SARMIENTO V CABRIDO Corona, J.; April 9, 2003 G.R. No.

141258

FACTS: Sometime in April, 1994, Tomasa Sarmiento was asked by Dra. Virginia Lao to find someone to reset a pair of diamond earrings into two gold rings. Sarmiento sent Tita Payag with the pair to Dingdings Jewelry shop, owned and managed by spouses Luis and Rose Cabrido, and accepted the job order for Php 400.00. Sarmiento provided 12 grams of gold for crafting the ring settings, and three days later, Payag delivered to the shop one of the earrings (worth .33 carat, almost perfect in cut and clarity). Ma. Lourdes Suntried to dismount the diamond from the original setting. She failed and asked Zenon Santos to do it. Santos used a pair of pliers to twist the setting and in the process, broke the gem. Sarmiento asked the Cabridos to replace the diamond with the same size and quality, but they refused, forcing the former to buy a replacement herself worth Php 30,000.00. Sarmiento filed a complaint for damages against the Cabridos and Sun. DEFENSE: Rose Cabrido denied transaction with Payag. Marilou and Santos denied being employees of the shop. MTC of Tagbilaran ruled in favor of Sarmiento. RTC however reversed the decision, the reversal of which was affirmed by the CA.

Issues: Held: YES. YES! Whether or not Santos and Sun are employees of the Cabridos Whether or not there was an obligation assumed by the respondents under the contract of service

Petition GRANTED. CA Decision Reversed and Set Aside. Cabridos ordered to pay Php 30,000.00 as actual damages and Php 10,000.00 as moral damages.

Ratio: Facts show that Santos has been working at the shop as a goldsmith for 6 months. Payag also testified that she had transacted at least 10 times before in the shop, always through Sun. Evidence prove that both are employed at the shop to perform activities necessary or desirable in its business. SC was inclined to agree with the MTCs giving credence to Sarmientos contentions since they had the opportunity to observe the behavior and demeanor of the witnesses AND the respondents inconsistent position impugns their credibility (first, they denied existence of any transaction, but they changed and acknowledged the transaction, but denied that dismounting the diamond from the original setting is not part of it). Sun expressed no reservation regarding the dismounting of the diamond which is an INTEGRAL PART OF THE JOB ORDER. Sun examined it, tried to dismount it herself and gave the task to Santos. Acting like that, she cannot deny the obligation of the shop to reset the pair of earrings. Considering the established facts Obligations arising from contracts have the force of law b/w contracting parties. 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 liable for damages. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. Santos clearly acted with negligence. He should have used a miniature wire saw instead of pliers in dismounting the diamond. The shop falide to perform its obligation with the ordinary diligence required by the circumstances. RES IPSA LOQUITOR (His negligence in using the wrong equipment) Moral Damages were also awarded since MDs can be awarded in a breach of contract if there is proof that the defendants acted with bad

faith or guilty of gross negligence or in wanton disregard of his contractual obligation. Santos had 40 years of experience as a goldsmith and should have known he was using the wrong equipment which entailed an unnecessary risk of breakage, but he went on anyway. Basis for award of attorney fees negated. Respondents had an honest belief that they were not responsible, which is why they refused to pay.

Julio Abella V Guillermo Francisco Avancena, J.; December 20,1930 G.R. No. 32336

FACTS: Guillermo Francisco purchased from the govt. on installments, lots 937 to 945 of the Tala Estate in Novaliches, Caloocan, Rizal. He was in arrears for some of these installments. On October 31, 1928, he signed a document that stated he received from Juloi Abella Php 500 as payment for the said lots (221 hectares) at the rate of 100 per hectare, with the balance due on Dec. 15, 1928, extendible 15 days after.

Issues:

Abella then proposed sale of these lots at a higher price to George C. Sellner and collecte Php 10,000 on Dec. 29, 1928. On Nov. 13,1928, Abella paid another Php 415.31 upon demand. On Dec. 27, 1928, Francisco wrote to Roman Mabanta attaching a power of attorney authorizing the latter to sign in his behalf documents required by the Bureau of Lands for the transfer of lands to the plaintiff. He also instructed Mabanta that in the event Abella failed to pay the remaining balance, the option will be considered cancelled, and the Php 915.81 already given shall be returned. On Jan. 3, 1929, Mabanta notified Abella of the situation and gave him until Jan. 5 to pay. Abella tried to pay the remaining balance on Jan. 9 but Mabanta refused to accept it, since he regarded the contract rescinded for the failure to pay on Jan. 5. The Php 915.81 was returned to Abella. Abella filed a complaint. CFI-Rizal absolved Francisco.

Held: Ratio:

Whether or not Francisco can be compelled to execute the deed of sale of the lots in question upon receipt of the balance and to deliver them to Abella. Whether or not Abella can be judicially declared the owner of said lots. No. NO! Petition DENIED. CFI-Rizal decision AFFIRMED.

Abella failed to pay the price of the lots within the stipulated time. Since the contract was an option for the purchase of the lots, time was an essential element in an agreement of this nature. Abellas claim that Mabanta extended the deadline to Jan 9 cannot hold. Mabantas statement that it was only until Jan. 5 is corroborated by Paz Vicente and Narciso Javier (Abella admitted the fact to him) AND even supposing it was a sale time was still an essential element since Francisco wanted to sell those lots to pay off obligations due on December, 1928. Under Civil Code 1124, he is entitled to resolve the contract for failure to pay the price within the time specified.

Victorino Magat V Hon. Leo Medialdea Avancena, J.; December 20,1930 G.R. No. 32336

FACTS: Sometime in September 1972, Santiago Guerrero entered into a contract with the US Navy Exchange, Subic Bay, Philippines for the operation of a fleet of taxicabs, each with the necessary taximeter and radio transceiver. Isidro Aligada, as agent of Guerrero, approached Victorino Magat and proposed to import from Japan through Magat or his Japanese business associates all taximeters and radio transceivers needed. Guerrero was able to import the needed taximeters with the help of Magat, free of charge. Aligada, for the task of procuring the needed radio transceivers, secured a firm offer in writing dated September 25, 1972, with offer of $ 77,620.59 FOB Yokohama. The goods are to be delivered 60-90 days after receipt of what radio frequency is assigned. Magat received notice that Guerrero accepted the offer and took steps to ensure promised delivery will not be delayed. On Oct. 7, 1972, Magat was advised in a letter from Aligada of the radio frequency and that the order shall proceed to be fulfilled only upon receipt of letter of credit of the defendant. Guerrero fails and refuses to open the letter of credit to cover payment of the goods. He also implied that the delay of the RCs is Magats fault, destroying the latters reputation. Magat, thru his counsel asked Guerrero if the contract will be continued or cancelled. The latter did not reply. Magat file a complaint. CFI-Rizal dismissed the complaint for lack of cause of action. Reason: Premise is not on any loss or damage actually suffered but on a non-existing loss pr damage expected to incur in the near future.

Issues:

 Held:

Whether or not complaint lacked a cause of action and should be dismissed. NO! Petition GRANTED. CFI-Rizal decision SET ASIDE Case REMANDED to court of origin for further proceedings.

Ratio: Test of legal sufficiency of the cause of action was adequately satisfied. The complaint recites the circumstances that led to the perfection of the contract entered by the two parties. It showed that Magat performed his part while Guerrero failed to comply with his correlative obligation by refusing to open a letter of credit and that Magat suffered not only loss of expected profits but moral and exemplary damages as well. The essential elements of a cause of action are present: o Existence of a legal right to the plaintiff o Correlative duty of the defendant o Act or omission of the defendant in violation of Plaintiffs right with consequent injury to the latter, for which he may maintain an action for recovery of damages or other appropriate belief Both entered the contract with evident intention of deriving profits. Upon breach of contract, Magat suffered loss of his expected profits which comes into being at the very moment of breach. Such loss is real, fixed and vested and recoverable under the law. Under Civil Code 1170, any illicit act or omission which impairs strict and faithful fulfillment of the obligation and every kind of defective performance is liable for damages under in any matter contravene the tenor. Damages which obligor is liable for includes the loss suffered by the obligee and the profits he failed to obtain. If he acted in GOOD FAITH, hes liable for damages which are natural and probable consequences of the breach which the parties have foreseen at the time obligation was constituted. If in BAD FAITH, hes liable for ALL damages reasonably attributed to the non-performance of the obligation. In this case, complaint sufficiently alleges bad faith of Guerrero.