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Nature & Effects of Obligations - Breach,Remedies,Subsidiary

Nature & Effects of Obligations - Breach,Remedies,Subsidiary

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Published by: Sui on Aug 10, 2008
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Sarmiento v. Sps. Cabrido
Petitioner: Tomasa SarmientoRespondent: Sps Luis & Rose Sun-Cabrido and Maria Lourdes SunAppeal by certiorari
Corona, J.
Petitioner, states that in 1994 she, thru a certain Tita Payag, she acquired the services of DingDing’s Jewelry Shop, owned and managed by the Cabridos, for the purpose of converting Dra Virginia Lao’s pair of diamond earrings into two gold rings.When the rings were finished, Marilou Sun of DingDing’s Jewelry Shop, with whom TitaPayag discussed the resetting job, notified her that the rings were finished and that shecould bring them to the store for dismounting. Marilou was unable to dismount thediamond so she asked their goldsmith, Zenon Santos to do it. Using pliers, Zenon Santostwisted the diamond breaking it in the process.Petitioner was forced to buy a replacement for Php 30,000 and sought to recover damagesfrom the respondents. The Municipal Trial Court in Cities of Tagbilaran found in favor of the petitioner but the appellate courts reversed the MTCC’s decision.
1) WON the dismounting of the diamond from its original setting was partof the contract? YES2) WON respondents are liable for damages? YES
The Court sides with the petitioner1) The respondents initially denied accepting the said resetting job, but eventuallyadmitted to its existence nonetheless denying that they had any obligation to dismountthe diamonds from their original setting. Such statements were found to be inconsistentwith the acts of Marilou who, upon examining the diamonds, expressed no reservation asto their dismounting, which was after all an integral part of the job order.She should have asked Tita Payag to take the diamonds someplace else for dismounting if she really intended to spare the shop of dismounting them. Furthermore, upon completionof the rings, she was the one who called up the petitioner to bring the diamonds in forresetting, she even attempted to reset them herself before eventually delegating the taskto Santos.2) Obligations arising from contracts have the force of law between the contractingparties, corollarily, those who in the performance of their obligations are guilty of fraud,negligence or delay and those who in any manner contravene the tenor thereof, are liablefor damages.Santos, who had 40 years experience as a goldsmith, was negligent in dismounting thediamonds because he did not employ a miniature wire, as was the practice of the trade,but instead used a pair of pliers.It should be pointed out that when Marilou examined the diamonds before dismounting itfrom the original setting , they were in order, their subsequent breakage in the hands of Santos could only have been caused by his negligence in using the wrong equipment (
Resipsa loquitor).
The respondents tried to avoid liability by denying Santos and Marilou were employees of DingDing’s Jewelry Shop. But facts show that Santos had been working for DingDing’s forabout 6 months, accepting job orders while Tita Payag states that on at least 10 previousoccasions she had transacted with DingDing’s through Marilou. Therefore there exists anobligation by the owner’s of DingDing’s to pay actual damages to the petitionerMoral damages may be awarded in a breach of contract if it is proven that the defendantacted in 1) bad faith or was 2) guilty of gross negligence amounting to bad faith or in 3)wanton disregard of his contractual obligation.In this case, due to the gross negligence of Santos, their employee, the respondentspouses are liable for moral damages.
Petition granted. Respondent spouses ordered to pay jointly and severally to thepetitioner Php 30,000 in actual damages and Php 10,000 in moral damages.
Crisostomo v. CAFacts:
Estela L. Crisostomo contracted the services of Caravan Travel and ToursInternational (CTTI) in order to
arrange and facilitate her booking, ticketing and accommodations
for a tour dubbed “Jewels of Europe” 
The entire package cost P74, 322.70, which includes booking airfare
Because here niece Meriam Menor was ticketing manager for the company, she wasgiven discounts
On June 12, 1991, a Wednesday, Menor went to her aunt’s house to deliver the planetickets and other travel documents.
She told her aunt that her flight would be onSaturday 
Crisostomo did not bother to look at the tickets or travel documents to confirm this,but went to to the airport on Saturday morning, only to be informed that her flighttook off the day before
She complained to Menor, who afterwards prevailed upon her aunt to take anothertour called “British Pageant,” which cost P20,881.00
She paid a partial payment of $300 and went on the trip
Upon coming back, she refused to pay the remainder of the amount, and insteadasked for the reimbursement of the difference between the P74, 322.70 she paid forthe first trip and the balance for the second trip CTTI refused saying that the sumwas non-refundable
Due to their refusal, Crisistomo filed a complaint for
breach of contract of carriage and damages
She alleges that she deserves the reimbursement because:1.her failure to go on the first trip was respondent’s failure to clearly indicate thedeparture date on the plain ticket2.the company was also negligent in misinforming her about the flight schedule3.the “British Pageant Tour” was only a substitute for the “Jewels of Europe” tour,and, therefore, the cost of the former should be set-off against the sum paid forthe latter
CTTI prayed that petitioner be ordered to pay the balance of P12, 901.00
It, alleges that:1.departure date was clearly and legibly indicated on the plane ticket2.the ticket and travel documents were delivered to Crisostomo 2 days before herdeparture date, giving her ample time to read and examine them3.her failure to join the tour was her own fault for not bothering to read o rconfirm her flight schedule as printed on the ticket4.it is an accepted industry practice to disallow refund because the cost of theentire package tour is determined by the minimum number of projectedparticipants
5.“British Pageant” tour was not a substitute, but rather a separate tour thatCrisostomo contracted after realizing her mistake for the first tour
Trial Court decided in favor of Crisostomo, but found her
guilty of contributorynegligence
, which is its basis for lowering the damages awarded
Both parties appealed to the CA, which found them both at fault 
However, it found Crisostomo more negligent because
as a lawyer and a well-traveled person, she should have known better than to simply rely on what  she was told 
CA ordered her to pay the balance because she had already
forfeited her right tothe “Jewels of Europe” tour 
She appealed to the SC, saying:
as a common carrier it failed to exercise the extraordinary diligence that the lawrequires from it2.If she were negligent, it was only contributory and not the proximate cause of the damages she suffered
ISSUE: WON CTTI was required to exercise extraordinary diligence in fulfillingits obligation.HELD: NO. The contract involved is not one of carriage and transportation, noris CTTI a common carrier. It is but a travel agency and, therefore, itis only required to exercise the ordinary diligence of a good father of a family.
Contract of carriage or transportation – whereby a person or association of personsobligate themselves to transport persons, things, or news from one place to anotherfor a fixed price
Classified as private (or special) carriers andcommon (or public) carriers
Common carrier (accdg. to Art. 1732 of the CC)- persons or associations engaged inthe business of carrying or transporting passengers or goods or both by lane, wateror air for compensation, offering their services to the public
For reasons of public policy, common carriers are required to carry passengers as faras human care and foresight can provide using the
utmost diligence of a very cautious persons and with due regard for all circumstances
Art. 1755, CC
In this case, CTTI did not undertake to transport petitioner, it merely obligated itself to make travel arrangements, such as procuring tickets, facilitating travel permits orvisas, booking customers for tours, etc.
At most, it is merely an agent of the airline
There was only an ordinary contract between the parties, which only requires thediligence of a good father of a family (Art. 1173 of the CC) (
reasonable care of anordinarily prudent person
Fault or negligence consists in his failure to exercise due care and prudence in theperformance of the obligation as the
of the obligation demands. There is nofixed standard of diligence applicable to each and every contractual obligation. Ineach case, the degree of diligence requires depends on the circumstances of thespecific obligation and whether one has been negligent is a question of fact that is tobe determined after taking into account the particulars of each case
Where the ticket and travel documents were delivered sufficiently ahead scheduledflight, and where date and time of flight was legibly written of the plane ticket, CTTIexercised due diligence and performed all its obligations to enable Crisostomo to jointhe tour
Had petitioner exercised due diligence, there would have been no reason for her tomiss the flight. After travel papers were delivered to petitioner, it became incumbentupon her to take ordinary care of her concerns, which requires that she at least readthe documents to assure herself of the important details of her trip
The negligence of the obligor in the performance of the obligation renders him liablefor damages for the resulting loss suffered by the obligee.Therefore, petitioner is ordered to pay respondent the balance of the price of the “BritishPagent” tour with legal interest of 6% from the time the counterclaim was filed until thefinality of this Decision. After Decision becomes final and executory, the legal interestwould be 12% because the obligation is now the equivalent to a credit
Cetus Development Corp. v. CA
Ederlina Navalta, Ong Teng, Jose Liwanag, Leandro Canlas, Victoria Sudario,and Flora Nagbuya were the lessees of the premises located at No. 512 QuezonBoulevard, Quiapo, Manila, originally owned by the Susana Realty. Payments of the rentals were paid by the lessees to a collector of the Susana Realty whowent to the premises monthly
March 1984 - Susana Realty sold the leased premises to Cetus Development,Inc.
April to June 1984 – he lessees continued to pay their monthly rentals to acollector sent Cetus. For July, August and September the lessees failed to paytheir monthly individual rentals as no collector came.
October 9, 1984 – Cetus sent a letter to each of the lessees demanding thatthey vacate the premises and to pay the back rentals for the months of July toSeptember, within 15 days upon the receipt thereof. The lessees paid therespective arrearage in rent which were accepted by Cetus subject to theunilateral condition that the acceptance was without prejudice to the filing of anejectment suit. Subsequent monthly rental payments were likewise accepted.
The lessees failed to vacate he remises and as such the Cetus Inc. filed with theMTC of Manila complaints for ejectment. The lessees claimed that since theoccupancy of the premises they paid their monthly rental regularly through acollector of the lessor; that their non-payment of the rentals for the months of July, August and September, 1984, was due to the failure of the petitioner (asthe new owner) to send its collector; that they were at a loss as to where theyshould pay their rentals.
The MTC dismissed the cases. The acceptance of the back rental by the plaintiff before the filing of the complaint, as in this case, the alleged rental arrearageswere paid immediately after receipt of the demand letter, removes its cause of action in an unlawful detainer case, even if the acceptance was withoutprejudice.
Cetus appealed to the RTC and the case was dismissed for lack of merit.Issue
WON there exists a cause of action when the complaints for unlawful detainer. WON thelessees incurred delay in the performance of their obligation. NO
Section 2, Rule 70 provides:
Landlord to proceed against tenant only after demand 
. — No landlord or his legal representative or assign, shall be suchaction against a tenant for failure to pay rent due or to comply with theconditions of his lease, unless the tenant shall have failed to pay such rent orcomply with such conditions for a period of fifteen (15) days or five (5) days incase of building, after demand therefor, made upon qqqm personally, or byserving written notice of such demand upon the person found on the premises,or by posting such notice on the premises if no persons be found thereon.
The demand required here is a jurisdictional for the purpose of bringing anunlawful detainer suit for failure to pay rent or comply with the conditions of lease. It partakes of an extrajudicial remedy that must be pursued beforeresorting for judicial action so much so that when there is full compliance withthe demand, there arises no necessity for court action.
Section 2 presupposes the existence of a cause of action for unlawful detaineras it speaks of failure to pay rent due or comply with the conditions of thelease.
The existence of the cause of action gives the lessor the right under Article1659 of the New Civil Code to (1) ask for the rescission of the contract of leaseand indemnification for damages, or (2) only the latter, allowing the contract toremain in force. If the option chosen is (2) then the demand referred to is topay rent or to comply with the conditions of the lease violated. However, if (2)the demand must be for the lessee to pay rents or to comply with theconditions of the lease and to vacate. Accordingly, if rescission is clearly theoption taken, then both demands to pay rent and to vacate are necessary tomake a lessee a deforciant in order that an ejectment suit may be filed.
For the purpose of bringing an ejectment suit two requisites must concur:
there must be failure to pay rent or comply with the conditions of thelease
there must be demand both to pay or to comply and vacate withinthe periods specified in Section 2, Rule 70, namely 15 days in case of lands and 5 days in case of buildings.
In this case no cause of action for ejectment has accrued because there was nofailure on the part of the lessees to pay rents for three consecutive months
Petitioner has not shown that its case falls on any of the following exceptionswhere demand is not required:
when the obligation or the law so declares
when from the nature and circumstances of the obligation it can beinferred that time is of the essence of the contract
when demand would be useless, as when the obligor has rendered itbeyond his power to perform.
Article 1169 of the CC provides that; those obliged to deliver or to dosomething incur in delay from the time the obligee judicially or extrajudiciallydemands from them the fulfillment of their obligation. The demand requiredhere is different from the demand required by section 2 of Rule 70.
There was no proof that the petitioner demanded the payment of the rentalswhen the obligation matured. In addition no collector was sent. The lesseescannot be held guilty of mora solvendi or delay in the payment of rentals.
Demand to vacate was premature as it was an exercise of a non-existing rightto rescing.
The lessor is not obligated to send a collector but it has been customary for thelessees to pay the rentals through a collector. Art. 1257 provides that whereno agreement has been designated for the payment of the rentals, the place of payment is the domicile of the defendants.
Abella v. Francisco

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