer mental fatigue and
next day. It was necessary for the respondent to pass by Manila in order to gather skin rashes. She was thereby compelled to seek immediate medical attention upon
her wardrobe; and to rehearse and coordinate with her pianist her repertoire for the her return to Manila for “acute urticaria.”
aforesaid performance. • RTC held: (P100,000.00) PESOS as exemplary damages; petitioner appealed, CA
• The petitioner issued the respondent a Singapore Airlines ticket for Flight No. SQ affirmed in toto. Petitioner further appealed, hence this case.
27, leaving Frankfurt, Germany on January 27, 1991 bound for Singapore with
onward connections from Singapore to Manila. Flight No. SQ 27 was scheduled to ISSUES & ARGUMENTS
leave Frankfurt at 1:45 in the afternoon of January 27, 1991, arriving at Singapore at • W/N petitioner should be held liable for exemplary damages
8:50 in the morning of January 28, 1991. The connecting flight from Singapore to
Manila, Flight No. SQ 72, was leaving Singapore at 11:00 in the morning of January HOLDING & RATIO DECIDENDI
28, 1991, arriving in Manila at 2:20 in the afternoon of the same day.
• On January 27, 1991, Flight No. SQ 27 left Frankfurt but arrived in Singapore two YES, petitioner should be held liable for exemplary damages
hours late or at about 11:00 in the morning of January 28, 1991. By then, the • When an airline issues a ticket to a passenger, confirmed for a particular flight on a
aircraft bound for Manila had left as scheduled, leaving the respondent and about 25 certain date, a contract of carriage arises. The passenger then has every right to
other passengers stranded in the Changi Airport in Singapore. expect that he be transported on that flight and on that date. If he does not, then
• Upon disembarkation at Singapore, the respondent approached the transit counter the carrier opens itself to a suit for a breach of contract of carriage.
who referred her to the nightstop counter and told the lady employee thereat that it • Article 2232 of the Civil Code provides that in a contractual or quasi-contractual
was important for her to reach Manila on that day, January 28, 1991. The lady relationship, exemplary damages may be awarded only if the defendant had acted in
employee told her that there were no more flights to Manila for that day and that a “wanton, fraudulent, reckless, oppressive or malevolent manner.” In this case,
respondent had no choice but to stay in Singapore. Upon respondent’s persistence, petitioner’s employees acted in a wanton, oppressive or malevolent manner. The
she was told that she can actually fly to Hong Kong going to Manila but since her award of exemplary damages is, therefore, warranted in this case.
ticket was non-transferable, she would have to pay for the ticket. The respondent • Bad faith was imputed by the trial court when it found that the petitioner’s
could not accept the offer because she had no money to pay for it. Her pleas for the employees at the Singapore airport did not accord the respondent the attention and
respondent to make arrangements to transport her to Manila were unheeded. treatment allegedly warranted under the circumstances. The lady employee at the
• The respondent then requested the lady employee to use their phone to make a call counter was unkind and of no help to her. The respondent further alleged that
to Manila. Over the employees’ reluctance, the respondent called her mother to without her threats of suing the company, she was not allowed to use the company’s
inform the her that she missed the connecting flight. The respondent contacted a phone to make long distance calls to her mother in Manila. The male employee at
family friend who picked her up from the airport for her overnight stay in the counter where it says: “Immediate Attention to Passengers with Immediate
Singapore. Booking” was rude to her when he curtly retorted that he was busy attending to
• The next day, after being brought back to the airport, the respondent proceeded to other passengers in line. The trial court concluded that this inattentiveness and
petitioner’s counter which says: “Immediate Attention To Passengers with rudeness of petitioner’s personnel to respondent’s plight was gross enough
Immediate Booking.” There were four or five passengers in line. The respondent amounting to bad faith. This is a finding that is generally binding upon the Court
approached petitioner’s male employee at the counter to make arrangements for which we find no reason to disturb.
immediate booking only to be told: “Can’t you see I am doing something.” She
FRANK TAMARGO
Page 489 of 528
441. NPC vs Court of Appeals | Carpio • Nonetheless, we find it proper to award P50,000 in temperate damages to Pobre.
G.R. No. 106804, August 12, 2004| The court may award temperate or moderate damages, which are more than
nominal but less than compensatory damages, if the court finds that a party has
FACTS suffered some pecuniary loss but its amount cannot be proved with certainty from
the nature of the case. As the trial and appellate courts noted, Pobre's resort-
• Private respondent Pobre is the owner of a 68,969 square-meter land ("Property") subdivision was no longer just a dream because Pobre had already established the
located in Albay. Pobre began developing the Property as a resort-subdivision, resort-subdivision and the prospect for it was initially encouraging. That is, until
which he named as "Tiwi Hot Springs Resort Subdivision." The Commission on NPC permanently damaged Pobre's Property. NPC did not just destroy the
Volcanology certified that thermal mineral water and steam were present beneath property. NPC dashed Pobre's hope of seeing his Property achieve its full potential
the Property and found the thermal mineral water and steam suitable for domestic as a resort-subdivision.
use and potentially for commercial or industrial use. • The lesson in this case must not be lost on entities with eminent domain authority.
• NPC then became involved with Pobre's Property in three instances. First was Such entities cannot trifle with a citizen's property rights. The power of eminent
when Pobre leased to NPC for one year eleven lots from the approved subdivision domain is an extraordinary power they must wield with circumspection and utmost
plan. Second was sometime in 1977, the first time that NPC filed its expropriation regard for procedural requirements. Thus, we hold NPC liable for exemplary
case against Pobre to acquire an 8,311.60 square-meter portion of the Property. The damages of P100,000. Exemplary damages or corrective damages are imposed, by
trial court ordered the expropriation of the lots upon NPC's payment of P25 per way of example or correction for the public good, in addition to the moral,
square meter or a total amount of P207,790. NPC began drilling operations and temperate, liquidated or compensatory damages.
construction of steam wells. While this first expropriation case was pending, NPC Petition denied for lack of Merit. Decision of the Court of Appeals Affirmed.
dumped waste materials beyond the site agreed upon by NPC with Pobre. The
dumping of waste materials altered the topography of some portions of the
Property. NPC did not act on Pobre's complaints and NPC continued with its
dumping. Third was in 1979 when NPC filed its second expropriation case against
Pobre to acquire an additional 5,554 square meters of the Property. NPC needed the
lot for the construction and maintenance of Naglagbong Well Site.
• Pobre filed a motion to dismiss the second complaint for expropriation. Pobre
claimed that NPC damaged his Property. Pobre prayed for just compensation of all
the lots affected by NPC's actions and for the payment of damages.
• NPC filed a motion to dismiss the second expropriation case on the ground that
NPC had found an alternative site and that NPC had already abandoned in 1981 the
project within the Property due to Pobre's opposition. The trial court granted NPC's
motion to dismiss but the trial court allowed Pobre to adduce evidence on his claim
for damages. The trial court admitted Pobre's exhibits on the damages because NPC
failed to object
ISSUES & ARGUMENTS

W/N NPC is liable to respondent to pay damages?
NPC liable to pay temperate and exemplary damages.

• NPC's abuse of its eminent domain authority is appalling. However, we cannot
award moral damages because Pobre did not assert his right to it. We also cannot
award attorney's fees in Pobre's favor since he did not appeal from the decision of
the Court of Appeals denying recovery of attorney's fees.
MAUI MORALES
Page 490 of 528

442. De Leon v CA | Paras accede to the demand of the former to have the mortgage lien on the property in
G.R. No. L-31931 August 31, 1988 | question cancelled or discharged because the full amount of the mortgage debt of
P68,824.00 plus the 10% interest thereon from May 22, 1959 has not yet been fully
FACTS paid either by the plaintiffs or by the spouses Juan Briones and Magdalena
Bernardo.
• Sps. Briones (Juan Briones and Magdalena Bernardo) were former registered owners • RTC dismissed the complaint and ordered for Sps. De Leon to pay Dr. Cornelio the
of the fishpond situated at San Roque, Paombong, Bulacan. Said property was sum of P64,921.60 with interest thereon at 10% per annum from February 5, 1962
mortgaged twice to secure a loan obtained from, initially Hermogenes Tantoco but until fully paid; payment of the sum of P100,000 as moral and exemplary damages,
was later on assigned to, Dr. Cornelio Tantoco, Hermogenes’ father, in the amounts and further sum of P10,000 as attorney’s fees
of P20,000 and P68,824 (the later having a 10% interest per annum). Both • On appeal, CA affirmed the judgment of trial court with modification respecting the
mortgages were duly registered in the Office of the Register of Deeds of Bulacan award of moral and exemplary damages as well as attorney’s fees.
and duly annotated at the back of the TCT.
• While these two mortgages were still subsisting the Sps. Briones sold the fishpond,
which is the subject matter of said two mortgages, to plaintiff Sps. De Leon ISSUES & ARGUMENTS
(Fortunato de Leon and Juana F. Gonzales de Leon) in the amount of P120,000.00.
Of the amount of P120,000.00, the Sps. Briones actually received only the amount W/N the award of P60,000 in the concept of moral and exemplary damages is
of P31,000.00 on June 2, 1959, as the amount of P89,000.00 was withheld by the proper?
Fortunato de Leon who assumed to answer the mortgage indebtedness of the
Briones to the Tantocos. After the sale Sps. De Leon satisfied the mortgage loan of HOLDING & RATIO DECIDENDI
P20,000.00 including 10% interest per annum to Hermogenes Tantoco who then
accordingly executed a deed of discharge of mortgage, but the mortgage in favor of YES. Respondent Court found malice in De Leon's refusal to satisfy Dr.
Cornelio S. Tantoco in the amount of P68,824 was not satisfied. On February 5, Tantoco’s lawful claim and in their subsequent filing of the present case against
1962 plaintiffs made payment of P29,382.50 to the Dr. Cornelio. the latter, and took into consideration the worries and mental anxiety of latter as a
• Trying to set the record straight, Dr. Cornelio made the clarification that the result thereof.
principal obligation of the Briones as of May 25, 1959 was P68,824.00 and on • Moral damages include physical suffering, mental anguish, fright, serious anxiety,
January 26, 1962 when a letter of demand was sent to them their total obligation besmirched reputation, wounded feelings, moral shock, social humiliation and
including the agreed interest amounted to P88,888.98. Hence the above mentioned similar injury. Though incapable of pecuniary computation, moral damages may be
PNB check will be held in abeyance pending remittance of the total obligation after recovered if they are the proximate result of the defendant's wrongful act or
which the necessary document will be executed. omission.
• On May 8, 1962 the Sps. De Leon filed a complaint with the Court of First Instance • On the other hand, jurisprudence sets certain conditions when exemplary damages
of Bulacan against defendant Cornelio S. Tantoco for discharge of mortgage. On may be awarded, to wit: (1) They may be imposed by way of example or correction
May 31, 1962 Dr. Cornelio filed his answer with counterclaim and third party only in addition, among others, to compensatory damages and cannot be recovered
complaint against the Sps. Briones with petition for leave to file third party as a matter of right, their determination depending upon the amount of
complaint. He alleged by way of special and affirmative defenses, among others, that compensatory damages that may be awarded to the claimant; (2) the claimant must
the true and real amount of obligation of the Sps. Briones is the sum of P68,824.00, first establish his right to moral, temperate, liquidated or compensatory damages;
Philippine currency, with 10% interest secured by a second mortgage in favor of and (3) the wrongful act must be accompanied by bad faith, and the award would be
defendant, executed and signed by the Briones spouses on May 26,1959, which deed allowed only if the guilty party acted in a wanton, fraudulent, reckless, oppressive or
of second mortgage was duly registered in the Office of the Register of Deeds of malevolant manner.
Malolos, Bulacan on May 27, 1959 and properly annotated at the back of Transfer • As a lawyer in the practice of law since his admission to the Bar in 1929, who has
Certificate of Title No. 28296 issued in the names of Juan Briones and Magdalena held several important positions in the government petitioner Fortunato de Leon
Bernardo; that the amount of P29,382.50 sent by Sps. DeLeon as alleged counsel of could not have missed the import of the annotation at the back of TCT regarding
the spouses Juan Briones and Magdalena Bernardo was accepted by Dr. Cornelio as the second mortgage for the sum of sixty eight thousand eight hundred twenty-four
part payment or partial extinguishment of the mortgage loan of P68,824.00 with pesos (P68,824.00) of the property he was buying, in favor of respondent Cornelio
10% interest thereon per annum from May 22, 1959, and Sps. De Leon have been Tantoco. The same annotation was transferred to the new TCT issued in the name
informed of the tenor of said acceptance and application and, that the latter did not of De Leon after the sale of the property was effected and entered in the registry of
Page 491 of 528
deeds of Bulacan on June 3, 1959. Furthermore, Sps. De Leon cannot deny having
assumed the mortgage debts of the Sps. Briones amounting to P89,000.00 in favor
of the Tantocos. The "Patunay" executed by the Sps. Briones on June 3, 1959 gives
the information that their property, and fishpond, was sold by them to the spouses
Fortunato de Leon and Juana F. Gonzales for the amount of one hundred twenty
thousand pesos (Pl20,000.00), payment made to them, as follows:
Pinanagutan na aming pagkakautang kay
G. Hermogenes Tantoco hanggang Mayo 1959 P 89,000.00

Cash na tinanggap namin PBC Check No. 57040 11,000.00
Pagare No. 1 Junio 1, 1959 10,000.00
Pagare No. 2 Junio 1, 1959 10,000.00
Kabuuan P 120,000.00
• At the bottom of the "Patunay" in the handwriting of petitioner Fortunato de Leon
is a statement signed by him signifying that he was assuming the spouses'debt of
P89,000.00 to respondent Tantoco, in the following words:
Ang pagkautang na P89,000.00 sa mga Tantoco ay aking inaasumihan.
• The entitlement to moral damages having been established the award of
exemplary damages is proper. And while the award of moral and exemplary
damages in an aggregate amount may not be the usual way of awarding said damages
there is no question of Dr. Tantoco's entitlement to moral and exemplary damage.
The amount should be reduced, however, for being excessive compared to the
actual losses sustained by the aggrieved party. Moral damages though incapable of
pecuniary estimations, are in the category of an award designed to compensate the
claimant for actual injury suffered and not to impose a penalty of the wrongdoer.
• In the case of Miranda Ribaya v. Bautista, this Court considered 25% of the
principal amount as reasonable. In the case at bar, the Court of Appeals found on
February 21, 1970 that the outstanding balance of the disputed loan was P64,921.69.
Twenty five percent thereof is P16,230.00 but considering the depreciation of the
Philippine peso today, it is believed that the award of moral and exemplary damages
in the amount of P25,000.00 is reasonable.
TEL VIRTUDEZ
Page 492 of 528

443. People v. Cristrobal| Quisumbing
GR No. 116279 January 29, 1996|
FACTS
• The pain rape causes becomes more excruciating when the victim carries the life of
an unborn within her womb. That tender and innocent life, born of love and its
parents’ participation in the mystery of life, is thereby placed in undue danger. Such
was the case of Cherry Tamayo, a married woman. She was twenty-eight years old,
with one child and another on the way, when tragedy struck. She was sexually
assaulted on 31 March 1986. Fortunately, the life in her womb survived.
• She accused Rogelio Cristobal of rape in a sworn complaint
• Having found sufficient ground to engender a well-founded belief that the crime
charged has been committed and the accused was probably guilty thereof, the court
ruled that the accused should be held for trial. Accordingly, it issued a warrant for
his arrest and fixed his bail bond at P17,000.00. The accused was arrested but was
later released on bail. Thereafter, the court increased the amount of bail to
P30,000.00 and, consequently, ordered the rearrest of the accused. Unfortunately, by
this time, he was nowhere to be found.
• The trial court found the accused guilty beyond reasonable doubt of the crime of
rape and sentenced him to suffer the penalty of reclusion perpetua and to indemnify the
complainant, Cherry Tamayo, in the amount of P30,000.00.
• The trial court found clear and convincing the categorical testimony of Cherry
Tamayo of having been accosted from behind, knocked to the ground, boxed,
submerged in water, taken three meters from the creek, and raped.
• The Appellee disagrees with him and prays that the assailed decision be affirmed
with modification of the award for moral damages, which should be increased from
P30,000.00 to P50,000.00.
ISSUES & ARGUMENTS
Whether it is proper to increase the moral damages and exemplary damages?
Yes.
For sexually assaulting a pregnant married woman, the accused has shown moral
corruption, perversity, and wickedness. He has grievously wronged the institution of
marriage. The imposition then of exemplary damages by way of example to deter others
from committing similar acts or for correction for the public good is warranted. We
hereby fix it at P25,000.00.
Pursuant to the current policy of this Court, the moral damages awarded by the trial
court should be increased from P30,000.00 to P40,000.00.
The award of moral damages is increased from P30,000.00 to P40,000.00, and the
accused is further ordered to pay exemplary damages in the amount of P25,000.00. SATURDAY ALCISO
Page 493 of 528

444. PNB vs. Utility Assurance ISSUES & ARGUMENTS
FACTS Whether UTTASCO’s contention is correct.
The Kangyo Bank Ltd., Tokyo, Japan, issued Letter of Credit in the amount of US$ 28,150.00 HOLDING & RATIO DECIDENDI
in favor of the Pedro Bartolome Enterprises of Manila to cover an export shipment of logs to
Japan. The beneficiary of the Letter of Credit assigned its rights to Lanuza Lumber. On 29 No. The SC DISMISSED the appeal by defendant-appellant Utility Assurance &
March 1960, Procopio Caderao, doing business under the trade name "Lanuza Lumber,"
Surety Co., Inc. for lack of merit, and AFFIRMED the judgment of the trial court.
obtained a loan of P 25,000.00 from plaintiff-appellee Philippine National Bank (PNB) as
evidenced by a promissory note on the security, among other things, of the proceeds of the
Letter of Credit. The PNB in addition required Lanuza Lumber to submit a surety bond. The objection has to be overruled, because as far back as the year 1922 SC held in
Defendant- Appellant Utility Assurance & Surety Co., Inc. ("Utassco"), accordingly, executed Tagawa vs. Aldanese, 43 Phil. 852, that creditors suing on a suretyship bond may recover
Surety Bond in favor of PNB. In addition to the agreement was an endorsement saying: that from the surety as part of their damages, interest at the legal rate even if the surety would
if the bounden principal and surety shall, in all respects, duly and fully observe and perform thereby become liable to pay more than the total amount stipulated in the bond. 'The
all and singular terms and conditions in the aforementioned Letter of Credit, then this theory is that interest is allowed only by way of damages for delay upon the part of the
obligation shall be and become null and of no further force nor effect; in the contrary case, sureties in making payment after they should have done. In some states, the interest has
the same shall continue in full effect and be enforceable, as a joint and several obligation of been charged from the date of the judgment of the appellate court. In this jurisdiction,
the parties hereto in the manner provided by law so long as the account remains unpaid and we rather prefer to follow the general practice which is to order that interest begin to run
outstanding in the books of the Bank either thru non-collection, extension, renewals or plans from the date when the complaint was filed in court, . . . . '
of payment with or without consent of the surety. It is a special condition of the bond that
the liability of the surety thereon shall, at all times, be enforceable simultaneously with that of Such theory aligned with Sec. 510 of the Code of Civil Procedure which was
the principal without the necessity of having the assets of the principal resorted to, or subsequently recognized in the Rules of Court (Rule 53, Section 6) and with Article 11-
exhausted by, the creditor; Provided, however, that the liability of the surety shall he limited 08 of the Civil Code (now Art. 2209 of the New Civil Code). In other words the surety
to the sum of TWENTY-FIVE THOUSAND PESOS (P 25,000), Philippine Currency. The is made to pay interest, not by reason of the contract, but by reason of its failure to pay
promissory note executed by Lanuza Lumber became due and payable. Neither Lanuza when demanded and for having compelled the plaintiff to resort to the courts to obtain
Lumber nor Utassco paid the loan despite repeated demands by PNB for payment. payment. It should be observed that interest does not run from the time the obligation
Accordingly, PNB filed in the then Court of First Instance of Manila an action to recover the became due, but from the filing of the complaint.
amount of the promissory note with interest as provided thereon plus attorney's fees.
As to attorney's fees: Before the enactment of the New Civil Code, successful litigants
On 14 January 1971, upon motion of PNB, the trial court rendered judgment on the
pleadings. The dispositive part of the judgment reads as follows: could not recover attorney's fees as part of the damages they suffered by reason of the
litigation. Even if the party paid thousands of pesos to his lawyers, he could not charge
WHEREFORE, in the light of the foregoing considerations, judgment is hereby rendered the amount to his opponent. However, the New Civil Code permits recovery of
ordering the defendant to pay the plaintiff the sum of P 25,000.00 plus 6 % interest per attorney's fees in eleven cases enumerated in Article 2208, among them 'where the court
annum counted from May 19, 1962, the date of the filing of the original complaint until fully deem it just and equitable that attorney's fees and expenses of litigation should be
paid, plus attorney's fees equivalent to 10 % of the principal obligation and the costs of the recovered' or 'when the defendant acted in gross and evident bad faith in refusing to
suit. satisfy the plaintiffs plainly valid, just and demandable claim.' This gives the courts
discretion in apportioning attorney's fees.
On appeal, UTTASCO assailed lower court’s award of interest and attorney's fees in favor of
plaintiff-appellee PNB. (Utassco: that the trial court should not have granted interest and Now, considering, in this case, that the principal debtor had openly and expressly
attorney's fees in favor of PNB, considering the clause in the endorsement limiting the admitted his liability under the bond, and the surety knew it (p.123 R.A.) we can not say
liability of Utassco to P 25,000.00.) there was abuse of lower court's discretion in the way of awarding fees, specially when
the indemnity agreement . . . afforded the surety adequate protection. (100 Phil. 681-682.
Moreover: ART. 1956. No interest shall be due unless it has been expressly stipulated in (Emphasis supplied).
writing.ART. 2208. In the absence of stipulation, attorney's fees and expenses of litigation,
other than judicial costs, cannot be recovered, except: (. . . ) JOY ADRANEDA
Page 494 of 528

445. Del Rosario vs. CA| Vitug o l) the results secured.
G.R. No. 98149, September 26, 1994| • Given the nature of the case, the amount of damages involved, and the evident
effort exerted by petitioner's counsel, the trial court's award of attorney's fees
FACTS for P33,641.50 would appear to us to be just and reasonable.
• Petitioner suffered physical injuries, requiring two major operations, when he fell
from, and then was dragged along the asphalted road by, a passenger bus operated
by private respondent De Dios Marikina Transportation Co., Inc. The incident
occurred when the bus driver bolted forward at high speed while petitioner was still
clinging on the bus door's handle bar that caused the latter to lose his grip and
balance. The refusal of private respondent to settle petitioner's claim for damages
constrained petitioner to file, on 26 June 1985, a complaint for damages against
private respondent.
• The trial court ruled in favor of petitioner and on appeal to it, the Court of Appeals
affirmed in toto the findings of fact of the trial court, as well as the grant to petitioner
of damages, but it reduced the award for attorney's fees from P33,641.50 to
P5,000.00.
ISSUES & ARGUMENTS
W/N THE CA ERRED IN THE REDUCTION OF ATTORNEY’S FEES?
YES, THE CA ERRED IN THE REDUCTION OF ATTORNEY’S FEES

• There is no question that a court may, whenever it deems it just and equitable, allow
the recovery by the prevailing party of attorney’s fees. In determining the
reasonableness of such fees, this Court in a number of cases has provided various
criteria which, for convenient guidance, we might collate thusly:
o a) the quantity and character of the services rendered;
o b) the labor, time and trouble involved;
o c) the nature and importance of the litigation;
o d) the amount of money or the value of the property affected by the
controversy;
o e) the novelty and difficulty of questions involved;
o f) the responsibility imposed on counsel;
o g) the skill and experience called for in the performance of the
service;
o h) the professional character and social standing of the lawyer;
o i) the customary charges of the bar for similar services;
o j) the character of employment, whether casual or for establishment
client;
o k) whether the fee is absolute or contingent (it being the rule that an
attorney may properly charge a higher fee when it is contingent than
when it is absolute); and BON ARCILLA
Page 495 of 528

446. Bodiongan vs. Court of Appeals and Simeon| Puno property after the purchase; and (4) interest of 1% per month on such assessments
GR. No.- 114418, September 21, 1995| 248 SCRA 496 and taxes. If the tender is for less than the entire amount, the purchaser may justly
refuse acceptance thereof.
FACTS • In the case at bar redemption price covers the purchase price of P309,000 plus 1%
interest thereon per month for 12 months at P37,080.00. Petitioner does not claim
• Lea Simeon obtained from petitioner Estanislao Bodiongan and his wife a loan of any taxes or assessments he may have paid on the property after his purchase. He,
P219,117.39 secured by a mortgage on 3 parcels of land with a 4-storey hotel however, adds P5,000.00 to the price to cover the attorney’s fees awarded him by
building and personal properties. Upon the former’s failure to pay loan, petitioner the trial court.
instituted a civil case for collection of sum of money or foreclosure of mortgage. • In the redemption of property sold at an extrajudicial foreclosure sale, the amount
• Trial court ordered payment of the loan with legal interest as well as P5000 payable is no longer the judgment debt but the purchase price at the auction sale. In
reimbursement of plaintiff’s attorney’s fees and in case of non-payment, to foreclose other words, the attorney’s fees awarded by the trial court should not have been
the mortgage on the properties. CA affirmed. added to the redemption price because the amount payable is no longer the
• Simeon again failed to pay the judgment debt so the mortgaged properties were judgment debt, but that which is stated in Section 30 of Rule 39. The redemption
foreclosed and sold on execution to petitioner (who was the sole bidder). Petitioner price for the mortgaged properties in this case is therefore P346,080.00.
then took possession of the properties after filing a guaranty bond of P350,000. • Simeon’s tender is still short by P8,500.00. Inasmuch as tender of the redemption
• Simeon offered to redeem her properties and tendered to the provincial sheriff a price was timely made and in good faith, and the deficiency in price is not
check in the amount of P337,580 (based on sheriff’s computation). Petitioner then substantial, Simeon is given the opportunity to complete the redemption of her
filed a motion to correct the computation, which was denied. properties within 15 days from the time decision becomes final.
• Subsequently, petitioner instituted a civil case for annulment of redemption and
confirmation of the foreclosure sale on the ground of insufficiency of the Petition DENIED. Court of Appeals’ decision AFFIRMED.
redemption price. The trial court dismissed the complaint but reduced the 12%
interest rate on the purchase price to 6% and thus, on counterclaim, ordered
petitioner to refund Simeon the excess 6% plus P10,000 and P5,000 for moral
damages and attorney’s fees. CA affirmed except for the refund of the 6% interest.
ISSUES & ARGUMENTS
What is the correct redemption price?

Petitioner: The redemption price should be P351,080.00. Since private respondent
actually tendered P337,580.00 which is short by P13,500.00, this price was
inadequate thereby rendering redemption ineffectual.
DEDUCT P5,000 FROM THE P351,080.00 BEING CLAIMED BY

PETITIONER BECAUSE ATTORNEY’S FEES IS EXCLUDED FROM
REDEMPTION PRICE.
• According to Section 6 of Art 3135, the redemption price of properties at an

extrajudicial foreclosure sale is fixed by Sec 30 of Rule 39 of the Revised Rules of
Court. Said Rule provides that in order to effect a redemption, the judgment debtor
must pay the purchaser the redemption price composed of the following: (1) the
price which the purchaser paid for the property; (2) interest of 1% per month; (3)
the amount of any assessments or taxes which the purchaser may have paid on the DANI BOLONG
Page 496 of 528

447. Pimentel vs. CA | Gonzaga-Reyes standing of the lawyer, and the results secured. Pimentel further contends that
G.R. No. 117422, May 12, 1999 | Namit failed to demonstrate the circumstances showing the extent of services
rendered and that there were no specific findings of fact in the court’s decision that
FACTS would justify the award of an additional US$2,500.00 as attorney fees to private
respondent
• Pimentel through her lawyer, Atty. Laurel, filed an application for the payment of • The issue of the reasonableness of attorneys fees based on quantum meruit is a
benefits with the US Department of Labor, in connection with the death of her question of fact, and well-settled is the rule that conclusions and findings of fact by
husband, Pedro Petilla, Jr., who was a former employee in Wake Island, USA under the lower courts are entitled to great weight on appeal and will not be disturbed
the employ of Facilities Management Corporation, USA. except for strong and cogent reasons
• After the filing of the said application for payment and during its pendency, Atty. • The respondent court’s ratiocination in affirming the reasonableness of the
Laurel died and for failure of petitioner to respond to a pre-hearing statement additional compensation of US$2,500.00 awarded by the trial court properly took
requested by the US Department of Labor, the case was considered closed. into account the character and extent of the services rendered, the results secured
• Pimentel requested private respondent Namit, husband of her first cousin, to help which amounted to an award of $53,347.80, and the critical nature of counsel’s
her in reviving and pursuing her claim for death benefits before the US intervention to pursue the claims after the death of the former counsel, in justifying
Department of Labor. the award.
• Namit accepted petitioner’s request and initially wrote a letter addressed to the US • With respect to Pimentel’s contention that the respondent court erred in affirming
Department of Labor regarding petitioner’s application for death benefits, and as a the trial court’s decision awarding P10,000.00 attorney’s fees to private respondent,
result, the case was reopened we rule in favor of petitioner. The text of the trial court’s decision does not
• Trial ensued conducted by the US Embassy. The US Department of Labor mention the reason for the award of attorney’s fees and the award was simply
rendered a decision granting petitioner benefits in the amount of contained in the dispositive portion of the trial court’s decision. It is now settled
US$53,347.80. Pimentel received the lump sum award as embodied in the decision that the reasons or grounds for an award must be set forth in the decision of
and the subsequent monthly benefits in checks. the court
• Pimentel then paid private respondent the sum of US$2,500.00 as attorneys fees • Since the trial court‘s decision failed to state the justification for the award of
for the services he had rendered attorney’s fees, it was a reversible error to affirm the same
• Dissatisfied, private respondent demanded payment of the alleged balance of his
attorney’s fees but petitioner did not heed respondent’s demands
• On November 16, 1988, private respondent filed with the Regional Trial Court of
Pasay City a complaint for sum of money against petitioner to recover from the
latter the alleged balance of his attorney’s fees (according to Namit, the agreed fees
were 25%)
• RTC awarded $2.5k more to Namit plus 10k Pesos as attorney’s fees. CA affirmed.
ISSUES & ARGUMENTS
W/N the Namit is entitled to more attorney’s fees
AS TO THE $2.5K IT CAN BE AWARDED. AS TO THE P10K, SUCH HAS NO

BASIS IN THE DISPOSITIVE PORTION
• Pimentel contends that absent any agreement on attorney’s fees, the
determination of the compensation for the lawyer’s services will have to be
based on quantum meruit, such as but not limited to the extent and character
of the services rendered, the labor, time and trouble involved, the skill and
experience called for in performing the services, the professional and social GINO CAPATI
Page 497 of 528

448. Ibaan Rural Bank vs. CA| Quisimbing 1. W/N the CA may award attorney’s fees solely on the basis of the refusal of
G.R. No. 123817 December 17, 1999 |SCRA the bank to allow redemption.
• Spouses Cesar and Leonila Reyes were the owners of three (3) titled lots. Yes. The Spouses Tarnate could still redeem the land as they tendered the redemption
• The spouses mortgaged these lots to Ibaan Rural Bank, Inc. within two years.
• With the knowledge and consent of Ibaan Rural Bank, the spouses as sellers, and
Mr. and Mrs. Ramon Tarnate, as buyers, entered into a Deed of Absolute Sale with o Although there was no voluntary agreement between the parties and the
Assumption of Mortgage of the lots in question. sheriff unilaterally and arbitrarily extended the period of redemption to two
• The Spouses Tarnate failed to pay the loan and the bank extra-judicially foreclosed years, the bank may not oppose the redemption as for two years, it did not
on the mortgaged lots. object to the two-year redemption period provided in the certificate. Thus,
• The Provincial Sheriff conducted a public auction of the lots and awarded the lots to it could be said that Ibaan Rural Bank consented to the two-year
the bank, the sole bidder. redemption period specially since it had time to object and did not. When
• On December 13, 1978, the Provincial Sheriff issued a Certificate of Sale which was circumstances imply a duty to speak on the part of the person for whom
registered on October 16, 1979. The certificate stated that the redemption period an obligation is proposed, his silence can be construed as consent. By its
expires two (2) years from the registration of the sale. No notice of the extrajudicial silence and inaction, Ibaan Rural Bank misled the Spouses Tarnate to
foreclosure was given to the Spouses Tarnate. believe that they had two years within which to redeem the mortgage.
• On September 23, 1981, the Spouses Tarnate offered to redeem the foreclosed After the lapse of two years, Ibaan Rural Bank is estopped from asserting
lots and tendered the redemption amount of P77,737.45. However, Ibaan Rural that the period for redemption was only one year and that the period had
Bank refused the redemption on the ground that it had consolidated its titles over already lapsed.
the lots. The Provincial Sheriff also denied the redemption on the ground that the o Moreover, the rule on redemption is liberally interpreted in favor of the
Spouses Tarnate did not appear on the title to be the owners of the lots. original owner of a property.
• Spouses Tarnate filed a complaint to compel the bank to allow their redemption of
the foreclosed lots. No. The CA may not award attorney’s fees solely on the basis of the refusal of the bank
o The extra-judicial foreclosure was null and void for lack of valid notice and to allow redemption.
demand upon them.
o They were entitled to redeem the foreclosed lots because they offered to o The award of attorney's fees must be disallowed for lack of legal basis.
redeem and tendered the redemption price before October 16, 1981, the o Attorney's fees cannot be recovered as part of damages because of the
deadline of the 2-year redemption period. public policy that no premium should be placed on the right to litigate.
• Ibaan Rural Bank opposed the redemption. o The award of attorney's fees must be deleted where the award of moral
o There was no need of personal notice to them because under Section 3 of Act and exemplary damages are eliminated.
3135, only the posting of notice of sale at three public places of the
municipality where the properties are located was required.
o At the time they offered to redeem on September 23, 1981, the right to redeem
had prescribed, as more than one year had elapsed from the registration of the
Certificate of Sale on October 16, 1979.
• TC ruled in favor of the Spouses Tarnate awarding moral damages and attorney’s
fees. CA affirmed with modification deleting the award for moral damages and
reducing the award for attorney’s fees.
ISSUES & ARGUMENTS
W/N the Spouses Tarnate could still redeem the land as they tendered the redemption
within two years. NICO CRISOLOGO
Page 498 of 528
449 Compania Maritima Inc. vs. CA
FACTS
• Petitioner engaged the services of Atty. Consulta for 3 cases against Genstar
Container Corporation (the 2nd case technically is not a case against the said
company for it was against the sheriff of the RTC).
• Atty. Consulta billed them P100,000, P50,000, and P3M respectively for the
said cases.
• Petitioner only paid P10,000, P30,000, and none respectively though.
• Said Atty. Consulta filed for the recovery of said balance, plus damages, and
Attys. Fees.
• Petitioner alleged that the Attorney’s fees was unlawful.
ISSUES & ARGUMENTS
W/N the said fees were unlawful?
No
• There are two concepts of Atty’s fees in the jurisdiction. What is involved
here is the Atty’s fees in the ordinary sense. It is the reasonable
compensation given to a lawyer for the legal services he has
rendered.
• Generally, the said fees are based on stipulation, but in its absence the
amount is fixed on Quantum Meruit meaning the reasonable worth of his
service.
• In the said case, the amount awarded was reasonable even though the cases
were dismissed or based on compromise. We should take into account the
value of the property involved which amounted to around P51M. Not only
this, the court found that the pleadings were well researched given the
complexity of the cases, and to this, a compromise took effect whereas
both parties agreed to dismiss the said case.
JOFEE CUENCA
Page 499 of 528

Almeda vs. Carino | MENDOZA, J • Petitioners do not dispute the amount of the outstanding balance on the purchase price
G.R. No. 152143, January 13, 2003| 395 SCRA 144 of the lots. Petitioners only seek a modification of the decision of the appeals court
insofar as it upheld the trial court’s award of nominal damages, attorney’s fees, and 12%
FACTS interest.
• Ponciano L. Almeda and Avelino G. Cariño, predecessors-in-interest of petitioners and
respondents, entered into two agreements to sell, one covering eight titled propertiesand ISSUES & ARGUMENTS
another three untitled properties all of which are located in Biñan, Laguna. • W/N the CA erred when it awarded nominal damages and atty’s fees
• The agreed price of the eight titled properties was P1,743,800.00, 20% of which was to
be paid upon signing of the agreement and the balance to be paid in four equal semi-
annual installments, beginning six months from the signing thereof, with the balance HOLDING & RATIO DECIDENDI
earning 12% interest per annum.
• On April 3, 1982, Cariño and Almeda executed an amendment to their agreements to NO.
sell extending the deadline for the production of the titles to the untitled properties from
March 31, 1982 to June 30, 1982
Indeed, nominal damages may be awarded to a plaintiff whose right has been violated or
• Before the end of April 1982, Almeda asked Cariño for the execution of a Deed of
invaded by the defendant, for the purpose of vindicating or recognizing that right, and
Absolute Sale over the eight titled properties although they had not been fully paid.
• Cariño granted the request and executed on May 3, 1982 the deed of sale over the eight not for indemnifying the plaintiff for any loss suffered by him. Its award is thus not for
titled lots in favor of Almeda, Inc. On April 30, 1982, Almeda executed an undertaking the purpose of indemnification for a loss but for the recognition and vindication of a
to pay Cariño the balance of the purchase price. right
• Cariño made demands for the full and final payment of the balance due him but since
these were unheeded, a complaint was filed against Almeda and Almeda, Inc., in whose Petitioners have an unpaid balance on the purchase price of lots sold to them by
name the titles to the properties had been transferred. respondents. Their refusal to pay the remaining balance of the purchase price despite
• Almeda and Almeda, Inc. contended that the purchase price, including interest charges, repeated demands, even after they had sold the properties to third parties, undoubtedly
of the eight titled properties had been fully paid as of April 3, 1982. With respect to the constitutes a violation of respondents’ right
three untitled lots, they contended that the purchase price been fully paid except for the
3rd lot which had a remaining balance of P167,522.70. Nor is there any basis for petitioners’ claim that the appellate court erred in awarding
• RTC of Biñan, Laguna found the claim of Cariño to be well founded and gave judgment attorney’s fees in favor of respondents. Under the Civil Code, attorney’s fees and
in his favor litigation expenses can be recovered in cases where the court deems it just and equitable.
• Without questioning the amount of judgment debt for which they were held liable, Thus, there is no reason to set aside the order of the trial court, as affirmed by the
Ponciano Almeda and Almeda, Inc. appealed to the Court of Appeals for a modification appeals court, granting to respondents attorney’s fees in the amount of P15,000.00.
of judgment, contending that the lower court erred in awarding nominal damages and
attorney’s fees in favor of Cariño and imposing a 12% annual interest on the judgment Further, the case has dragged on for more than a decade. While the records reveal that
debt from the time of demand on March 9, 1983 until it was fully paid. respondents engaged the services of two lawyers, petitioners had a total of sixteen
• They maintained that they were not guilty of any unfair treatment or reckless and counsels starting from January 24, 1984 up to December 22, 1997. Of the sixteen, one
malevolent actions so as to justify an award of nominal damages. They claimed that they
lawyer served for more than 2 years, another for 8 days only, and still another entered his
refused to pay the remaining balance because the proceeds of certain harvests from the
appearance and withdrew it only to re-enter his appearance after some time. The records
lands in question and liquidated damages were also due them.
• As for the award of attorney’s fees, they contended that there was no finding that they show that most of the lawyers who entered their appearances either filed only motions to
acted in gross and evident bad faith in refusing to satisfy Cariño’s demand so as to justify cancel hearings or motions for postponements, claiming to have misplaced the calendar
its award under Art. 2208 (5) of the Civil Code, because they had acted on the basis of of court hearings or to be staying abroad.
what they honestly believed to be correct as their residual obligations.
• During the pendency of the case, Almeda died and he was substituted by his heirs. These unduly delayed the disposition of the case in violation of the right of respondents
• The Court of Appeals affirmed the decision of the lower court. It held that the award of to claim what is rightfully due them. This fact further justifies the award of nominal
nominal damages was justified by the unjust refusal of Almeda and Almeda, Inc. to settle damages and supports the grant of attorney’s fees.
and pay the balance of the purchase price in violation of the rights of Cariño. The award
of attorney’s fees was also affirmed, it being shown that Cariño was forced to litigate to
protect his interests. TIN DINO
Page 500 of 528
451. Concept Placement Resources, Inc. vs. Funk | Sandoval-Gutierrez, J. • Thus, respondent filed with the Court of Appeals a petition for review ascribing to
G.R. No. 137680, February 6, 2004 | 422 SCRA 317 the RTC the following errors: (1) in reversing the MTC Decision on the ground of
res judicata; and (2) in disregarding the compulsory counterclaim as basis for
FACTS respondent’s action for attorney’s fees.
• On June 25, 1994, Concept Placement Resources, Inc., petitioner, engaged the legal • In due course, the Court of Appeals promulgated its Decision4 dated February 18,
services of Atty. Richard V. Funk, respondent. 1999 reversing the assailed RTC Decision and affirming the MTC Decision, thereby
• On July 1, 1994, the parties executed a retainer contract wherein they agreed that sustaining the award to respondent of his attorney’s fees in the amount of
respondent will be paid regular retainer fee for various legal services, except P50,000.00.
litigation, quasi-judicial and administrative proceedings and similar actions. In these
services, there will be separate billings. ISSUES & ARGUMENTS
• Meanwhile, one Isidro A. Felosopo filed with the Philippine Overseas Employment
Administration (POEA) a complaint for illegal dismissal against petitioner, docketed W/N respondent is entitled to attorney’s fees for assisting petitioner as counsel in the
as POEA Case No. 94-08-2370. Petitioner referred this labor case to respondent for labor case.
legal action.
• Immediately, respondent, as counsel for petitioner, filed with the POEA its answer HOLDING & RATIO DECIDENDI
with counterclaim for P30,000.00 as damages and P60,000.00 as attorney’s fees. While it is true that the retainer contract between the parties expired during the pendency
• On March 1, 1995, while the labor case was still pending, petitioner terminated its of the said labor case, it does not follow that petitioner has no more obligation to pay
retainer agreement with respondent. Nevertheless, respondent continued handling respondent his attorney’s fees. The Court of Appeals found that petitioner engaged the
the case. legal services of respondent and agreed to pay him accordingly, thus:
• On October 30, 1995, the POEA rendered a Decision dismissing Felosopo’s "Anent the first issue, the Petitioner resolutely avers that he and the Private
complaint with prejudice. The POEA, however, failed to rule on petitioner’s Respondent had agreed on the latter paying him the amount of P60,000.00 by
counterclaim for damages and attorney’s fees. Thereafter, the Decision became final way of attorney’s fees for his professional services as its counsel in POEA Case
and executory. No. 94-08-2370 the Petitioner relying on his ‘Retainer Agreement’ in tandem with
• On December 8, 1995, respondent advised petitioner of the POEA’s favorable the ‘Compulsory Counterclaim’ of the Private Respondent to the complaint of
Decision and requested payment of his attorney’s fees. Isidro Felosopo.
• In reply, petitioner rejected respondent’s request for the following reasons: (1) the "We agree with the Petitioner’s pose. It bears stressing that the ‘Retainer
retainer agreement was terminated as early as March 1995; (2) there is no separate Agreement’ of the Petitioner and the Private Respondent (Exhibit ‘A’) envisaged
agreement for the handling of the labor case; and (3) the POEA did not rule on two (2) species of professional services of the Petitioner, namely, those
petitioner’s counterclaim for attorney’s fees. This prompted respondent to file with professional services covered by the regular retainer fee and those covered by
the Metropolitan Trial Court (MTC), Branch 67, Makati City a complaint for sum of separate billings. Petitioner’s services not covered by the regular retainer fee
money (attorney’s fees) and damages against petitioner, docketed as Civil Case No. and, hence, subject to separate billing include:
51552. ‘x x x
• During the pre-trial on September 3, 1996, the MTC, upon respondent’s motion, 5. Services not covered by the regular retainer fee and therefore, subject to separate
declared petitioner as in default. Its motion for reconsideration was denied in an billing:
Order dated September 13, 1996. Forthwith, respondent was allowed to present his a) litigation, quasi-judicial proceedings, administrative investigation,
evidence ex-parte. and similar proceedings legal in nature;
• On October 27, 1996, the MTC rendered a Decision2 ordering petitioner to pay x x x’
respondent P50,000.00 as attorney’s fees. "x x x While admittedly, the Petitioner and the Private Respondent did not
• On appeal, the Regional Trial Court (RTC), Branch 137, Makati City, reversed the execute a written agreement on Petitioner’s fees in said case apart from the
MTC Decision, holding inter alia that since the MTC, in the same Decision, did not ‘Retainer Agreement’, however, the Private Respondent did categorically and
resolve petitioner’s counterclaim for attorney’s fees, which constitutes res judicata, unequivocally admit in its ‘Compulsory Counterclaim’ embodied in its Answer to
respondent is not entitled thereto. the Complaint, in POEA Case No. 94-08-2370, that it engaged the services of
• Respondent filed a motion for reconsideration but was denied by the RTC in an the Petitioner as its counsel ‘For a fee in the amount of P60,000.00, Etc.’:
Order3 dated December 29, 1997. ‘COMPULSORY COUNTERCLAIM
Page 501 of 528

1. Respondent reproduces herein by reference all the material allegations in the
foregoing Answer.
2. As shown by the allegation in the Answer the complaint is factually and legally
unfounded. To defend itself against this baseless suit, respondent suffered and
continues to suffer actual damage in the amount of P30,000.00 and was compelled
to hire the services of counsel for a fee in the amount of P60,000.00 plus
P1,500.00 honorarium per appearance and litigation expenses in the amount of
not less than P10,000.00 plus cost of
3. suit." (Exhibit ‘B-1’: underscoring supplied)
Significantly, in German Marine Agencies, Inc. vs. NLRC,8 we held that there must always be
a factual basis for the award of attorney’s fees. Here, since petitioner agreed to be
represented by respondent as counsel in the labor case and to pay him his attorney’s fees,
it must abide with its agreement which has the force of law between them.9
We observe, however, that respondent did not encounter difficulty in representing
petitioner. The complaint against it was dismissed with prejudice. All that respondent did
was to prepare the answer with counterclaim and possibly petitioner’s position paper.
Considering respondent’s limited legal services and the case involved is not complicated,
the award of P50,000.00 as attorney’s fees is a bit excessive. In First Metro Investment
Corporation vs. Este del Sol Mountain Reserve, Inc.,10 we ruled that courts are empowered to
reduce the amount of attorney’s fees if the same is iniquitous or unconscionable. Under
the circumstances obtaining in this case, we consider the amount of P20,000.00
reasonable.
JAY DUHAYLONGSOD
Page 502 of 528

452. Cortes vs. Court of Appeals | Austria-Martinez o Sec 24. Compensation of attorneys – An attorney shall be entitled to have
G.R. No. 121772, January 13, 2003, 395 SCRA 33 and recover from his client no more than a reasonable compensation for
his services, with a view to the importance of the subject matter of the
FACTS controversy, the extent of the services rendered, and the professional
standing of the attorney. xxx”
• F.S. Management and Development Corporation (FSMDC) filed a case for specific • Rule 20.1, Canon 20 of the Code of Professional Responsibility serves as a guideline
performance against spouses Edmundo and Elnora Cortes involving the sale of the in fixing a reasonable compensation for services rendered by a lawyer on the basis of
parcel of land owned by the said spouses. quantum meruit:
• Spouses Cortes retained the professional services of Atty. Felix Moya for the o Time spent and extent of services rendered;
purpose of representing them in said case. However, they did not agree on the o Novelty and difficulty of the questions involved;
amount of compensation for the services to be rendered by Atty. Moya. o Importance of subject matter;
• Before a full-blown trial could be had, defendant spouses Cortes and plaintiff o Skill demanded;
FSMDC decided to enter into a compromise agreement. o Probability of losing other employment as a result of acceptance of the
• Petitioner spouses Cortes received from FSMDC, three checks totaling P2,754,340 proffered case;
which represents the remaining balance of the purchase price of the subject land. o Customary charges for similar services and the schedule of fees of the IBP
• Atty. Moya filed an “Urgent Motion to Fix Attorney’s Fees” praying that he be paid chapter to which he belongs;
a sum equivalent to 35% of the amount received by the defendants, which the latter o Amount involved in the controversy and the benefits resulting to the client
opposed for being excessive. from the services;
• The Cortes spouses and Atty. Moya settled their differences by agreeing in open o Contingency or certainty of compensation;
court that the former will pay the latter the amount of P100,000 as his attorney’s o Character of employment, whether occasional or established;
fees. o Professional standing of lawyer.
• The trial court issued an order that the parties agreed that the Cortes spouses would • Aside from invoking his professional standing, Atty. Moya claims that he was the
pay P100,000 out of any check paid by FSMDC to them. one responsible in forging the initial compromise agreement with FSMDC. The fact
• Cortes spouses terminated the services of Atty. Moya and retained the services of remains, however, that such agreement was not consummated because the checks
another lawyer. given by FSMDC were all dishonored. Hence, it was not him who was responsible
• Atty. Moya filed a “Motion for Early Resolution of Pending Incidents and to Order in bringing into fruition the subsequent compromise agreement between petitioners
Defendants to Pay Their Previous Counsel.” and FSMDC.
• The trial court issued an order directing the petitioners to pay Atty. Moya P100,000 • Nonetheless, it is undisputed that Atty. Moya has rendered services as counsel for
as attorney’s fees. the petitioners. He prepared petitioners’ Answer and Pre-trial brief, appeared at the
Pre-trial conference, attended a hearing, cross-examined a witness, and was present
ISSUES & ARGUMENTS in the conference between the parties. All of which were rendered during 1990-
1991, where the value of the peso was higher.
W/N the amount of P100,000 awarded to Atty. Moya as attorney’s fees is • Thus, the sum of P100,000 as attorney’s fees is disproportionate to the services
reasonable? rendered by him.
• The amount of P50,000 is just and reasonable.
HOLDING & RATIO DECIDENDI • Imposition of legal interest on amount payable is unwarranted because contracts for
attorney’s services are different from contracts for the payment of compensation for
NO. THE REASONABLENESS OF THE AMOUNT OF ATTORNEY’S FEES any other services.
SHOULD BE GAUGED ON THE BASIS OF THE LONG-STANDING RULE
OF QUANTUM MERUIT.
• Quantum meruit means “as much as he deserves.” FRANCIS ESPIRITU
• Where a lawyer is employed without agreement as to the amount to be paid for his
services, the courts shall fix the amount on quantum meruit basis.
• In such case, he would be entitled to receive what he merits of his services.
• Sec. 24, Rule 138 of the Rules of Court provides:
Page 503 of 528
453. Smith Kline Beckman v. Court of Appeals | Carpio-Morales • In the same vein, the SC did not sustain the grant by the appellate court of
G.R. No. 126627 August 14, 2003| attorney’s fees to private respondent anchored on Article 2208 (2) of the Civil Code,
respondent having been allegedly forced to litigate as a result of petitioner’s suit.
FACTS Even if a claimant is compelled to litigate with third persons or to incur expenses to
• In 1976, Petitioner Smith Kline applied for a patent over an invention entitled protect its rights, still attorney’s fees may not be awarded where no sufficient
“Methods and Compositions for Producing Biphasic Parasiticide Activity Using showing of bad faith could be reflected in a party’s persistence in a case other than
Methyl 5 Propylthio-2-Benzimidazole Carbamate” and such patent was granted. The an erroneous conviction of the righteousness of his cause. There exists no evidence
invented medicine is used in fighting infections caused by gastrointestinal parasites on record indicating that petitioner was moved by malice in suing respondent.
and lungworms in animals such as swine, sheep, cattle, goats, horses, and even pet • This Court, however, grants private respondent temperate or moderate damages in
animals. the amount of P20,000.00 which it finds reasonable under the circumstances, it
• Private Respondent Tryco Pharma is a domestic corporation that manufactures, having suffered some pecuniary loss the amount of which cannot, from the nature
distributes and sells veterinary products including Impregon, a drug that has of the case, be established with certainty.
Albendazole for its active ingredient and is claimed to be effective against gastro-
intestinal roundworms, lungworms, tapeworms and fluke infestation in carabaos,
cattle and goats.
• Petitioner then sued respondent for unfair competition saying that Impregon
infringes on their patent. As a result, an injunction was issued against respondent for
it to stop selling Impregon to stop its acts of patent infringement and unfair
competition. Respondent filed a counterclaim for actual damages and attorney’s
fees.
• RTC ruled in favor of respondent, awarding damages and attorney’s fees to
respondent. CA affirmed.
ISSUES & ARGUMENTS

• Issue 1: IP-related, not important in our discussion.
• Issue 2: W/N the award of actual damages and attorney’s fees are proper.
NO, THE AWARD FOR BOTH ACTUAL DAMAGES AND ATTORNEY’S

FEES ARE NOT PROPER.
• The claimed actual damages of P330,000.00 representing lost profits or revenues
incurred by respondent as a result of the issuance of the injunction against it,
computed at the rate of 30% of its alleged P100,000.00 monthly gross sales for
eleven months, were supported by the testimonies of respondent’s President and
Executive Vice-President that the average monthly sale of Impregon was
P100,000.00 and that sales plummeted to zero after the issuance of the injunction.
While indemnification for actual or compensatory damages covers not only the loss
suffered (damnum emergens) but also profits which the obligee failed to obtain (lucrum
cessans or ganacias frustradas), it is necessary to prove the actual amount of damages
with a reasonable degree of certainty based on competent proof and on the best
evidence obtainable by the injured party. The testimonies of respondent’s officers
are not the competent proof or best evidence obtainable to establish its right to JOHN. FADRIGO
actual or compensatory damages for such damages also require presentation of
documentary evidence to substantiate a claim therefor.
Page 504 of 528
454. Reyes vs. CA| Ynares - Santiago o Extraordinary – indemnity for damages ordered by the court to be paid by
G.R. No. 154448. August 15, 2003| 409 SCRA 267 the losing party in a litigation. The instances where these may be awarded
are enumerated in par 7 of Art 2208 of the Civil Code which pertains to
FACTS actions for recovery of wages, NOT payable to the lawyer but to the client.
• Although an express finding of facts and law is still necessary to prove the merit of
• In 1989, Leong Hup Poultry Farms of Malaysia thru its director Francis Lau, the award, there need not be any showing that the employer acted maliciously or in
appointed Pedrito Reyes (reyes) as Technical/Sales Manager w/ a net salary of bad faith when it withheld the wages. There need only be a showing that the lawful
$4,500. wages were not paid accordingly, as in this case.
• In 1992, the company formed Phil Malay Poultry Breeders (PhilMalay) and • Petitioner is entitled to attorney’s fees equivalent to 10% of his total monetary
appointed Reyes as General Manager w/ monthly salary of $5,500. award.
• In 1996-97, the company experienced losses and retrenched some of its employees.
Reyes gave a verbal notice then a letter expressing his intention to resign and
requesting that he be granted the same benefits as the retrenched employees.
• In 1998, PhilMalay retrenched Reyes and promised to pay him separation benefits
pursuant to the Labor Code.
• But he was offered separation pay equivalent only to 4 months which he refused.
• Reyes filed the NLRC a complaint for non-payment of benefits.
• The Labor Arbiter ruled in his favour and granted him: unpaid salary, underpayment
of salary, 13th month pay, unused vacation and sick leaves, separation pay, brand
new car, office rentals, life insurance policy, services of a lawfirm, moral damages,
exemplary damages, and attorney’s fees.
• The NLRC modified the decision by deleting the unpaid salary, vacation and sick
leaves, separation pay, moral damages, exemplary damages, and attorney’s fees.
• CA dismissed the petition due to failure to attach documents to the petition.
ISSUES & ARGUMENTS

W/N NLRC properly deleted the monetary awards?
YES, with respect to:

• Unpaid Salary – no proof Reyes worked during those times.
• Moral/Exemplary Damages – no basis, respondents not shown to have acted in bad
faith.
• Car and life insurance – only granted during the employment of the employee.
• Rental – contractual obligation, not based of EER therefore not within the
jurisdiction of the Labor Arbiter. Regular courts have jurisdiction.
• Reimbursement for the services of a law firm – no proof that the services of a law
firm was needed and that he spent 200K as a consequence.
NO, with respect to vacation / sick leave and Attorney’s Fees.

• 2 concepts of Atty’s Fees:
o Ordinary – reasonable compensation paid to a lawyer by his client for the
legal services. The basis is the fact of his employment.
PAT FERNANDEZ
Page 505 of 528

455. Malaysian Airline System Bernand V. CA We affirm the factual findings of the respondent court and the lower court, there
G.R. 78015 December 11, 1987 being no sufficient showing that the said courts committed reversible error in reaching
such conclusions.
FACTS We cannot agree, however, with the award of damages, which seems to have gotten
out of hand. The inordinate amount granted to the private respondent cans for the
The petitioner recruited the private respondent from Philippine Airlines for his moderating hand of the Court, that justice may be tempered with reason instead of being
training and experience and contracted his services as pilot for two years, beginning tainted with what appears here to be a ruthless vindictiveness.
1979. On April 12, 1981, when the plane he was driving landed at Bintulo Airport, all the The complaint prayed for payment of unpaid salaries from July 1981 to July 1982
tires burst, causing alarm among the passengers but, fortunately, no injuries. An which corresponds to the periods of the renewed contract. 15 On the basis of his
investigation was conducted pending which he was preventively suspended. On May 5, monthly salary of Malaysian $4,025.00, 16 or P33,568.50 (at the current Central Bank
1981, he was offered and accepted an extension of his contract for another year, subject conversion rate of P8.34 for every Malaysian $1.00), Ms total unearned salaries will be
to the expressed condition that he would submit to the jurisdiction of Malaysian courts P402,822.00. To this should be added the amount of P123,098.40 as allowance for the
in an matters relating to the contract. Ultimately, however, he was found negligent by the same period of one year at the rate of $1,230.00 per month 17 plus P80,000.00,
investigating board and dismissed by the petitioner, effective July 30, 1981. representing his expenses in transferring his family to the Philippines, 18 amounting to
an aggregate sum of P605,920.40 in actual damages. The moral and exemplary damages,
The private respondent sought relief from the Malaysian courts but to no avail. He while concededly due, are reduced to P500,000.00 and the attorney's fees to the fixed
then brought suit in the regional trial court of Manila where the petitioner moved to sum of P25,000.00. All the other awards are disauthorized.
dismiss for lack of jurisdiction and improper venue. The order of the trial court denying It is important to reiterate the following observations we made in Baranda v.
its motion was affirmed by the Court of Appeals and later by this Court. The case then Baranda:
proceeded to trial on the merits. After hearing, it was held that the private respondent We deal with one final matter that should be cause for serious concern as it has
was not guilty of negligence and that the accident was due not to his violation of the a direct relevance to the faith of our people in the administration of justice in
MAS manual of instructions but to a defect in the rigging of the brake control valve and this country. It is noted with disapproval that the respondent court awarded the
the failure of the ground crew to properly maintain the aircraft. The court also found total indemnity of P120,000.00, including attorney's fees and litigation expenses
that the petitioner had acted in bad faith in inveigling the private respondent into signing that were double the amounts claimed and exemplary damages which were not
the renewal of the contract submitting himself to the jurisdiction of the Malaysian courts even prayed for by the private respondents. Such improvident generosity is
and that his dismissal was prompted by a letter-complaint signed by Filipino and likely to raise eyebrows, if not outright challenge to the motives of some of our
Indonesian pilots, including himself, protesting their discrimination in pay and benefits courts, and should therefore be scrupulously avoided at all times, in the interest
by MAS. The trial court required the petitioner to pay as follows: of maintaining popular confidence in the judiciary. We therefore caution against
a similar recklessness in the future and call on an members of the bench to take
1. The amount of $300,000 Malaysian dollars representing plaintiffs' salary and flight proper heed of this admonition.
type and P100,000.00 for uprooting his family to Manila plus the further sum of The respondent court affirmed the original award of damages in the staggering
P200,000.00 representing renewal of his license; amount of more than P8,000,000.00. It is only fair that it be lowered to a realistic and
2. The amount of P3,000,000.00 as moral damages; judicious level that will, in our view, be just to both the petitioner and the private
3. The amount of Pl,000,000.00 as exemplary damages; respondent.
4. The amount equivalent to 25% of the amount due and collectible as attorney's WHEREFORE, the petition is DENIED and the challenged decision, as above
fees, and cost of suit. modified, is affirmed. It is so ordered.
ISSUES & ARGUMENTS
Whether or not the amounts of damages awarded were excessive?
Yes. J.C. LERIT
Page 506 of 528

456 Far East Bank and Trust Co. v. CA | Vitug and analogous cases: (1) A criminal offense resulting in physical injuries; (2) Quasi-
G.R. No. 108164 February 23, 1995 | 241 SCRA 671 delicts causing physical injuries;
• It is true that the bank was remiss in indeed neglecting to personally inform Luis of
FACTS his own card's cancellation. Nothing however, can sufficiently indicate any deliberate
• In October 1986 Luis Luna applied for a FAREASTCARD with Fart East Bank. A intent on the part of the Bank to cause harm to private respondents. Neither could
supplemental card was also issued to his wife, Clarita the bank’s negligence in failing to give personal notice to Luis be considered so
• On August 1988, Clarita lost her card and promptly informed the bank of its loss gross as to amount to malice or bad faith.
for which she submitted an Affidavit of Loss. The bank recorded this loss and gave • Malice or bad faith implies a conscious and intentional design to do a wrongful act
the credit card account a status of “Hot Card” and/or “Cancelled Card.” Such for a dishonest purpose or moral obliquity; it is different from the negative idea of
record holds also for the principal card holder until such time that the lost card was negligence in that malice or bad faith contemplates a state of mind affirmatively
replaced. operating with furtive design or ill will.
• On October 1988, Luis Luna used his card to purchase a despidida lunch for hi
friend in the Bahia Rooftop Restaurant. His card was dishonored in the restaurant • Nominal damages were awarded because of the simple fact that the bank failed to
and he was forced to pay in cash, amounting to almost P600.00. He felt embarrassed notify Mr. Luna, thus entitle him to recover a measure of damages sanctioned under
by this incident. Article 2221 of the Civil Code providing thusly:
• He then complained to Far East Bank and he found out that his account has been o Art. 2221. Nominal damages are adjudicated in order that a right of the
cancelled without informing him. Bank security policy is to tag the card as hostile plaintiff, which has been violated or invaded by the defendant, may be
when it is reported lost, however, the bank failed to inform him and an overzealous vindicated or recognized, and not for the purpose of indemnifying the
employee failed to consider that it was the cardholder himself presenting the credit plaintiff for any loss suffered by him.
card.
• The bank sent an apology letter to Mr. Luna and to the Manager of the Bahia
Rooftop Restaurant to assure that Mr Luna was a very valuable client.
• Spouses Luna still felt aggrieved and thus filed this case for damages against Far
East Bank.
• Far East Bank was adjudged to pay the following: (a) P300,000.00 moral damages;
(b) P50,000.00 exemplary damages; and (c) P20,000.00 attorney's fees.
ISSUES & ARGUMENTS

• W/N Far East Bank is liable for damages to the Spouses Luna amounting
the above-mentioned figures?
o Petitioner-Appellant: Far East contends that the amounts to be paid to
the spouses are excessive. They argue that they should not be paying moral
damages because there was no bad faith on their part in breaching their
contract.
o Respondent-Appellee: Mr. Luna contends that he was embarrassed by
the situation which was caused by the bank’s failure to inform him of the
cancellation of his card. thus, he is entitled to damages.
SPOUSES LUNA ARE ENTITLED ONLY TO NOMINAL DAMAGES BUT

NOT MORAL AND EXEMPLARY DAMAGES.
• Moral damages are awarded if the defendant is to be shown to have acted in bad
faith. Article 2219 states that, “Moral damages may be recovered in the following MIK MALANG
Page 507 of 528

457. Bricktown Development Corp et al vs. Amor Tierra Devt Corporation |Vitug NO. FORFEITURE BY BRICKTOWN IS UNCONSCIONABLE however,
G.R. No. 112182 December 12, 1994| 239 SCRA 126 interest payment must be counted from finality of judgment (not from judicial
demand)
FACTS • While we must conclude that Bricktown still acted within its legal right to
declare the contracts to sell rescinded, considering, nevertheless, the peculiar
• Bricktown, through its President, Mariano Velarde, entered into a CONTRACT circumstances: of the parties continued negotiation despite Amor’s
TO SELL residential lots at Multinational Village, Parañaque (covering 82, 888 suspension of payments, it would be unconscionable to sanction the
sq.m., amounting to P21, 639,875.00) to Amor Tierra . forfeiture by petitioner corporation of payments made to it by private
• PAYMENT SCHEME: respondent.
o Mar 31 1981: DP of P2.2 M • The relationship between parties in any contract must always be characterized
o June 30: P3,209,968.75 and punctuated by good faith and fair dealing. Judging from what the courts
o December 31: P4,729,906.25 below have said, Bricktown did fall well behind that standard. We do not find
o Balance of 11.5 M by paying mortgage to PSBank or pay it in cash. it equitable, however, to adjudge any interest payment by Bricktown on
• Subsequently, the parties executed a Supplemental Agreement: where Amor the amount to be refunded, to be computed from judicial demand.
Tierra will pay 21% interest on the balance of the DP and pay P390, 369.37 for the o BECAUSE: Amor Tierra should not be allowed to totally free
interest paid by Bricktown to update bank loan with PS Bank for the period of Feb- itself from its own breach.
Mar 1981.
• Amor Tierra was only able to pay 1.334M, however the parties continued to Simply put: The SC held that forfeiture was unconscionable because the Bricktown lead Amor Tierra
negotiate despite suspension of further payments by Amor Tierra. to believe that there will be a new arrangement as a result of their continued negotiation. On the other
• Later, Bricktown sent a Notice of Cancellation for failure to pay the June 30 hand, since Amor Tierra even barely covered to pay the complete DP, thus committing a breach of the K
installment by Amor; Bricktown advised the latter that non-payment 30D from to Sell, the interest on the refund was mitigated/reduced by its imposition ONLY from the finality of the
receipt id the notice will result to the actual cancellation of K to Sell. judgment of rescission of K to Sell, and not from the time of judicial demand of the refund.
• Months later, instead of paying, Amor demanded a refund of the total payments of
2.455M + interest or an assignment of unencumbered residential lots corresponding WHEREFORE, the appealed decision is AFFIRMED insofar as it declares
to the amount already paid. Unheeded, Amore filed suit against Bricktown. valid the cancellation of the contracts in question but MODIFIED by ordering
• RTC: K to Sell and Supplemental Agreement are rescinded; return payments of the refund by petitioner corporation of P1,334,443.21 with 12% interest per
Amor with 12% from judicial demand/the time complaint was filed; atty’s fees of annum to commence only, however, from the date of finality of this decision
25K to Amor. until such refund is effected.
• CA: affirmed RTC.
ISSUES & ARGUMENTS
1. W/N the contracts to sell were validly rescinded or cancelled by Bricktown

(TORTS RELATED) W/N the amounts already remitted by Amor Tierra under said
contracts were rightly forfeited by Bricktown
VALIDLY RESCINDED K to SELL

• The cancellation of the contracts to sell by Bricktown accords with the
contractual covenants of the parties, and such cancellation must be respected. It
may be noteworthy to add that in a contract to sell, the non-payment of the
purchase price (which is normally the condition for the final sale) can prevent
the obligation to convey title from acquiring any obligatory force. DIANE LIPANA
Page 508 of 528

458. International School v. CA | Gonzaga-Reyes supersedeas bond inasmuch as the lower court granted the execution pending appeal
G.R. No. 131109 June 29, 1999| 309 SCRA 474 and rejected its offer of supersedeas bond.
• Radio Communications of the Philippines, Inc. (RCPI) vs. Lantin, et al.; The execution of
FACTS any award for moral and exemplary damages is dependent on the outcome of the
main case. Unlike the actual damages for which the petitioners may clearly be held
• The son of Spouses Torralba died in the custody of International School Manila liable if they breach a specific contract and the amounts of which are fixed and
(ISM). The courts awarded the following amount in damages to the spouses: 1) certain, liabilities with respect to moral and exemplary damages as well as the exact
Moral Damages – P4M; 2) Exemplary Damages – P1M; 3) Actual Damages – P2M, amounts remain uncertain and indefinite pending resolution by the Intermediate
and 4) Attorney’s fees – P300K. Appellate Court and eventually the Supreme Court. The existence of the factual
• ISM appealed to the Court of Appeals. During the pendency of the appeal, the bases of these types of damages and their causal relation to the petitioners' act will
spouses Torralba filed a motion for execution pending appeal before the lower court have to be determined in the light of errors on appeal. It is possible that the
on the grounds that the appeal is merely dilatory and that the filing of a bond is petitioners, after all, while liable for actual damages may not be liable for moral and
another good reason for the execution of a judgment pending appeal. The lower exemplary damages. Or as in some cases elevated to the Supreme Court, the awards
court granted the execution pending upon the posting of a bond in the amount of may be reduced.
Five Million Pesos (P5,000,000.00) by the spouses Torralba.
• The court then issued a Notice of Garnishment to Citibank (which was Citibank).
Citibank complied and held that P5.5M. The court then ordered the release of this
amount in favor of the spouses Torralba.
• ISM then filed a motion for reconsideration or approval of supersedeas bond so that
the amount cannot be turned over to the spouses.
ISSUES & ARGUMENTS
W/N the grant of the writ of execution was valid.

o Petitioner: IS claims that there is no good reason to grant the writ of
executing, citing Ong v. CA, saying that the reason given is that the appeal
is frivolous and dilatory is not a reason to justify the approval of an
execution pending appeal.
o Respondent: The spouses argue that ISM virtually admitted that the
appeal appears to be dilatory and that it adopted the project “Code Red:
consisting of safety and emergency measure only after the death of their
son, and that the delay has already affected them financially.
THE WRIT OF EXECUTION IS NOT VALID. THE MERE FILING OF A BONG

BY THE DEFENDANT IS NOT A GOOD REASON FOR ORDERING
EXECUTION PENDING APPEAL.
• A combination of circumstances is the dominant consideration which impels the
grant of immediate execution, the requirement of a bond is imposed merely as an
additional factor, no doubt for the protection of the defendant's creditor. Since we
have already ruled that the reason that an appeal is dilatory does not justify
execution pending appeal, neither does the filing of a bond, without anything more,
justify the same. Moreover, ISM could not be faulted for its withdrawal of its
MIK MALANG
Page 509 of 528

459. Teodoro Banas et. al., vs. Asia Pacific Finance |Bellosillo THEY CAN BE HELD LIABLE UNDER THE SAID DOCUMENTS BUT
G.R. No. 128703, October 18, 2000 | 343 SCRA 527 THE COURT MITIGATED THE AMOUNT OF DAMAGES AS IT WAS
SHOWN THAT THERE WAS A PARTIAL COMPLIANCE ON THEIR PART
FACTS • Indubitably, what is prohibited by law is for investment companies to lend funds
obtained from the public through receipts of deposit, which is a function of banking
• Sometime in August 1980, Bañas executed a Promissory Note in favor of C. G. institutions. But here, the funds supposedly "lent" to petitioners have not been
Dizon Construction whereby for value received he promised to pay to the order of shown to have been obtained from the public by way of deposits, hence, the
C. G. Dizon Construction the sum of P390,000.00 in installments of "P32,500.00 inapplicability of banking laws
every 25th day of the month starting from September 25, 1980 up to August 25, • On their submission that the true intention of the parties was to enter into a
1981" contract of loan, the Court examined the Promissory Note and failed to discern
• Later, C. G. Dizon Construction endorsed with recourse the Promissory Note to anything therein that would support such theory. On the contrary, the terms and
Asia Pacific Finance Corporation (Asia Pacific), and to secure its payment, it, conditions of the instrument clear, free from any ambiguity, and expressive of the
through its corporate officers, Dizon, President, executed a Deed of Chattel real intent and agreement of the parties. Likewise, the Deed of Chattel Mortgage and
Mortgage covering three (3) heavy equipment units of Caterpillar Bulldozer Crawler Continuing Undertaking were duly acknowledged before a notary public and, as
Tractors in favor of Asia Pacific. Dizon also executed a Continuing Undertaking such, have in their favor the presumption of regularity. To contradict them there
wherein he bound himself to pay the obligation jointly and severally with C. G. must be clear, convincing and more than merely preponderant evidence. In the
Dizon Construction instant case, the records do not show even a preponderance of evidence in their
• In compliance with the provisions of the Promissory Note, C. G. Dizon favor that the Deed of Chattel Mortgage and Continuing Undertaking were never
Construction made the installment payments to Asia Pacific totaling P130,000, but intended by the parties to be legal, valid and binding
thereafter defaulted in the payment of the remaining installments, prompting Asia • With regard to the computation of their liability, the records show that they actually
Pacific to send a Statement of Account to Dizon for the unpaid balance. As the paid a total sum of P130,000.00 in addition to the P180,000.00 proceeds realized
demand was unheeded, Asia Pacific sued Bañas, C. G. Dizon Construction and from the sale of the bulldozer crawler tractors at public auction. Deducting these
Dizon amounts from the principal obligation of P390,000.00 leaves a balance of
• While they admitted the genuineness and due execution of the Promissory Note, the P80,000.00, to which must be added P7,637.50 accrued interests and charges, or a
Deed of Chattel Mortgage and the Continuing Undertaking, they nevertheless total unpaid balance of P87,637.50 for which they are jointly and severally liable.
maintained that these documents were never intended by the parties to be legal, Furthermore, the unpaid balance should earn 14% interest per annum as stipulated
valid and binding but a mere subterfuge to conceal the loan with usurious interests in the Promissory Note, computed from 20 March 1981 until fully paid
and claimed that since Asia Pacific could not directly engage in banking business, it • On the amount of attorney's fees which under the Promissory Note is equivalent to
proposed to them a scheme wherein it could extend a loan to them without violating 25% of the principal obligation and interests due, it is not, strictly speaking, the
banking laws attorney's fees recoverable as between the attorney and his client regulated by the
• The RTC issued writ of replevin against C. G. Dizon Construction for the surrender Rules of Court. Rather, the attorney's fees here are in the nature of liquidated
of the bulldozer crawler tractors subject of the Deed of Chattel Mortgage, which of damages and the stipulation therefor is aptly called a penal clause. It has been said
the 3, only 2 were actually turned over and were subsequently foreclosed by Asia that so long as such stipulation does not contravene the law, morals and public
Pacific to satisfy the obligation order, it is strictly binding upon the obligor
• The RTC ruled in favor of Asia Pacific holding them to pay jointly and severally the • Nevertheless, it appears that their failure to fully comply with their part of the
unpaid balance bargain was not motivated by ill will or malice, but due to financial distress
• On appeal, the CA affirmed in toto the decision occasioned by legitimate business reverses. They in fact paid a total of P130,000.00
in 3 installments, and even went to the extent of voluntarily turning over to Asia
ISSUES & ARGUMENTS Pacific their heavy equipment consisting of 2 bulldozer crawler tractors, all in a bona
fide effort to settle their indebtedness in full. Article 1229 of the New Civil Code
specifically empowers the judge to equitably reduce the civil penalty when the
W/N they can be held liable under the said documents
principal obligation has been partly or irregularly complied with. Upon the foregoing
premise, the Court held that the reduction of the attorney's fees from 25% to 15%
of the unpaid principal plus interests is in order
Page 510 of 528

• Finally, while the Court empathizes with them, it cannot close its eyes to the
overriding considerations of the law on obligations and contracts which must be
upheld and honored at all times. They have undoubtedly benefited from the
transaction; they cannot now be allowed to impugn its validity and legality to escape
the fulfillment of a valid and binding obligation
Judgment AFFIRMED.
KATH MATIBAG
Page 511 of 528

460. Development Bank of the Philippines v. CA| Mendoza, J. P289,600.00 in favor of petitioner. These circumstances taken together leads to the
G.R. No. 137557. October 30, 2000 necessity to equitably reduce the interest due to petitioner and we do so by reducing to
Mitigation of Damages 10% the additional interest of 18% per annum computed on total amortizations past
due. The penalty charge of 8% per annum is sufficient to cover whatever else damages
FACTS petitioner may have incurred due to private respondents’ delay in paying the
amortizations, such as attorney’s fees and litigation expenses.
• Petitioner DBP is the owner of a parcel of land in Bulacan which it sold to spouses
Dela Pena under a Deed of Conditional Sale for 207,000. The spouses constructed a
house on the said lot and began living there. They also introduced other
improvements by planting fruit trees and building a small garage. After making
several payments amounting to P289, 600, they went to petitioner DBP and asked
for the execution of a Deed of Absolute Sale and for the issuance of the title to the
property However, respondent spouses De La Peña were informed by DBP through
a letter that there was still a balance of P221,86.85. The parties failed to reach an
agreement, respondent spouses filed a complaint against petitioner on January 30,
1990 for specific performance and damages with injunction before the Regional
Trial Court, Valenzuela.
• The trial court ruled in favor of Petitioner DBP and ordered the private respondents
to pay the remaining balance under the deed, plus interest, penalty, dditional interest
and interest on advances. The amount to be paid amounted to P233,361.50, which is
more than the principla obligation of P207,000.
ISSUES & ARGUMENTS
W/N the interest charges are excessive

The interests are excessive.
It is noteworthy that the interests paid by private respondents, which amounted to
P233,361.50,including therein the regular interest, additional interest, penalty charges,
and interest on advances, is more than the principal obligation in the amount of
P207,000.00, which private respondents owed. Moreover, the additional interest of 18%
alone amounted to P106,853.45, which is almost half of what was already paid by private
respondents.
Article 1229 of the Civil Code states that “Even if there has been no performance, the
penalty may also be reduced by the courts if it is iniquitous or unconscionable.” In Barons
Marketing Corp. v. Court of Appeals, the Court reduced the 25% penalty charge to cover the
attorney’s fees and collection fees, which was in addition to the 12% annual interest, to
10% for being manifestly exorbitant. Likewise, in Palmares v. Court of Appeals, Court
eliminated altogether the payment of the penalty charge of 3% per month for being
excessive and unwarranted under the circumstances.
In the instant case, private respondents made regular payments to petitioner DBP in
compliance with their principal obligation. They failed only to pay on the dates stipulated
in the contract. This indicates the absence of bad faith on the part of private respondents
and their willingness to comply with the terms of the contract. Moreover, of their
principal obligation in the amount of P207,000.00, private respondents have already paid NINA MEIJA
Page 512 of 528

461. CBTC vs. CA| Carpio • L.C. Diaz was not at fault that the passbook landed in the hands of the impostor.
G.R. No. 138569, September 11, 2003 | Solidbank was in possession of the passbook while it was processing the deposit.
After completion of the transaction, Solidbank had the contractual obligation to
FACTS return the passbook only to Calapre, the authorized representative of L.C. Diaz.
• Solidbank’s failure to return the passbook to Calapre made possible the withdrawal
• L.C. Diaz & Company, CPA’s, a private accounting firm, through its cashier of the P300,000 by the impostor who took possession of the passbook. Thus, under
Macaraya, filled up 2 savings deposit slips and asked Calapre to deposit the same in the doctrines of proximate cause and last clear chance, Solidbank should be held
Solidbank. Calapre was also given the passbook. liable for the unauthorized withdrawal.
• Teller No. 6 acknowledged the deposit slips by returning to Calapre the duplicate • Nevertheless, the mitigation of damages is proper in this case. Under Article 1172,
copies. However, since Calapre had to make another deposit with Allied Bank, he “liability (for culpa contractual) may be regulated by the courts, according to the
left the passbook with Solidbank. circumstances.” This means that if the defendant exercised the proper diligence in
• Upon returning to retrieve the passbook, Teller No. 6 informed him that somebody the selection and supervision of its employee, or if the plaintiff was guilty of
had gotten it but she could not remember to whom she gave the passbook, only contributory negligence, then the courts may reduce the award of damages.
saying that it was someone shorter than Calapre. • In this case, L.C. Diaz was guilty of contributory negligence in allowing a withdrawal
• The following day, L.C. Diaz called up Solidbank requesting to stop any transaction slip signed by its authorized signatories to fall into the hands of an impostor. Thus,
using the same passbook until L.C. Diaz could open a new account. It also formally the liability of Solidbank should be reduced.
wrote Solidbank with the same request.
• On that same day, however, it also discovered the unauthorized withdrawal the day CA AFFIRMED WITH MODIFICIATION.
before of P300,000 from its savings account. The withdrawal slip bore the
signatures of its authorized signatories, Diaz and Murillo, but the two denied having
signed the same. A certain Noel Tamayo was said to have received the money.
• L.C. Diaz then filed a complaint for recovery of a sum of money against Solidbank
with the RTC, which dismissed the complaint. The CA reversed, and, upon motion
for reconsideration, modified its decision by deleting the award for exemplary
damages and attorney’s fees. Hence, this petition.
ISSUES & ARGUMENTS
W/N the CA erred in not mitigating the damages awarded under Article 2197 of
the Civil Code, notwithstanding its finding that the bank’s negligence was only
contributory.
AWARD OF ACTUAL DAMAGES MITIGATED. SOLIDBANK LIABLE FOR

60%, L.C. DIAZ LIABLE FOR 40%.
• The trial court believed that L.C. Diaz’s negligence in not securing its passbook
under lock and key was the proximate cause that allowed the impostor to withdraw
the P300,000. For the appellate court, the proximate cause was the teller’s
negligence in processing the withdrawal without first verifying with L.C. Diaz. We
do not agree with either court.
CHRISSIE MORAL
Page 513 of 528

462. Manchester Development vs Court of Appeals | Gancayco
G.R. No. 75919, May 7, 1987149 SCRA 562| HOLDING & RATIO DECIDENDI
FACTS ALTHOUGH THERE WAS NO SPECIFIC STATEMENT AS TO THE AMOUNT

OF DAMAGES IN THE PRAYER OF THE COMPLAINT, THE DOCKET FEE
• The present case is an action for torts and damages and specific performance with SHOULD BE BASED ON THE ALLEGED TOTAL AMOUNT OF DAMAGES
prayer for temporary restraining order, etc. The prayer is for the issuance of a writ FOUND IN THE BODY OF THE COMPLAINT.
of preliminary prohibitory injunction during the pendency of the action against the • The docketing fee should be assessed by considering the amount of damages as
defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for alleged in the original complaint. The Court of Appeals therefore, aptly ruled in the
the property in question, to attach such property of defendants that maybe sufficient present case that the basis of assessment of the docket fee should be the amount of
to satisfy any judgment that maybe rendered, and after hearing, to order defendants damages sought in the original complaint and not in the amended complaint.
to execute a contract of purchase and sale of the subject property and annul • The Court cannot close this case without making the observation that it frowns at
defendants' illegal forfeiture of the money of plaintiff, ordering defendants jointly the practice of counsel who filed the original complaint in this case of omitting any
and severally to pay plaintiff actual, compensatory and exemplary damages as well as specification of the amount of damages in the prayer although the amount of over
25% of said amounts as maybe proved during the trial as attorney's fees and P78 million is alleged in the body of the complaint. This is clearly intended for no
declaring the tender of payment of the purchase price of plaintiff valid and other purpose than to evade the payment of the correct filing fees if not to mislead
producing the effect of payment and to make the injunction permanent. The the docket clerk in the assessment of the filing fee. This fraudulent practice was
amount of damages sought is not specified in the prayer although the body of the compounded when, even as this Court had taken cognizance of the anomaly and
complaint alleges the total amount of over P78 Million as damages suffered by ordered an investigation, petitioner through another counsel filed an amended
plaintiff. complaint, deleting all mention of the amount of damages being asked for in the
• The docket fee paid upon filing of complaint in the amount only of P410.00 by body of the complaint. It was only when in obedience to the order of this Court of
considering the action to be merely one for specific performance where the amount October 18, 1985, the trial court directed that the amount of damages be specified
involved is not capable of pecuniary estimation is obviously erroneous. Although in the amended complaint, that petitioners' counsel wrote the damages sought in the
the total amount of damages sought is not stated in the prayer of the complaint yet much reduced amount of P10,000,000.00 in the body of the complaint but not in
it is spelled out in the body of the complaint totalling in the amount of the prayer thereof. The design to avoid payment of the required docket fee is
P78,750,000.00 which should be the basis of assessment of the filing fee. obvious. The Court serves warning that it will take drastic action upon a repetition
• When this under-re assessment of the filing fee in this case was brought to the of this unethical practice.
attention of this Court together with similar other cases an investigation was • To put a stop to this irregularity, henceforth all complaints, petitions, answers and
immediately ordered by the Court. Meanwhile plaintiff through another counsel other similar pleadings should specify the amount of damages being prayed for not
with leave of court filed an amended complaint for the inclusion of Philips Wire and only in the body of the pleading but also in the prayer, and said damages shall be
Cable Corporation as co-plaintiff and by emanating any mention of the amount of considered in the assessment of the filing fees in any case. Any pleading that fails to
damages in the body of the complaint. The prayer in the original complaint was comply with this requirement shall not bib accepted nor admitted, or shall otherwise
maintained. After this Court issued an order on October 15, 1985 ordering the re- be expunged from the record.
assessment of the docket fee in the present case and other cases that were
investigated, on November 12, 1985 the trial court directed plaintiffs to rectify the Petition denied for lack of Merit. Decision of the Court of Appeals Affirmed.
amended complaint by stating the amounts which they are asking for. It was only
then that plaintiffs specified the amount of damages in the body of the complaint in
the reduced amount of P10,000,000.00. Still no amount of damages were specified
in the prayer. Said amended complaint was admitted.
ISSUES & ARGUMENTS

W/N the filing fee should be based on the amount of damages although the same
is not found in the prayer of the complaint?
MAUI MORALES
Page 514 of 528
463 Davao Light v. Dinopol| Fernan
GR. No. 75195 August 29, 1988
FACTS
• On July 31, 1984, rivate respondent Abundio T. Merced doing business under the
name and style of southern Engineering Works, filed an action in the trial court for
damages with preliminary mandatory injunction against petitioner Davao Light and
Power Co., Inc., for abruptly disconnecting his electric meter as a result of which he
suffered moral damages, loss of business and credit standing, and loss of profits.
• On Dec. 11, 1985 and Jan. 27, 1986, petitioner filed a motion and supplemental
motion, respectively, to require private respondent to pay additional docket fees on
his qualified claims for damages. On Feb. 14, 1986, respondent Judge Dinopol
denied two motions to require private respondent to pay additional docket fees.
Upon motion for reconsideration, four months had elapsed without respondent
judge resolving the same.
• Hence, this petition
ISSUES & ARGUMENTS

• (1) WON the respondent judge committed grave abuse of discretion.
(2) WON Abundio Merced should be awarded damages.

Yes.
When respondent judge refused to order the re-assessment, he committed

grave abuse of discretion. He acted in contravention of Rule 11 of the Interim
Rules of court which was laready in effect when the complaint for damages was
brought before his sala. Such actuation calls for the corrective writ of certiorari.
No.
Merced should specify the amount of damages being sought, not only in the
body of the pleading but also in the prayer, or his action will be dismissed.
MAGIC MOVIDO
Page 515 of 528

464. Sun Insurance vs. Asuncion | Gancayco, J.: • The pattern and the intent to defraud the gov’t of the docket fee due it is obvious
G.R. No. 79937, February 13, 1999 | 170 SCRA 274 not only in the filing of the original complaint but also in the filing of the 2nd
amended complaint
FACTS • However, in this case, a more liberal interpretation of the rules is called for because
unlike in Manchester, respondent demonstrated his willingness to abide by the rules
• Sun Insurance filed a complaint with the RTC for the consignation of a premium by paying the additional docket fees as required
refund on a fire insurance policy with a prayer for the judicial declaration of its • Nevertheless, petitioner contends that the docket fee that was paid is still
nullity against respondent Manuel Tiong. insufficient considering the total amount of the claim
• Respondent, on the other hand, filed a complaint in the RTC fro refund of • This is a matter which the clerk of court of the lower court and/or his duly
premiums, writ of preliminary attachment & sought the payment of actual, authorized docket clerk or clerk in charge should determine and if any amount is
compensatory, moral, exemplary & liquidated damages, attorney’s fees, expenses of thereafter found to be due, he must require the respondent to pay such amount
litigation & costs of suit against petitioner • Thus the SC rules as follows:
• In the body of the original complaint, the total amount of damages sought • It is not simply the filing of the complaint or appropriate initiatory pleading, but the
amounted to about P50M payment of the prescribed docket fee, that vests a TC with jurisdiction over the
• In the prayer, the amount of damages asked for was not stated subject matter/nature of the action. Where the filing of the initiatory pleading is not
• The action was for the refund of the premium and the issuance of a writ of accompanied by payment of the docket fee, the court may allow payment of the fee
preliminary attachment with damages within a reasonable time but in not case beyond the applicable prescriptive or
• The amount of only P210 was paid for the docket fee reglementary period
• Respondent filed an amended complaint wherein in the prayer, it is asked that he be • The same rule applies to permissive counterclaims, third-party claims, and similar
awarded no less than P10M as actual & exemplary damages but in the body of the pleadings, which shall not be considered filed until and unless the filing fee
complaint the amount of his pecuniary claim is approximately P44.6M. prescribed therefore is paid.
• Such amended complaint was admitted & the respondent was re-assessed the o The court may also allow payment of said fee within a reasonable time but also
additional docket fee of P39,786 based on his prayer of not less than P10M in in no case beyond its applicable prescriptive/reglementary period
damages, which he paid • Where the TC acquires jurisdiction over a claim by the filing of the appropriate
• Subsequently, respondent filed a supplemental complaint alleging an additional claim pleading and payment of the prescribed filing fee, but, subsequently, the judgment
of P20M in damages, making a total claim of P64.6M awards a claim not specified in the pleading, or if specified the same has been left
• He then paid an additional docket fee of P80K for determination by the court, the additional filing fee therefore shall constitute a
• The lower court ordered respondent to be re-assessed for additional docket fee & lien on the judgment.
during the pendency of this case and after promulgation of the Manchester decision, o It shall be the responsibility of the clerk of court or his duly authorized deputy
respondent field an addition docket fee of P62K to enforce aid lien and assess and collect the additional fee
• Though he appears to have paid a total amount of P182K for the docket fee,
considering the total amount of his claim in the amended and supplemental Petition is dismissed for lack of merit
complaint (amounting to about P64.6M), petitioner insists that respondent must pay
a docket fee of P257.8K
ISSUES & ARGUMENTS
W/N a court acquires jurisdiction over a case when the correct and proper docket
fee has not been paid
CEO OCAMPO
Page 516 of 528

465. Ng Soon v. Hon. Alday, Billie Gan, China Banking Corporation | Melencio- because it is the courts which ultimately fix the same, but also because Rule 141,
Herrera Section 5(a) of the Rules of Court speaks of “the sum claimed, exclusive of
G.R. No.85879 September 29, 1989 | 178 SCRA 221 interest.” This clearly implies that the specification of the interest rate is not that
indispensable. Furthermore, the amounts claimed need not be initially stated with
FACTS mathematical precision. The same rule allows an appraisal “more or less.” In other
words, a final determination is still to be made by the court, and the fees ultimately
• During his lifetime, Mr. Gan Bun Yaw opened a Savings Account in China Banking found to be payable will either be additionally paid or refunded to the party
Corporation (CBC) wherein he deposited P900,000 more or less. concerned.
• Before his death, he lapsed into a coma until he finally died. His passbook still • The pattern in Manchester to defraud the government of the docket fees due is
showed a deposit of P900,000 more or less. patently absent in this case. Petitioner demonstrated her willingness to abide by the
• Petitioner Ng Soon claims to be the widow of Yaw. She looked for the deposit Rules by paying the assessed docket fees of P3,600. She also asked the court to
passbook to no avail. She discovered that CBC closed the savings account and that inform her of the deficiency, if any.
defendant Billie Gan connived and colluded with the officers of CBC to withdraw • Where the filing of the initiatory pleading is not accompanied by payment of the
all the savings account of Yaw by forging his signature. docket fee, the court may allow payment of the fee within a reasonable time but in
• Petitioner’s complaint alleges that she suffered actual damages in the form of no case beyond the applicable prescriptive period.
missing money in the savings account and expenses of litigation, moral damages and
exemplary damages, the amount of which she leaves to the discretion of the court, Petition granted. Lower Court orders are set aside. Civil case reinstated for determination and proper
and attorney’s fees equivalent to 20%. disposition of the respective claims and rights of the parties.
• For the filing of the complaint, petitioner paid P3,600 as docket fees. Respondent
moved to expunge the complaint from the record for the alleged non-payment of
the required docket fees. TC issued an order granting the motion to expunge
complaint.
ISSUES & ARGUMENTS
W/N TC incorrectly applied the doctrine in the case of Manchester v. CA.

W/N TC acted with grave abuse of discretion in ordering the complaint expunged from
the record although petitioner had paid the necessary filing fees.
YES. Complaint reinstated.
• Manchester laid down the rule that all complaints should specify the amount of
damages prayed for not only in the body of the complaint but also in the prayer; that
said damages shall be considered in the assessment of the filing fees; and that any
pleading that fails to comply with such requirement shall not be accepted nor
admitted, or shall, otherwise, be expunged from the record.
• While the body of the complaint was silent as to the exact amount of moral and
exemplary damages and attorney’s fees, the prayer did specify the amount of not less
than P50,000 as moral and exemplary damages, and not less than P50,000 as
attorney’s fees. These amounts are definite enough and enabled the clerk of court to
compute the docket fees payable.
• Also, the principal amount sought to be recovered as missing money was fixed at
P900,000. The failure to state the rate of interest demanded was not fatal not only TIN OCAMPO-TAN
Page 517 of 528

466. Tacay vs RTC of Tagum|
GR Nos. 88075-77| December 20, 1989
FACTS
• These were 2 separate cases originally filed by Godofredo Pineda at the RTC of
Tagum for recovery of possession (acciones publiciana) against 3 defendants,
namely: Antonia Noel, Ponciano Panes, and Maximo Tacay.
• Pineda was the owner of 790 sqm land evidenced by TCT No. T-46560. The
previous owner of such land has allowed the 3 defendants to use or occupy the
same by mere tolerance. Pineda, having himself the need to used the property, has
demanded the defendants to vacate the property and pay reasonable rentals
therefore, but such were refused.
• The complaint was challenged in the Motions to Dismiss filed by each defendant
alleging that it did not specify the amounts of actual, nominal, and exemplary
damages, nor the assessed value of the property, that being bars the determination
of the RTC’s jurisdiction in deciding the case.
• The Motions to Dismiss were denied but the claims for damages in the complaint
were expunged for failure to specify the amounts. Thus, the defendants filed a Joint
Petition for certiorari, mandamus, prohibition, and temporary restraining order
against the RTC.
ISSUES & ARGUMENTS
Whether or not the amount of damages claimed and the assessed value of the
property are relevant in the determination of the court’s jurisdiction in a case for
recovery of possession of property?
HOLDING &RATIO DECIDENDI
Determinative of the court’s jurisdiction in a recovery of possession of property is the

nature of the action (one of accion publicaina) and not the value of the property, it may
be commenced and prosecuted without an accompanying claim for actual, nominal or
exemplary damages and such action would fall within the exclusive original jurisdiction
of the RTC. The court acquired jurisdiction upon the filing of the complaint and
payment of the prescribed docket fees.
JAVIN OCAMPO
Page 518 of 528

467. Ayala Corporations vs. Honorable Madayag |Gancayco
FACTS
• Private respondents filed against petitioner an action for specific performance with
damages in the RTC of Makati
• Ayala Corp, in turn, moved to dismiss the case on the basis of failure to pay
prescribed docket fees and failure to specify amount exemplary damages claimed.
• RTC denied both motion and MR, hence this petition.
ISSUES & ARGUMENTS
W/N the lower court should dismiss the case
THE COURT SHOULD EITHER EXPUNGE THE CLAIM FOR EXEMPLARY

DAMES OR GIVE TIME FOR RESPONDENTS TO AMEND THE COMPLAINT.
• Docket fees should be computed on the amount of damages stated in the
complaint.
• According to Sun Insurance vs. Judge Asuncion, where the filing of the initiatory
pleading is not accompanied by payment of the docket fee, the court may allow
payment of the fee within a reasonable time but not beyond prescriptive or
reglementary period. Or if the claim is not specified in the pleading or is to be
determined by the court then the filing fee would constitute as a lien of the
judgment.
• However, in the case of Tacay vs. RTC of Tagum, the Court said that the phrase
"awards of claims not specified in the pleading" refers only to "damages arising after
the filing of the complaint or similar pleading.” Thus, in the case at bar, there was a
need to specify the amount of the exemplary damages claimed.
• As ruled in Tacay the trial court may either order said claim to be expunged from the
record as it did not acquire jurisdiction over the same or on motion, it may allow,
within a reasonable time, the amendment of the amended and supplemental
complaint so as to state the precise amount of the exemplary damages sought and
require the payment of the requisite fees therefore within the relevant prescriptive
period.
MARICE PACHECO
Page 519 of 528

468 General v. Claravall | Narvasa, J. increased court filing fees effective October 1, 1984, which required the filing fees on all
G.R. No. 96724 March 21, 1991 | kinds of damages, first be paid to the clerk of court where the criminal action is filed
FACTS The purpose of the Resolution, according to the late Chief Justice Claudio Teehankee,
• Benneth Thelmo filed with the Office of the Public Prosecutor of Rizal a sworn was to discourage the "gimmick of libel complainants of using the fiscal's office to
complaint accusing Honesto General and another person of libel, and alleged that include in the criminal information their claim for astronomical damages in multiple
by reason of the offense he (Thelmo) had suffered actual, moral and exemplary millions of pesos without paying any filing fees. This was the same consideration that
damages in the total sum of P100 million. The information for libel subsequently underlay the Manchester ruling: the fraudulent practice, manifested by counsel in omitting
filed with the RTC at Pasig, after preliminary investigation, did not however contain the amount of damages in the prayer. It was clearly intended for no other purpose than
any allegation respecting the damages due the offended party. to evade the payment of the correct filing fees if not to mislead the docket clerk in the
• At the trial, the defense raised the issue of non-payment of the docket fees assessment of the filing fee.
corresponding to the claim of damages contained in Thelmo's sworn complaint
before the fiscal, as a bar to Thelmo's pursuing his civil action therefor. The trial The Court adopted further amendments to the 1985 Rules on Criminal Procedure, with
Court overruled the objection, by Order dated March 28, 1990. It also denied the effect on October 1, 1988. Among the provisions revised was Section 1, Rule 111 which
defendants' motion for reconsideration and motion for suspension of proceedings, stated that:
by another Order dated May 17, 1990.
• General and his co-accused are now before this Court applying for a writ of certiorari
to annul the aforesaid Orders of the Trial Court on the theory that they had been XXX
rendered with grave abuse of discretion.
When the offended party seeks to enforce civil liability against the accused by way of moral, nominal,
ISSUES & ARGUMENTS temperate or exemplary damages, the filing fees for such civil action as provided in these Rules shall
• W/N the filing fees should first be paid so that the civil liability arising from constitute a first lien on the judgment except in an award for actual damages.
the offense will be deemed to have been impliedly instituted with the
criminal action In cases wherein the amount of damages, other than actual, is alleged in the complaint or information, the
corresponding filing fees shall be paid by the offended party upon the filing thereof in court for trial.
In any event, the Court now makes that intent plainer, and in the interests of clarity and
The were no errors on the challenged order. certainty, categorically declares for the guidance of all concerned that when a civil action
is deemed impliedly instituted with the criminal in accordance with Section 1, Rule 111
of the Rules of Court—because the offended party has NOT waived the civil action, or
Manchester laid down the doctrine the specific amounts of claims of damages must be reserved the right to institute it separately, or instituted the civil action prior to the
alleged both in the body and the prayer of the complaint, and the filing fees criminal action—the rule is as follows:
corresponding thereto paid at the time of the filing of the complaint; that if these
requisites were not fulfilled, jurisdiction could not be acquired by the trial court; and that 1) when "the amount of damages, other than actual, is alleged in the complaint or
amendment of the complaint could not "thereby vest jurisdiction upon the Court." Sun information" filed in court, then "the corresponding filing fees shall be paid by the
Insurance and Tacay affirmed the validity of the basic principle but reduced its stringency offended party upon the filing thereof in court for trial;"
somewhat by providing that only those claims as to which the amounts were not
specified would be refused acceptance or expunged and that, in any case, the defect was 2) in any other case, however—i.e., when the amount of damages is not so alleged in the
not necessarily fatal of irremediable as the plaintiff could on motion be granted a complaint or information filed in court, the corresponding filing fees need not be paid
reasonable time within which to amend his complaint and pay the requisite filing fees, and shall simply "constitute a first lien on the judgment, except in an award for actual
unless in the meantime the period of limitation of the right of action was completed. damages.
The 1985 Rules on Criminal Procedure incorporated a new provision in light of this
Court's Resolution of September 13, 1984 in Adm. Matter No. 83-6-389-0 requiring VP PADILLA
Page 520 of 528

469. Original Development and Construction v. CA | Paras. • Petitioner did not manifest willingness to pay docket fees as seen in Sun Insurance
G.R. No. 94677, October 15, 1991 | case
• As to awards of claims not specified in the pleadings — this Court had already
FACTS clarified that they refer only to damages arising after the filing of the complaint or
similar pleading, to which the additional filing fee shall constitute a lien on the
• Original Development (ODECOR) filed a case against Home Insurance Guaranty judgment. The amount of any claim for damages, therefore, arising on or before the
Corp (HIGC) National Home Mortgage Finance Corp (NHMFC) Caloocan City filing of the complaint or any pleading, should be specified. The exception
Public School Teachers Association (CCPSTA) for breach of contract and damages contemplated as to claims not specified or to claims although specified are left for
• ODECOR built a housing project for CCPSTA under sponsorship of HIGC, there the determination of the court is limited only to any damages that may arise after the
was delay of payment by HIGC and refused to allow ODECOR to build smaller filing of the complaint or similar pleading for then it will not be possible for the
lots requiring it to go through NHMFC for clearance. claimant to specify nor speculate as to the amount thereof
• ODECOR’s project was financed by its president personally in order to save it from
collapse as HIGC refused to pay.
• Despite damands NHMFC paid only 5.366M to ODECOR in 5 years causing
unnecessary expenses to ODECOR. ODECOR has been unpaid by HIGC
NHMFC of 2.272M which represents loan take out proceeds
• ODECOR asked RTC to make defendants pay, ODECOR paid filing fees in
amount of 4,344.00 4,344.00 and 86.00 based on loan take out proceeds of 2.272M
which is allegedly in possession of defendants, the rest prays for unspecified amount
of damages(actual, consequential, exemplary and moral).HIGC filed motion to
dismiss for non-payment, RTC denied ordering ODECOR to pay reassessed
amount and in case unspecified claims are awarded in judgment filing fees constitute
lien on judgment .ODECOR was heard by Clerk but deficiency could not be
included because prayer for attorney’s fees was not reiterated in prayer. Docket fees
paid did not include amount of attorney’s fees. COC moved to amend complaint,
HIGC moved for reconsideration to dismiss or amend complaint. ODECOR
amended complaint including all allegations plus attorney’s fees of 25% of total
monthly liability and expenses. HIGC filed petition for certiorari in CA after answer,
joining of issues and pre-trial conference date set, questioning jurisdiction of RTC
for failure to pay docket fees.
• CA ruled that RTC failed to acquire jurisdiction
ISSUES & ARGUMENTS
W/N Court acquires jurisdiction over case even if complaint does not specify
amount of damages
ODECOR failed to allege with specificity denying RTC of jurisdiction

• ODECOR prayed for unspecified amounts of damages and 25% of attorney’s fees
“which will be proved at trial” there is not enough to support a proper assessment
of docket fees. Plaintiff must ascertain sums he wants even if not exact amount.
• Rule is TC now allowed to allow payment of fee within a reasonable time and within
prescriptive or reglamentary period. CHRIS PALARCA
Page 521 of 528

470. Phil. Pryce Assurance Corp. vs. CA and Gegroco, Inc., February 21, 1994 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the
payment of the prescribed docket fee, that vests a trial court with jurisdiction over the
FACTS subject-matter or nature of the action. Where the filing of the initiatory pleading is not
accompanied by payment of the docket fee, the court may allow payment of the fee
Petitioner, Interworld Assurance Corporation (now the Philippine Pryce Assurance within a reasonable time, but in no case beyond the applicable prescriptive or
Corporation), was the butt of the complaint for collection of sum of money, filed by reglamentary period.
respondent Gegroco, Inc. The complaint alleged that petitioner issued two surety bonds
in behalf of its principal Sagum General Merchandise. 2. The same rule applies to permissive counterclaims, third-party claims and similar
pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid.
Petitioner then filed a "Motion with Leave to Admit Third-Party Complaint" with the The court may also allow payment of said fee within a prescriptive or reglementary
Third-Party Complaint attached. The trial court admitted the Third Party Complaint and period.
ordered service of summons on third party defendants.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate
The case was set for pre-trial conference several times but Pryce was absent each time. pleading and payment of the prescribed filing fee, but subsequently, the judgment awards
Thus, Pryce was declared in default. a claim nor specified in the pleading, or if specified the same has not been left for
determination by the court, the additional filing fee therefor shall constitute a lien on the
Gegroco, Inc. then presented evidence ex parte and the trial court ruled that Pryce was judgment. It shall be the responsibility of the clerk of court or his duly authorized deputy
liable to Gegroco, Inc. This ruling was affirmed by the Court of Appeals. to enforce said lien and assess and collect the additional
fee.
Pryce, meanwhile, claims that the case should not have been set for pre-trial because
there was a 3rd-party complaint. It should be remembered that both in Manchester and Sun Insurance plaintiffs therein
paid docket fees upon filing of their respective pleadings, although the amount tendered
ISSUE were found to be insufficient considering the amounts of the reliefs sought in their
complaints.
Whether or not the 3rd party complaint is a mere scrap of paper for failure to pay
In the present case, petitioner did not and never attempted to pay the requisite docket
docket fees?
fee. Neither is there any showing that petitioner even manifested to be given time to pay
the requisite docket fee, as in fact it was not present during the scheduled pre-trial on
RULING
December 1, 1988 and then again on February 1, 1989. Perforce, it is as if the third-party
complaint was never filed.
YES The court of Appeals properly considered the third-party complaint as a mere
scrap of paper due to petitioner's failure to pay the requisite docket fees.
Note that: A third-party complaint is one of the pleadings for which Clerks of court of Regional Trial
Courts are mandated to collect docket fees pursuant to Section 5, Rule 141 of the Rules of Court. The
record is bereft of any showing that the appellant paid the corresponding docket fees on its third-party
complaint. Unless and until the corresponding docket fees are paid, the trial court would not acquire
jurisdiction over the third-party complaint (Manchester Development Corporation vs. Court of Appeals,
149 SCRA 562). The third-party complaint was thus reduced to a mere scrap of paper not worthy of
the trial court's attention. Hence, the trial court can and correctly set the case for pre-trial on the basis of
the complaint, the answer and the answer to the counterclaim.
In Sun Insurance vs. Asuncion, the following rules were laid down:
BYRON PEREZ
Page 522 of 528

471. Kaw vs. Anunciacion| Medoza appointed special deputy sheriff unless the regular deputy sheriff is absent or on
ADM MTJ-93-811, March 1, 1996 | 242 SCRA 1 leave.
FACTS Yes
• The sheriff failed to comply with the requisite 3 to 5 day notice to vacate the
• Pending before the Sala of Judge Anunciacion was an ejectment case filed by Italy premises. Also he levied on tools and implements used in the bakery which are
Marketing Corporation (IMC) against George Kaw. IMC was the new owner of the exempt from execution.
building where Kaw was renting a space for his store.
• The Summons with a copy of the complaint was served on Kaw on May 9, 1990
requiring him to file his answer within a non-extendible period of 10 days. Kaw
asked for a 15 day extension on May 18 as he still had not engaged counsel and
another 10 day extension on June 1 to file the answer.
• The judge did not act on the motions and ordered Kaw to vacate the premises and
to pay monthly rental of P1500 until he vacates.
• The Kaws received the decision on June 7 and were served a writ of execution the
following day.
ISSUES & ARGUMENTS
1. W/N Judge was ignorant of the law by fixing monthly rental at P1500
2. W/N Judge was ignorant of the law by not acting on motions for extension
3. W/N Judge was ignorant of the law in ordering the execution
4. W/N Judge was ignorant of the law is designating a special deputy sheriff
5. W/N Sheriff was ignorant of the law in enforcing writ of execution
No
• IMC had no way of determining how much rent to charge Kaw as they had no pre-
existing lease contract and so they left it to the determination of the Judge. Also, it
cannot be claimed that such was the amount set to evade payment of docket fees as
the fee is a straight fee of P100
No
• Kaw was served the complaint with a warning the the 10 day period is non-
extendible.
Yes
• The fact that the MeTC’s decision in ejectment cases is immediately executory does
not dispense with the requirement for notice of the motion for execution.
Yes
• The regular deputy sheriff was not shown to have been absent or on leave. The
special deputy sheriff who was the deputy sheriff of the clerk or court could not be JAN PORTER
Page 523 of 528

472. Manuel vs. Alfeche, Jr.| Panganiban • Petitioner’s contention that Article 33 of the NCC allows an independent civil
G.R. No. 115683, July 26, 1996 | 259 SCRA 475 action for damages in cases of defamation, fraud, and physical injuries is misplaced.
Here, the civil action had been actually instituted with the criminal prosecution,
FACTS given that Manuel took an active part in the proceedings by presenting evidence and
even filing a Petitioner’s Memorandum. Hence, there can be no longer any
• The City Prosecutor of Roxas City filed with the RTC and Information for libel independent civil action to speak of.
against Celino (writer/author), Fajardo (editor-in-chief), Fernandez (associate • Petitioner also cites the case of General vs. Claraval28l to prove that there is no need to
editor), and Tia (assistant editor) of the regional newspaper “Panay News” for pay filing fees for moral and exemplary damages if the amounts for such claims are
allegedly publishing an article entitled “Local Shabu Peddler Now a Millionaire.” not specified in the Information. However, it must be noted that this ruling was
• According to the Information, the said article stated that Delia Manuel was the intended to apply to a situation wherein either:
“Shabu Queen” of Western Visayas, and has been raking in millions since she c) the judgment awards a claim not specified in the pleading, or
started peddling prohibited drugs, thereby (unjustly) besmirching her reputation, d) the complainant expressly claims moral, exemplary, temperate, and/or
good name, and character as a private person and as a businesswoman. nomial damages but has not specified ANY amount at all, leaving it
• Thus, as a direct consequence of the publication, it was also alleged that Manuel entirely to the trial court’s discretion.
suffered actual, moral, and exemplary damages in the amount of TEN MILLION • In the present case, since Manuel claimed an amount of TEN MILLION PESOS as
PESOS. damages, the doctrine under General has been rendered inapplicable to her petition.
• The respondent judge finding three of the accused guilty and acquitting the fourth.
However, he dismissed the civil indemnity (by way of moral damages) for lack of Petition DISMISSED.
jurisdiction, on the ground that Manuel did not pay the filing fees therefor. Hence
this petition.
ISSUES & ARGUMENTS
W/N Manuel is entitled to recover damages through an independent civil action, and
despite non-payment of filing fees.
o Petitioner: Under the New RoC, it is only when the amount of damages other
than actual has been specified in the information that the filing fees is required
to be paid upon filing, and that since in this case the amount of damages stated
in the information partakes firstly of actual damages and is not entirely other
than actual, there is no need to pay such fees upon filing.
o Respondents: The present petition is premature because there is a pending
appeal of the conviction for libel before the CA, filed by respondents.
MANUEL NOT ENTITLED TO RECOVER DAMAGES UNDER AN

INDEPENDENT CIVIL ACTION.
• The award of moral and exemplary damages by the trial court is inextricably linked
and necessarily dependent upon the factual finding of basis therefore, i.e. the
existence of the crime of libel. Since such fact is pending determination before the
CA, this court cannot entertain the petition of Manuel, in order to avoid an absurd CHRISSIE MORAL
situation wherein the CA reverses the decision of the RTC but this court awards
damages in favor of Manuel. Hence, Manuel should have brought the petition 28
“The Manchester doctrine requiring payment of filing fees at the time of commencement of the action is
before the CA first.
applicable to impliedly instituted civil actions under Section 1, Rule 111 only when the amount of damages, other than
actual, is alleged in the complaint or information.”
Page 524 of 528
473. Alday v. FGU Insurance Corp. |Gonzaga-Reyes • Petitioner’s counterclaim for commissions, bonuses, and accumulated premium
G.R. 138822, Jan. 23, 2001 reserves is merely permissive. The evidence required to prove petitioner’s
claims differs from that needed to establish respondent’s demands for the
FACTS recovery of cash accountabilities from petitioner, such as cash advances and
costs of premiums. The recovery of respondent’s claims is not contingent or
• FGU filed a complaint against Evangeline Alday alleging that the latter owed it dependent upon establishing petitioner’s counterclaim, such that conducting
P114,650.76 representing unliquidated cash advances, unremitted costs of premiums separate trials will not result in the substantial duplication of the time and effort
and other charges incurred by petitioner in the course of her work as an insurance of the court and the parties. This conclusion is further reinforced by
agent for respondent. Petitioner answered and by way of counterclaim, asserted her petitioner’s own admissions since she declared in her answer that respondent’s
right for the payment of P104,893.45, representing direct commissions, profit cause of action, unlike her own, was not based upon the Special Agent’s
commissions and contingent bonuses earned. Contract. However, petitioner’s claims for damages, allegedly suffered as a
• FGU filed a motion to dismiss Alday’s counterclaim contending that the trial court result of the filing by respondent of its complaint, are compulsory.
never acquired jurisdiction over the same because of the non-payment of docket
fees by petitioner. Petitioner asked the trial court to declare her counterclaim as • There is no need for petitioner to pay docket fees for her compulsory counterclaim. On the other
exempt from payment of docket fees since it is compulsory and that respondent be hand, in order for the trial court to acquire jurisdiction over her permissive counterclaim,
declared in default for having failed to answer such counterclaim. petitioner is bound to pay the prescribed docket fees
• The trial court grated FGU’s motion. Petitioner’s motion for reconsideration was
subsequently denied. On appeal, the CA affirmed the RTC ruling. • Although the payment of the prescribed docket fees is a jurisdictional
requirement, its non-payment does not result in the automatic dismissal of the
ISSUES & ARGUMENTS case provided the docket fees are paid within the applicable prescriptive or
reglementary period. Absent allegation and showing that petitioner has attempted to
evade the payment of the proper docket fees for her permissive counterclaim, the trial court
W/N petitioner’s counterclaim is only permissive and requiring the payment of
should have instead given petitioner a reasonable time, but in no case beyond the applicable
docket fees.
prescriptive or reglementary period, to pay.
• Yes. A compulsory counterclaim is one which, being cognizable by the regular

courts of justice, arises out of or is connected with the transaction or
occurrence constituting the subject matter of the opposing party’s claim and
does not require for its adjudication the presence of third parties of whom the
court cannot acquire jurisdiction.
• Tests that may be used in determining whether a counterclaim is compulsory or
permissive, summarized as follows:
o 1. Are the issues of fact and law raised by the claim and counterclaim
largely the same?
o 2. Would res judicata bar a subsequent suit on defendant’s claim absent
the compulsory counterclaim rule?
o 3. Will substantially the same evidence support or refute plaintiff’s claim as
well as defendant’s counterclaim?
o 4. Is there any logical relation between the claim and the counterclaim?
• Another test is the “compelling test of compulsoriness” which requires “a
logical relationship between the claim and counterclaim, that is, where
conducting separate trials of the respective claims of the parties would entail a
substantial duplication of effort and time by the parties and the court.” AYEN QUA
Page 525 of 528

474 Go v. Tong| Panganiban court may allow payment of the fee within a reasonable time but in no case beyond
G.R. No. 151942. November 27, 2003 the applicable prescriptive or reglementary period.
• Since the cause of action of Tong was supposed to prescribe in four (4) years he
FACTS was allowed to pay; and he in fact paid the docket fee in a year’s time. This period
• Juana Tan Go purchased a cashier’s check from the Far East Bank and Trust can be deemed unreasonable. Moreover, on his part there is no showing of any
Company (FEBTC) Lavezares, Binondo Branch in the amount of P500,000.00, pattern or intent to defraud the government of the required docket fee.
payable to Johnson Y. Tong.
• The check bore the words ‘Final Payment/Quitclaim’ after the name of payee to
insure that Tong would honor his commitment that he would no longer ask for
further payments for his interest in the ‘informal business partnership’ which he and
she had earlier dissolved.
• Tong deposited it with the words ‘Final Payment/Quitclaim’ already erased, hence,
it was not honored.
• Tong’s counsel wrote the manager of FEBTC Lavezares Branch informing that the
words ‘Final Payment/Quitclaim’ on the check had been ‘inadvertently erased
without being initialed by your bank or the purchaser thereof’ and thus requesting
that the check be replaced with another payable to ‘Johnson Tong-Final
Settlement/Quitclaim’ with the same amount,
• FEBTC did not grant the request, hence, Tong filed a complaint against FEBTC
and Juana and her husband Gregorio Go at the Manila RTC, for sum of money,
damages, and attorney’s fees, subject of the case at bar.
• The son of the spouses Go filed a criminal case against Tong for falsification of the
check but the same was dismissed by the Prosecutor.
• Tong filed a supplemental complaint [to be included in his original complaint for
collection of sum of money] to increase his claim for damages from 2.5 million to
55 million alleging that the spouses Go used their son to file a criminal case against
him, causing him damage.
• Tong, however, had not been able to pay filing fees. The court allowed him to pay in
a staggered basis. To first deposit P25,000.00 on or before December 15, 1999 and
P20,000.00 every month thereafter until the full amount of docket fees is paid, and
‘only then shall the deposits be considered as payment of docket fees
ISSUES & ARGUMENTS
W/N the court was correct in allowing Tong to pay his filing fees in a staggered
basis, therefore, allowing the case to push through even without full payment of
these docket fees.
YES. NON-PAYMENT OF DOCKET FEES DOES NO AUTOMATICALLY

CAUSE THE DISMISSAL OF THE CASE.
• Generally, where the filing of the initiatory pleading is not accompanied by payment
of the docket fee, the court cannot be vested with jurisdiction over the case. The CHESKA RESPICIO
Page 526 of 528

475. Planters Products vs. Fertiphil Corp. |
FACTS
• Pres. Ferdinand Marcos issued Letter of Instruction No.1465. Pursuant to this,

Fertiphil paid P10 per bag of fertilizer sold to the Fertilized and Pesticide Authority
which in turn, remitted said amount to Planters Products Incorporated for its
rehabilitation.
• A series of events triggered the Edsa Revolution which ultimately led to the ouster
of President Marcos. Subsequently,Fertiphil filed an action against PPI to collect the
amounts it was paid and for damages.
• RTC rendered the judgment in favor of Fertiphil and declared LOI 1465
unconstitutional
• PPI elevated the case to the CA on appeal (with Notice of Appeal filed before RTC)
• Fertiphil moved to dismiss the appeal alleging the PPI did not pay appellate docket
fee within the period prescribed for taking an appeal in accordance with the 1997
Rules on Civil Procedure even if PPI filed its appeal in 1992
• The CA ruled that 1997 Rules on Civil Procedure should still be followed because it
is intended to be applied to actions pending and undetermined at the time of its
passage
ISSUES & ARGUMENTS
1. Should the 1997 Rules on Civil Procedure be applied retrospectively?

2. Should PPI’s appeal be dismissed due to non payment of appellate docket
fees
No to both.
• General Rule: Rules of Procedure apply to actions pending and undetermined at
the time of their passage but this retrospective application only applies if no vested
rights are impaired.
• The rules retrospective application will impair PPI’s right to appeal because at the
time they filed their appeal all that was necessary to perfect an appeal was to file a
notice of appeal with the court that rendered the judgment 15 days from notice
thereof.
• Failure to pay proper appelate docket fees will not automatically result in dismissal
of an appeal. The dismissal would depend on the discretion of the court.
DEANNE REYES
Page 527 of 528

476. La Sallette College Represented by Its President, vs. Victor Pilotin [G.R. No.
149227. December 11, 2003] PANGANIBAN
FACTS
• Respondent herein, Pilotin is a student of the La Sallette College. When he tried to

enrol for the second semester of 1993, he was denied re-enrolment, since the
period for enrolment was already over.
• Pilotin then filed a complaint asking for the issuance of a writ of preliminary
mandatory injunction to compel La Sallete to re-admit him. The trial court ruled for
Pilotin. La Sallete received the decision on November 26,1998. It filed on the same
date a Notice of Appeal. However, Pilotin moved for a reconsideration of such on
the ground that La Sallete failed to pay the docket fees within the reglementary
period.
• The trial court denied the motion for reconsideration. The CA then dismissed the
appeal of La Salette for failure to pay the required docketing fee.
ISSUES & ARGUMENTS
Whether or not the appeal was seasonably filed by La Sallete?
No. The appeal was filed out of time.
• In order to perfect an appeal from a decision rendered by the RTC in the exercise of
its original jurisdiction, the following requirements must be complied with.
o First, within 15 days, a notice of appeal must be filed with the court that
rendered the judgment or final order sought to be appealed;
o Second, such notice must be served on the adverse party;
o Third, within the same 15-day period, the full amount of appellate court
docket and other legal fees must be paid to the clerk of the court that
rendered the judgment or final order.
• The payment of docket fees is necessary to defray court expenses in the handling of
cases. For this reason, and to secure a just and speedy disposition of every action
and proceeding, the Rules on Civil Procedure mandates the payment of docket and
other lawful fees within the prescribed period. Otherwise, the jurisdiction of the
proper court to handle a case is adversely affected.
• In the present case, it was proven that the petitioners indeed did not fail the docket
fees, and they have not shown any satisfactory reason to warrant the relaxation of
the Rules. JOSE RUIZ
Page 528 of 528

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3D 2009-2010 TORTS DIGESTS

TORTS & DAMAGES

a) Concepts and Requisites

IX. PROCEDURAL RULES ON DAMAGES

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

FACTS HOLDING & RATIO DECIDENDI

ISSUES & ARGUMENTS

Should Sia pay damages amounting to P300?

HOLDING & RATIO DECIDENDI

HOLDING & RATIO DECIDENDI

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

SINCE THE CIVIL CASE IS ONE FOR QUASI DELICT, MANLICLIC’S

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

• Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

SPOUSES LUNA ARE ENTITLED ONLY TO NOMINAL DAMAGES BUT

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

Petitioner is NOT GUILTY of Grave Oral Defamation.

• W/N Cabil was negligent

HOLDING & RATIO DECIDENDI

CABIL WAS NEGLIGENT. PETITIONER SPOUSES LIABLE.

6. In violation of traffic rules; Section 54 (Obstruction of Traffic)

7. In violation of traffic rules; Section 32(a) (Exceeding registered capacity)

ISSUES & ARGUMENTS

W/N the judgment in the criminal case includes a determination and

HOLDING & RATIO DECIDENDI

ISSUES & ARGUMENTS

W/N the CA committed grave abuse in discretion by granting excessive damages

HOLDING & RATIO DECIDENDI

ISSUES & ARGUMENTS

W/N Vergara is liable to pay damages.

HOLDING & RATIO DECIDENDI

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

YES. IT IS AN EQUITABLE MORTGAGE.

HOLDING & RATIO DECIDENDI

NO, THERE WAS NO RECOVERY OF DAMAGES TWICE FOR THE SAME

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

ISSUES & ARGUMENTS

HOLDING & RATIO DECIDENDI

ISSUES & ARGUMENTS

W/N CITYTRUST WAS NEGLIGENT AND THUS LIABLE FOR

HOLDING & RATIO DECIDENDI

YES, CITYTRUST NEGLIGENT