LBC EXPRESS, INC. and LBC INTERNATIONAL, INC vs.

SPOUSES EUBERTO and SISINIA ADO

G.R. No. 161760 August 25, 2005
FACTS:
Euberto Ado was an overseas contract worker in Bahrain. Ado sent packages to Manila from Bahrain
through Al-Mulla Cargo & Packing, the agent of LBC in Bahrain. After the expiration of his contract, Ado took a 3month vacation in the Philippines. Upon arrival in Manila, Ado went to the office of LBC in Pasay City to inform LBC of
his arrival and retrieve the packages. While in said office, an employee of LBC suggested that Ado avail of customs
duty exemption for his packages but required Ado to entrust his passport to the said employee so that it may be
submitted to the Customs Office. Due to the promise of the employee that his passport would not be lost, Ado handed
his passport to the said employee. Later, the packages arrived at the residence of Ado but his passport was not
returned to him. Despite demands, LBC failed to deliver the passport to Ado. For this reason, Ado filed a complaint for
damages against LBC in RTC Naval, Biliran alleging that Ado failed to return to Bahrain because his passport was
lost due to the gross negligence of the employee of LBC. Ado presented as evidence the certification of his former
employer, the contents of which were:
This is to certify that Mr. Euberto Ado holder of Passport Number L 067892 was working
as a Mechanic at our Marine Workshop. He left Bahrain on 08.08.1995 to Manila on holiday for the
period of three months. He was getting the basic salary of BD 280.000 (Two hundred & Eighty)
only monthly.
He was holding the return visa for coming back to after having his leave. Mr. Euberto Ado
could not return back to Bahrain [as] his passport was misplace[d] in Manila.
For its defense, LBC answered that its containers were forcibly opened by unknown individuals and the passport of
Ado might have been stolen along with other articles. LBC faulted Ado for his loss as he failed to secure a
replacement visa. however, LBC failed to comment on the evidence presented by Ado and the court issued an Order
declaring that LBC had waived its right to adduce evidence and that the case was considered submitted for decision.
The court rendered judgment in favor of Ado, ordering LBC to pay Ado P480,000.00 in actual damages plus legal
interest; 300,000.00 in moral damages; 30,000.00 in attorneys fees, and the cost. On appeal CA affirmed the
decision. Hence this petition.

ISSUE:
Whether or not actual damages was duly proven.
HELD:
NO. One is entitled to actual or compensatory damages in the form of an adequate compensation for such
pecuniary losses suffered as has been duly proved.
In this case, The Court agreed contention of LBC that the respondents failed to adduce preponderant
evidence to prove that upon his return to Bahrain, he would be automatically employed by his former employer for a
period of two years and that he will be given the same job with the same compensation as provided for in his expired
employment contract. It is well-settled in our jurisdiction that actual or compensatory damages is not presumed, but
must be duly proved with reasonable degree of certainty. The party alleging a fact has the burden of proving it and a
mere allegation is not evidence. The only evidence adduced by Ado to prove that he had been granted a two-year reentry visa and that upon his return to Bahrain he would be automatically given a two-year employment contract was
Ados own testimony. Whether or not respondent Ados employer would automatically employ him upon his return to
Bahrain after his sojourn in the Philippines would depend entirely upon his employer. Ado failed to adduce any
evidence that his employer would give him his former position under the same terms and conditions stipulated in his
previous employment contract. There was no undertaking to automatically re-employ Ado for another two years upon
his return to Bahrain for a monthly salary of 280 Bahrain Dinars. The CA, thus, erred in affirming the award of actual
or compensatory damages of P480,000.00 to the respondent spouses.

Nevertheless, Ado was entitled to temperate damages of P10,000.00 under Article 2224 of the New Civil
Code. The Court found that an award of P50,000.00 as moral damages in favor of Ado was commensurate in this
case. Considering that LBC was guilty of bad faith and Ado was compelled to litigate, Ado was entitled to the amount
of P15,000.00 as attorneys fees. SC AFFIRMED the decision WITH MODIFICATION.

MARQUEZ vs. ESPEJO

facts

Espejos were the original registered owners of 2 parcels of agricultural land (2 ha each)

Lantap tenanted by PeachesNemi (who is the husband of Peaches Elenita)

Murong - tenanted by Sulan-at Marquez and Nestor Dela Cruz.

The respondents mortgaged both parcels of land to Rural Bank of Bayombong, Inc.. The mortgaged properties
were foreclosed and sold to RBBI.

RBBI eventually consolidated title to the properties and TCTs were issued in the name of RBBI.

TCT No. T-62096 dated Jan 14, 1985 was issued for the Murong property.

TCT No. T-62836 dated June 4, 1985 was issued for the Lantap property

Espejos bought back 1 of their lots from RBBI. (evidenced by TCT No. T-62096 )

The Deed of Sale did not mention the barangay where the property was located but mentioned the title of
the property (TCT No. T-62096), which title corresponds to the Murong property.

Respondents never took possession of the Murong property. Nemi continued working on the Lantap property. The
Deed of Sale was annotated on TCT No. T-62096 almost a decade later, on July 1, 1994.

RBBI executed separate Deeds of Voluntary Land Transfer (VLTs) in favor of Marquez and Dela Cruz. Both VLTs
described the subject as an agricultural land located in Barangay Murong and covered by TCT No. T-62836 (which,
however, is the title corresponding to the Lantap property).

After the petitioners completed the payment of the purchase price of P90K to RBBI, the DAR issued the
corresponding Certificates of Land Ownership Award (CLOAs) to Marquez and Dela Cruz.

Both CLOAs stated that their subjects were parcels of agricultural land situated in Barangay Murong.
let the chaos begin

Feb 10, 1997, respondents filed a Complaint before the RARAD of Bayombong. The complaint was based on
respondents theory that the Murong property was owned by the respondents by virtue of the 1985 buy-back.

RBBI answered that it was the Lantap property which was the subject of the buy-back transaction with Espejos.
OIC-RARAD Decision

Ruled in favor of Nemi. RARAD ruled that the VLTs (Murong property) has a mere typographical error.

RARAD declared that they were disqualified to become tenants of the Lantap property.
DARAB Decision

Respondents repurchased the Lantap property, not the Murong property (based on RBBI claim)
Ruling of the CA

DARAB erred in ruling that they repurchased the Lantap property, while the petitioners were awarded the Murong
property.

The title numbers indicated in their respective deeds of conveyance should control in determining the
subjects thereof.

Using the BER, the Deed of Sale is the best evidence as to its contents, particularly the description of the land
which was the object of the sale

The additional description in the VLTs that the subject thereof is located in Barangay Murong was considered to be
a mere typographical error.
Issue 1: Is it correct to apply the BER? no.

CA held that the Deed of Sale between respondents and RBBI is the best evidence as to the property.

Petitioners argue that the CA erred in using the BER to determine the subject of the Deed of Sale and the Deeds of
Voluntary Land Transfer. They maintain that the issue in the case is not the contents of the contracts but the
intention of the parties that was not adequately expressed in their contracts. Peaches

CA erred in its application of the BER. There is no room for the application of the BER because there is no dispute
regarding the contents of the docs.
ISsue 2: whether the admitted contents of these docs adequately and correctly express the true intention of the
parties.

Petitioners (and RBBI) maintain that while it refers to TCT No. T-62096, the parties actually intended the sale of the
Lantap property (covered by TCT No. T-62836).

Respondents contend that the reference to TCT No. T-62836 (corresponding to the Lantap property) reflects the
true intention of RBBI and the petitioners, and the reference to "Barangay Murong" was a typographical error.

This dispute reflects an intrinsic ambiguity in the contracts, arising from an apparent failure of the
instruments to adequately express the true intention of the parties. To resolve the ambiguity, resort must be
had to evidence outside of the instruments.

The PER excludes parol or extrinsic evidence by which a party seeks to contradict, vary, add to or subtract from
the terms of a valid agreement or instrument.

Respondents are not parties to the VLTs executed between RBBI and petitioners; they are strangers to the
written contracts.

Rule 130, Sec 9 specifically provides that PER is exclusive only as "between the parties and their successors-ininterest." The PER may not be invoked where at least one of the parties to the suit is not a party or a privy of a party

to the written doc in question, and does not base his claim on the instrument or assert a right originating in the
instrument.

The instant case falls under the exceptions to the PER, as provided in the 2nd par of Rule 130, Sec 9:
However, a party may present evidence to modify, explain or add to the terms of the written agreement if he puts in
issue in his pleading:

1.

An intrinsic ambiguity, mistake or imperfection in the written agreement;

2.

The failure of the written agreement to express the true intent and agreement of the parties thereto;

Guidance is provided by the ff Arts of the Civil Code involving the interpretation of contracts:

Art 1370. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the
literal meaning of its stipulations shall control. Peaches
If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former.

Art 1371. In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts
shall be principally considered.

Rule 130, Sec 13: For the proper construction of an instrument, the circumstances under which it was made,
including the situation of the subject thereof and of the parties to it, may be shown, so that the judge may be placed in
the position of those whose language he is to interpret.
issue 3: won reformation of their contract was necessary. no.

The subject of the Deed of Sale between RBBI and the respondents was the Lantap property, and not the Murong
property. The Murong property was in the possession of the petitioners without any objection from the respondents.
Petitioners paid leasehold rentals for using the Murong property to RBBI, not to the respondents.

Such a mistake is not farfetched considering that TCT No. T-62836 only refers to the Municipality of Bayombong,
Nueva Vizcaya, and does not indicate the particular barangay where the property is located. Both properties are
bounded by a road and public land. Hence, were it not for the detailed technical description, the titles for the 2
properties are very similar.

The respondents attempt to discredit petitioners argument that their VLTs were intrinsically ambiguous and failed to
express their true intention by asking why petitioners never filed an action for the reformation of their contract.

A cause of action for the reformation of a contract only arises when one of the contracting parties manifests an
intention, by overt acts, not to abide by the true agreement of the parties. Petitioners had no cause to reform their
VLTs because the parties thereto (RBBI and petitioners) never had any dispute as to the interpretation and
application thereof.

NATIONAL POWER CORPORATION vs. CODILLA

Facts: On april 20, 1996, M/V DibenaWinm being operated and owned by the herein private
respondent Bangpai shipping company under its hip agent Wallen shipping Inc., accidentally
bumped the power barge of the herein petitioner, NAPOCOR. The latter filed a complaint for
damages on april 26, 1996 before the sala of the herein public respondent judge. During the
presentation of evidence, the petitioner presented as pieces of evidence Xerox copies, to which
such was admitted by the court. Hoever, a motion to strike out the evidence was filed before the
court to which the court ordered that such pieces of evidence be stricken out of the records but
has to be attached to the documents for proper disposition by the appellate in case of appeal
before the latter. The petitioner aver that such documents be admitted for the basic reason that
such is within the purview of the electronic evidence.
Issue: Whether or not thepeices of evidence submitted by the petitioner be regarded within the
purview of the electronic evidence for the court be compelled to admit?
Held: No, the Supreme Court mentioned the following?
Section 1 of Rule 2 of the Rules on Electronic Evidence as follows:
"(h) "Electronic document" refers to information or the representation of information, data,
figures, symbols or other models of written expression, described or however represented, by
which a right is established or an obligation extinguished, or by which a fact may be proved and
affirmed, which is received, recorded, transmitted, stored, processed, retrieved or produced
electronically. It includes digitally signed documents and any printout, readable by sight or other
means which accurately reflects the electronic data message or electronic document. For the
purpose of these Rules, the term "electronic document" may be used interchangeably with
"electronic data message".
On the other hand, an "electronic document" refers to information or the representation of
information, data, figures, symbols or other models of written expression, described or however
represented, by which a right is established or an obligation extinguished, or by which a fact
may be proved and affirmed, which is received, recorded, transmitted, stored, processed,
retrieved or produced electronically.It includes digitally signed documents and any printout,
readable by sight or other means which accurately reflects the electronic data message or
electronic document.
The rules use the word "information" to define an electronic document received, recorded,
transmitted, stored, processed, retrieved or produced electronically. This would suggest that an
electronic document is relevant only in terms of the information contained therein, similar to any
other document which is presented in evidence as proof of its contents. However, what
differentiates an electronic document from a paper-based document is the manner by which the
information is processed; clearly, the information contained in an electronic document is
received, recorded, transmitted, stored, processed, retrieved or produced electronically.

A perusal of the information contained in the photocopies submitted by petitioner will reveal that
not all of the contents therein, such as the signatures of the persons who purportedly signed the
documents, may be recorded or produced electronically. By no stretch of the imagination can a
persons signature affixed manually be considered as information electronically received,
recorded, transmitted, stored, processed, retrieved or produced. Hence, the argument of
petitioner that since these paper printouts were produced through an electronic process, then
these photocopies are electronic documents as defined in the Rules on Electronic Evidence is
obviously an erroneous, if not preposterous, interpretation of the law. Having thus declared that
the offered photocopies are not tantamount to electronic documents, it is consequential that the
same may not be considered as the functional equivalent of their original as decreed in the law.
Section 2, Rule 130 of the Rules of Court:
"SECTION 2. Original writing must be produced; exceptions. There can be no evidence of a
writing the contents of which is the subject of inquiry, other than the original writing itself, except
in the following cases:
(a) When the original has been lost, destroyed, or cannot be produced in court;
(b) When the original is in the possession of the party against whom the evidence is offered,
and the latter fails to produce it after reasonable notice;
(c) When the original is a record or other document in the custody of a public officer;
(d) When the original has been recorded in an existing record a certified copy of which is made
evidence by law;
(e) When the original consists of numerous accounts or other documents which cannot be
examined in court without great loss of time and the fact sought to be established from them is
only the general result of the whole."
When the original document has been lost or destroyed, or cannot be produced in court, the
offeror, upon proof of its execution or existence and the cause of its unavailability without bad
faith on his part, may prove its contents by a copy, or by a recital of its contents in some
authentic document, or by the testimony of witnesses in the order stated. The offeror of
secondary evidence is burdened to prove the predicates thereof: (a) the loss or destruction of
the original without bad faith on the part of the proponent/offeror which can be shown by
circumstantial evidence of routine practices of destruction of documents; (b) the proponent must
prove by a fair preponderance of evidence as to raise a reasonable inference of the loss or
destruction of the original copy; and (c) it must be shown that a diligent and bona fide but
unsuccessful search has been made for the document in the proper place or places. However,
in the case at bar, though petitioner insisted in offering the photocopies as documentary
evidence, it failed to establish that such offer was made in accordance with the exceptions as
enumerated under the abovequoted rule. Accordingly, we find no error in the Order of the court
a quo denying admissibility of the photocopies offered by petitioner as documentary evidence.

Indeed the documents presented by the petitioner as evidence before the court were not within
the purview electronic document or electronic data message. It will be highly unacceptable to
regard an information manually written down to be regarded as electronic message. The
petitioner cannot aver now to submit the original copies of the documents since they were given
enough time to submit such but they refused to do so and insist that the photocopies be
admitted instead.
The high court denied such petition.

ORTANEZ VS. CA

Facts:
Private respondent Rafael Ortanez filed with the Quezon City RTC a complaint for annulment of
marriage with damages against petitioner Teresita Salcedo-Ortanez, on grounds of lack of marriage
license and/or psychological incapacity of the petitioner.
Among the exhibits offered by private respondent were three (3) cassette tapes of alleged telephone
conversations between petitioner and unidentified persons.
Teresita submitted her Objection/Comment to Rafaels oral offer of evidence. However, the trial
court admitted all of private respondents offered evidence and later on denied her motion for
reconsideration, prompting petitioner to file a petition for certiorari with the CA to assail the
admission in evidence of the aforementioned cassette tapes.
These tape recordings were made and obtained when private respondent allowed his friends from
the military to wire tap his home telephone.
CA denied the petition because (1) Tape recordings are not inadmissible per se. They and any other
variant thereof can be admitted in evidence for certain purposes, depending on how they are
presented and offered and on how the trial judge utilizes them in the interest of truth and fairness
and the even handed administration of justice; and (2) A petition for certiorari is notoriously
inappropriate to rectify a supposed error in admitting evidence adduced during trial. The ruling on
admissibility is interlocutory; neither does it impinge on jurisdiction. If it is erroneous, the ruling
should be questioned in the appeal from the judgment on the merits and not through the special civil
action of certiorari. The error, assuming gratuitously that it exists, cannot be anymore than an error
of law, properly correctible by appeal and not by certiorari.
Petitioner then filed the present petition for review under Rule 45 of the Rules of Court.

Issue:
W/N the recordings of the telephone conversations are admissible in evidence
W/N the remedy of certiorari under Rule 65 of the Rules of Court was properly availed of by the
petitioner in the Court of Appeals

Held:
1. No. Rep. Act No. 4200 entitled An Act to Prohibit and Penalize Wire Tapping and Other Related
Violations of the Privacy of Communication, and for other purposes expressly makes such tape
recordings inadmissible in evidence thus:
Sec. 1. It shall be unlawful for any person, not being authorized by all the parties to any private
communication or spoken word, to tap any wire or cable, or by using any other device or
arrangement, to secretly overhear, intercept, or record such communication or spoken word by using
a device commonly known as a dictaphone or dictagraph or detectaphone or walkie-talkie or taperecorder, or however otherwise described. . . .
Sec. 4. Any communication or spoken word, or the existence, contents, substance, purport, or
meaning of the same or any part thereof, or any information therein contained, obtained or secured
by any person in violation of the preceding sections of this Act shall not be admissible in evidence in
any judicial, quasi-judicial, legislative or administrative hearing or investigation.
Absent a clear showing that both parties to the telephone conversations allowed the recording of the
same, the inadmissibility of the subject tapes is mandatory under Rep. Act No. 4200.
2. Yes and no. The extraordinary writ of certiorari is generally not available to challenge an
interlocutory order of a trial court. The proper remedy in such cases is an ordinary appeal from an
adverse judgment, incorporating in said appeal the grounds for assailing the interlocutory order.
However, where the assailed interlocutory order is patently erroneous and the remedy of appeal
would not afford adequate and expeditious relief, the Court may allow certiorari as a mode of
redress.

ALVAREZ VS. RAMIREZ

FACTS:

Respondent Susan Ramirez was the complaining witness in a criminal case or arson
pending before the RTC. The accused was petitioner Maximo Alvarez, stranged
husband of Esperanza Alvarez, sister of respondent. On June 21, 1999, Esperanza
Alvarez was called to the witness stand as the first witness against petitioner, her
husband. Petitioner filed a motion to disqualify Esperanza from testifying against
him pursuant to Rule 130 of the Revised Rules of Court on marital disqualification.
Respondent filed an opposition to the motion. Pending resolution of the motion, the
trial court directed the prosecution to proceed with the presentation of the other
witnesses. On September 2, 1999, the trial court issued the questioned Order
disqualifying Esperanza Alvarez from further testifying and deleting her testimony
from the records. The prosecution filed a motion for reconsideration but was denied
in the other assailed Order dated October 19, 1999. This prompted respondent to
file with the Court of Appeals a petition for certiorari with application for preliminary
injunction and temporary restraining order. On May 31, 2000, the Appellate Court
rendered a Decision nullifying and setting aside the assailed Orders issued by the
trial court. Hence, this petition for review on certiorari.
ISSUE: Whether or not Esperanza can testify over the objection of her estranged
husband on the ground of marital privilege.
HELD:
Yes, Esperanza may testify over the objection of her husband. The disqualification of
a witness by reason of marriage under Sec. 22, Rule 130 of the Revised Rules of
Court has its exceptions as where the marital relations are so strained that there is
no more harmony to be preserved. The acts of the petitioner stamp out all major
aspects of marital life. On the other hand, the State has an interest in punishing the
guilty and exonerating the innocent, and must have the right to offer the testimony
of Esperanza over the objection of her husband.

BOSTON BANK OF THE PHILIPPINES VS. MANALO

FACTS:
1. Xavierville Estate, Inc. (XEI) sold to The Overseas Bank of Manila (OBM) some residential lots in
Xavierville subdivision. Nevertheless, XEI continued selling the residential lots in the subdivision as agent
of OBM.

2. Carlos Manalo, Jr. proposed to XEI, through its President Emerito Ramos (Ramos), that he will
purchase two lots in the Xavierville subdivision and offered as part of the downpayment the P34,887.66
Ramos owed him. XEI, through Ramos, agreed.
3. In a letter dated August 22, 1972 to Perla Manalo (Carlos wife), Ramos confirmed the reservation of
the lots. In the letter he also pegged the price of the lots at P348,060 with a 20% down payment of the
purchase price amounting to P69,612.00 (less the P34,887.66 owing from Ramos), payable as soon as
XEI resumes its selling operations; the corresponding Contract of Conditional Sale would then be signed
on or before the same date. Perla Manalo conformed to the letter agreement.
4. Thereafter, the spouses constructed a house on the property. The spouses were notified of XEIs
resumption of selling operations. However, they did not pay the balance of the downpayment because
XEI failed to prepare a contract of conditional sale and transmit the same to them. XEI also billed them for
unpaid interests which they also refused to pay. XEI turned over its selling operations to OBM.
5. Subsequently, Commercial Bank of Manila (CBM) acquired the Xavierville Estate from OBM. CBM
requested Perla Manalo to stop any on-going construction on the property since it (CBM) was the owner
of the lot and she had no permission for such construction. Perla informed them that her husband had a
contract with OBM, through XEI, to purchase the property. She promised to send CBM the documents.
However, she failed to do so. Thus, CBM filed a complaint for unlawful detainer against the spouses. But
later on, CBM moved to withdraw its complaint because of the issues raised. In the meantime, CBM was
renamed the Boston Bank of the Philippines.
6. Then, the spouses filed a complaint for specific performance and damages against the bank before the
RTC. The spouses alleged that they had always been ready and willing to pay the installments on the lots
sold to them but no contract was forthcoming. The spouses further alleged that upon their partial payment
of the downpayment, they were entitled to the execution and delivery of a Deed of Absolute Sale covering
the subject lots. During the trial, the spouses adduced in evidence the separate Contracts of Conditional
Sale executed between XEI and 3 other buyers to prove that XEI continued selling residential lots in the
subdivision as agent of OBM after the latter had acquired the said lots.
RTC :
The trial court ordered the petitioner (Boston Bank) to execute a Deed of Absolute Sale in favor of the
spouses upon the payment of the spouses of the balance of the purchase price. It ruled that under the
August 22, 1972 letter agreement of XEI and the spouses, the parties had a "complete contract to sell"
over the lots, and that they had already partially consummated the same.
CA:
The Court of Appeals sustained the ruling of the RTC, but declared that the balance of the purchase price
of the property was payable in fixed amounts on a monthly basis for 120 months, based on the deeds of
conditional sale executed by XEI in favor of other lot buyers.
Boston Bank filed a Motion for the Reconsideration of the decision alleging that there was no perfected
contract to sell the two lots, as there was no agreement between XEI and the respondents on the manner
of payment as well as the other terms and conditions of the sale. Boston Bank also asserts that there is
no factual basis for the CA ruling that the terms and conditions relating to the payment of the balance of
the purchase price of the property (as agreed upon by XEI and other lot buyers in the same subdivision)
were also applicable to the contract entered into between the petitioner and the respondents. CA denied
the MR.

ISSUES:
1.) Whether or not the factual issues raised by the petitioner are proper
2.) Whether or not there was a perfected contract to sell the property
3.) Whether or not the CA correctly held that the terms of the deeds of conditional sale executed by XEI in
favor of the other lot buyers in the subdivision, which contained uniform terms of 120 equal monthly
installments, constitute evidence that XEI also agreed to give the Manalo spouses the same mode and
timeline of payment. (Evidence, Disputable Presumptions, Habits and Customs Rule 130, Section 34)
HELD:
1.) YES. The rule is that before this Court, only legal issues may be raised in a petition for review on
certiorari. The reason is that this Court is not a trier of facts, and is not to review and calibrate the
evidence on record. Moreover, the findings of facts of the trial court, as affirmed on appeal by the Court of
Appeals, are conclusive on this Court unless the case falls under any of the following exceptions. 1 A
careful examination of the factual backdrop of the case, as well as the antecedental proceedings
constrains us to hold that petitioner is not barred from asserting that XEI or OBM, on one hand, and the
respondents, on the other, failed to forge a perfected contract to sell the subject lots.
2.) NO. In a contract to sell property by installments, it is not enough that the parties agree on the price as
well as the amount of downpayment. The parties must, likewise, agree on the manner of payment of the
balance of the purchase price and on the other terms and conditions relative to the sale. Even if the buyer
makes a downpayment or portion thereof, such payment cannot be considered as sufficient proof of the
perfection of any purchase and sale between the parties. A contract of sale is perfected at the moment
there is a meeting of the minds upon the thing which is the object of the contract and the price. The
agreement as to the manner of payment goes into the price, such that a disagreement on the manner of
payment is tantamount to a failure to agree on the price. We have meticulously reviewed the records,
including Ramos February 8, 1972 and August 22, 1972 letters to respondents and find that said parties
confined themselves to agreeing on the price of the property (P348,060.00), the 20% downpayment of the
purchase price (P69,612.00), and credited respondents for the P34,887.00 owing from Ramos as part of
the 20% downpayment. Based on these two letters, the determination of the terms of payment of the
P278,448.00 had yet to be agreed upon on or before December 31, 1972, or even afterwards, when the
parties sign the contract of conditional sale. So long as an essential element entering into the proposed
obligation of either of the parties remains to be determined by an agreement which they are to make, the
contract is incomplete and unenforceable.
3.) NO. The bare fact that other lot buyers were allowed to pay the balance of the purchase price of lots
purchased by them in 120 or 180 monthly installments does not constitute evidence that XEI also agreed
to give the respondents the same mode and timeline of payment. Under Section 34, Rule 130 of the
Revised Rules of Court, evidence that one did a certain thing at one time is not admissible to prove that
he did the same or similar thing at another time, although such evidence may be received to prove habit,
usage, pattern of conduct or the intent of the parties. Habit, custom, usage or pattern of conduct must be
1

(1) when the conclusion is a finding grounded entirely on speculations, surmises and conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible;

(3) where there is a grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of
Appeals, in making its findings went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) when the findings are contrary
to those of the trial court; (8) when the findings of fact are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as
well as in the petitioners main and reply briefs are not disputed by the respondents; and (10) when the findings of fact of the Court of Appeals are premised on the supposed
absence of evidence and contradicted by the evidence on record. We have reviewed the records and we find that, indeed, the ruling of the appellate court dismissing petitioners
appeal is contrary to law and is not supported by evidence.

proved like any other facts. The offering party must establish the degree of specificity and frequency of
uniform response that ensures more than a mere tendency to act in a given manner but rather, conduct
that is semi-automatic in nature. The offering party must allege and prove specific, repetitive conduct that
might constitute evidence of habit. The examples offered in evidence to prove habit, or pattern of
evidence must be numerous enough to base on inference of systematic conduct. Mere similarity of
contracts does not present the kind of sufficiently similar circumstances to outweigh the danger of
prejudice and confusion. In determining whether the examples are numerous enough, and sufficiently
regular, the key criteria are adequacy of sampling and uniformity of response. It is only when examples
offered to establish pattern of conduct or habit are numerous enough to lose an inference of systematic
conduct that examples are admissible. Respondents failed to allege and prove that, as a matter of
business usage, habit or pattern of conduct, XEI granted all lot buyers the right to pay the balance of the
purchase price in installments of 120 months of fixed amounts with pre-computed interests, and that XEI
and the respondents had intended to adopt such terms of payment relative to the sale of the two lots in
question. Indeed, respondents adduced in evidence the three contracts of conditional sale executed by
XEI and other lot buyers merely to prove that XEI continued to sell lots in the subdivision as sales agent
of OBM after it acquired said lots, not to prove usage, habit or pattern of conduct on the part of XEI to
require all lot buyers in the subdivision to pay the balance of the purchase price of said lots in 120
months.

LEA MER INDUSTRIES, INC vs. MALAYAN INSURANCE CO., INC.

Facts:
Vulcan Industrial and Mining Corporation ordered 900 metric tons of silica sand valued at P565,000 from
Ilian Silica Mining.
Ilian Silica Mining entered into a contract of carriage with Lea Mer Industries, Inc., for the shipment of the
said order. The cargo was to be transported from Palawan to Manila.
On October 25, 1991, the silica sand was placed on board Judy VII, a barge leased by Lea Mer. During
the voyage, the vessel sank, resulting in the loss of the cargo.
Malayan Insurance Co., Inc., as insurer, paid Vulcan t P565,000, the value of the lost cargo. To recover
the amount paid and in the exercise of its right of subrogation, Malayan demanded reimbursement from
Lea Mer, which refused to comply.
Thus, Malayan sued Lea Mer for the collection of money. However, the RTC dismissed the Complaint,
upon finding that the cause of the loss was a fortuitous event. It ruled that the vessel had sunk because of

the bad weather condition brought about by Typhoon Trining and that petitioner had no knowledge of the
incoming typhoon, and that the vessel had been cleared by the Philippine Coast Guard to travel from
Palawan to Manila.
But CA held that the vessel was not seaworthy when it sailed for Manila. Thus, the loss of the cargo was
occasioned by petitioner's fault, not by a fortuitous event.
Thus, Lea Mer filed a petition for review on CAs decision.
Issue: WON Lea Mer is liable to pay Malayan Insurer for lost cargo.
Held: YES.
Common carriers are persons, corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods, or both -- by land, water, or air -- when this service is offered to the
public for compensation. Petitioner is clearly a common carrier, because it offers to the public its
business of transporting goods through its vessels.

The Contract in this case was one of affreightment because it was petitioner's crew that manned the
tugboat M/V Ayalit and controlled the barge Judy VII. Necessarily, petitioner was a common carrier, and
the pertinent law governs the present factual circumstances.
Common carriers are bound to observe extraordinary diligence in their vigilance over the goods and
the safety of the passengers they transport, as required by the nature of their business and for reasons of
public policy.

Common carriers are presumed to have been at fault or to have acted negligently for loss or
damage to the goods that they have transported. This presumption can be rebutted only by proof that
they observed extraordinary diligence, or that the loss or damage was occasioned by any of the following
causes. (pls. check what provision ni..)
(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.

To excuse the common carrier fully of any liability, the fortuitous event must have been the
PROXIMATE and ONLY cause of the loss. Moreover, it should have exercised due diligence to prevent
or minimize the loss before, during and after the occurrence of the fortuitous event.

As a common carrier, petitioner bore the burden of proving that it had exercised extraordinary
diligence to avoid the loss, or that the loss had been occasioned by a fortuitous event -- an exempting
circumstance.
The evidence of fortuitous event presented by petitioner was insufficient. It was not enough for the
common carrier to show that there was an unforeseen or unexpected occurrence. It had to show that it
was free from any fault -- a fact it miserably failed to prove.

It did not present evidence that it had attempted to minimize or prevent the loss before, during or after the
alleged fortuitous event.
Also, the alleged fortuitous event was not the sole and proximate cause of the loss. There is a
preponderance of evidence that the barge was not seaworthy when it sailed for Manila. In the hull of the
barge, there were holes that might have caused or aggravated the sinking.
Additional Important discussions from the case:
1. Charter parties are classified as contracts of demise (or bareboat) and affreightment, which are
distinguished as follows:
Under the demise or bareboat charter of the vessel, the charterer will generally be
considered as owner for the voyage or service stipulated. The charterer mans the vessel
with his own people and becomes, in effect, the owner pro hac vice, subject to liability to
others for damages caused by negligence. To create a demise, the owner of a vessel
must completely and exclusively relinquish possession, command and navigation thereof
to the charterer; anything short of such a complete transfer is a contract of affreightment
(time or voyage charter party) or not a charter party at all.
The distinction is significant, because a demise or bareboat charter indicates a business undertaking that is private in
character. Consequently, the rights and obligations of the parties to a contract of private carriage are governed principally
by their stipulations, not by the law on common carriers.

2. Article 1174 of the Civil Code provides that 'no person shall be responsible for a fortuitous event
which could not be foreseen, or which, though foreseen, was inevitable. Thus, if the loss or
damage was due to such an event, a common carrier is exempted from liability.
Jurisprudence defines the elements of a 'fortuitous event as follows: (a) the cause of the unforeseen
and unexpected occurrence, or the failure of the debtors to comply with their obligations, must have been
independent of human will; (b) the event that constituted the caso fortuito must have been impossible to
foresee or, if foreseeable, impossible to avoid; (c) the occurrence must have been such as to render it
impossible for the debtors to fulfill their obligation in a normal manner; and (d) the obligor must have been
free from any participation in the aggravation of the resulting injury to the creditor.