Professional Documents
Culture Documents
Obligations and Contracts Cases
Obligations and Contracts Cases
AND BUSINESS
AND BUSINESS
AND BUSINESS
benefit enjoyed by petitioner was merely Court denies petition for there was no error in
insignificant or incidental. the CAs ruling. RTCs decision was treated as
final order. The court is also not prepared to be
It is unfair to deny petitioner a refund of all his lenient in petitioners case. The case was filed
contribution stressing Article 22 of the Civil on 2005 while foreclosure happened on 1987.
Code. IN the absence of specific terms and Petitioners long inaction cannot earn sympathy
conditions, a quasi-contractual agreement or of the court.
relation was created between the parties and
under Article 2142: Certain lawful, voluntary Because respondent did not deny the issuance
and unilateral acts give rice to the juridical of O.R. for the petitioners payment of Php
relation of quasi contract to the end that no one 6,000.00, they are obliged to return it stating
shall be unjustly enriched or benefited at the Article 2154 of CC;
expense of another.
If something is received when there is no right
Petition was partially granted, granting the to demand it, and it was unduly delivered
refund of Php 112,500.00 to petitioner. through mistake, the obligation to return arises.
Solutio Indebiti
VENZON VS. RURAL BANK OF
BUENAVISTA, G.R. NO. 178031 AUGUST Wherefore, petition is denied. However, the
28, 2013 bank must return Php 6,000.00 with an interest
of 6% per annum computed from filing of
FACTS: petition.
Virginia and George Venzon applied for a loan
for Php 5000.00 with their house at Libertad, DY CS. PEOPLE, G.R. NO. 189081
Butuan as the mortgage. In the duration of the AUGUST 10, 2016
said loan, she was able to pay Php 2,300.00.In
March 1987, she offered to pay in full but the FACTS:
bank refused and shoved her out of the Gloria Dy is the General Manager of MCCI.
premise. The bank foreclosed the mortgage at William Mandy Proposed to purchase the
the amount of Php 6, 472.76 to itself (the bank). property owned by PANTRANCO. Mandy
loaned Php 20,000,000.00 in ICBC, with an
Petitioner says that foreclose is null and void for evidence of a promissory note, and the
the following reasons: warehouse in the Numancia property placed
Lack of Notice and Publication of Sale into chattel mortgage.
Lack of Certification by Sherriff
That she paid Php 6,000.00 on October MCCI received notice of foreclosure over the
9, 1995 with an Official Receipt mortgaged property and in order to avoid such,
Mandy instructed petitioner, Gloria Dy, to
Respondent replied: facilitate payment. Mandy issued;
Denied the allegations of the petitioner 13 Allied Bank Checks; and
That the petitioners cause of action 12 AsiaTrust Bank Checks
already prescribed (March 1987 Petitioner alleged that she just encashed the
foreclosure to filing of suit on 2005, 18 checks and gave the cash to William Mandy.
years gap.) ICBC foreclosed the property and this is how
Mandy knew that not a single check was
That petitioner is guilty of Laches
delivered. Mandy filed ESTAFA against Dy.
RTC dismissed the case. RTC stated R.A. 720
RTC acquitted petitioner. Mandy and Dy
or the Rural Bank Act that a property not
entered into a Contract of Loan which failed to
exceeding Php 10,000.00 is exempted for
establish an important element of Estafa which
requirement of Publication.
is Misappropriation, thus, acquitting Gloria Dy
CA dismissed the petition for it was belatedly
with Estafa with Cost de Officio.
filed.
CA affirmed the RTCs decision.
ISSUE:
1. CA erred in dismissing petition
ISSUE:
preventing the court in finding that there
WON acquittal on a criminal case will also
was no issued certificate by Sherriff.
extinguish Civil Liability?
2. CA erred in disregarding Technicalities.
HELD:
HELD:
Yes, because criminal liability was extinguished,
then there should be no Civil Liability and also
AND BUSINESS
taking into consideration that Estafa was not By fair intendment, the term final judgment
committed. employed in the Revised Penal Code means
judgment beyond recall. Really, as long as a
PEOPLE VS. BAYOTAS G.R. NO. 102007 judgment has not become Executory, it cannot
SEPTEMBER 2, 1994 be truthfully said that defendant is definitely
guilty of the felony charged against him.
FACTS:
Rogelio Bayotas was charged with rape and People vs. Castillo
eventually convicted thereof on June 19, 1991.
Upon pending appeal of his conviction, Bayotas
died on February 4, 1992 at National Bilibid
Hospital due to cardiac arrest. The SC From this lengthy disquisition, we summarize
dismissed the criminal aspect of the appeal, our ruling herein:
however required the OSG to file its comment
with regards to Bayotas Civil Liability arising
from the commission of the offense.
OSG, on his comment, said that the death of 1. Death of the accused pending appeal of his
the accused did not extinguish the civil liability. conviction extinguishes his criminal liability as
well as the civil liability based solely thereon.
Counsel of the accused apposed the view of the
OSG arguing that the death of the accused
while judgement of conviction is on pending
appeal extinguishes both civil and criminal
2. The claim for civil liability survives
liabilities.
notwithstanding the death of accused, if the
ISSUE: same may also be predicated on a source of
Does death of the accused on pending appeal obligation other than delict. (Article 1157)
of his conviction extinguish his civil liability?
Is it final judgment as
contradistinguished from an
interlocutory order? Or, WHEREFORE, the appeal of the late Rogelio
Bayotas is DISMISSED with costs de oficio.
is it a judgment which is final and
Executory?
AND BUSINESS
METROBANK VS. ROSALES AND YO the bank later discovered that the serial
YUK TO G.R. NO. 183204 JANUARY 13, numbers of the dollar notes deposited
2014 by respondents in the amount of
US$11,800.00 were the same as those
Respondent Ana Grace Rosales (Rosales) is withdrawn by the impostor.
the owner of China Golden Bridge Travel Respondent (Rosales) said that:
Services, a travel agency. Respondent Yo Yuk He denies taking part of such fraudulent
To is the mother of respondent Rosales. In act and that he did not go to the bank on
2000, respondents opened a Joint Peso February 5, 2003 and neither did she
Account with petitioners Pritil-Tondo Branch. As inform Gutierrez that Liu Chiu Fang was
of August 4, 2004, respondents Joint Peso going to close her account. Furthermore,
Account showed a balance of P2,515,693.52. after helping Liu Chiu Fang set up the
account, she lost track or contact of her.
In May 2002, respondent Rosales accompanied On February 6, 2003, she received a
her client Liu Chiu Fang, a Taiwanese National call from Gutierrez that Liu Chiu Fang
applying for a retirees visa from the Philippine was closing her account and on that
Leisure and Retirement Authority (PLRA), to afternoon she went to the bank to make
petitioners branch in Escolta to open a savings a transaction. While transacting, she
account, as required by the PLRA. Since Liu saw on the desk of Branch Operating
Chiu Fang could speak only in Mandarin, Officer Melinda Perez. Rosales
respondent Rosales acted as an interpreter for approached Perez who informed her
her. that Liu Chiu Fang had closed her
account and had already left and Perez
even gave her a copy of the withdrawal
On March 3, 2003, respondents opened with clearance from PLRA.
petitioners Pritil-Tondo Branch a Joint Dollar On June 16, 2003, Rosales received a
Account with an initial deposit of US$14,000.00. call from Liu Chiu Fang inquiring about
the extension of her PLRA Visa and her
Dollar Account which made Rosales
On July 31, 2003, petitioner issued a "Hold Out" realize that her account was closed
order against respondents accounts. without her (Liu Chiu Fangs)
knowledge.
On September 3, 2003, petitioner, through its
Rosales went to the bank and informed
Special Audit Department Head Antonio Ivan
Gutierrez and Perez about the
Aguirre, filed before the Office of the Prosecutor
unauthorized withdrawal.
of Manila a criminal case for Estafa through
False Pretences, Misrepresentation, Deceit, On June 23, 2003, Rosales and Liu Chiu
and Use of Falsified Documents against Fang went to PLRA and they were
respondent Rosales. informed that the Withdrawal Clearance
was issued based on an SPA executed
Petitioner said that: by Liu Chiu Fang in favor of Richard So
Rosales and an unidentified woman in which Liu Chiu Fang denied in
executing such.
were the one responsible for the
unauthorized withdrawal of Following day, Liu Chiu Fang, Rosales,
US$75,000.00 from Liu Chiu Fangs Gutierrez and Perez met at PLRA office
account at Escolta Branch to discuss the matter and during the
On February 5, 2003, in Escolta branch, conference the bank officers assured Liu
Chiu Fang that the money would be
they received from PLRA a Withdrawal
returned to her.
Clearance for the dollar account of Liu
Office of the City Prosecutor of Manila issued a
Chiu Fang and on that afternoon the
Resolution dismissing the criminal case for lack
petitioner talked with the Branch Head
of probable cause.
(Gutierrez) that Liu Chiu Fang was going
to withdraw her dollar deposit in cash
Respondents filed to the RTC of Manila a
and that Gutierrez told respondent to
complaint for Breach of Obligations and
come back the following day because
Contract with Damages against petitioner.
they ran out of dollar bills
Respondents alleged that they were unable to
On the following day, respondent
withdraw their deposit because petitioner
accompanied an impostor of Liu Chiu placed their accounts under Hold Out status.
Fang and was able to deposit the No explanation was given by the petitioner thus
US$75,000.00 they prayed that the Hold Out order be lifted for
On March 3, 2003, respondents opened them to be allowed to withdraw their deposits
a dollar account with petitioner and that
AND BUSINESS
and also claim for actual, moral and exemplary obligation, there was no legal basis for
damages, as well as attorneys fees. petitioner to issue the "Hold Out" order.
2. Has no bearing in the resolution of this
Petitioner alleged that respondents have no case. Thus, we find no need to discuss
cause of action because it has a valid reason the same.
for issuing the Hold Out order due to the 3. Because petitioner is guilty of breach of
fraudulent scheme thus they had to reimburse contract when they unjustifiably refused
Liu Chiu Fang for the amount of US$ 75,000.00 to release respondents deposit,
and for the criminal complaint of Estafa against petitioner is liable for damages.
respondent. Respondents are entitled to moral and
exemplary damages and also attorneys
RTC ruled that the petitioner is liable for fees.
damages for breach of contract. RTC said that it
is the duty of the petitioner to release the
deposit of respondent and that fraudulent act In closing, it must be stressed that while we
would have not prospered if not of the recognize that petitioner has the right to protect
negligence of its employees and not against itself from fraud or suspicions of fraud, the
respondent. Metrobank is therefore ordered to
exercise of his right should be done within the
remove Hold Out order with Actual Damages of
Php 50,000.00, moral damages of Php bounds of the law and in accordance with due
50,000.00, exemplary damages of Php process, and not in bad faith or in a wanton
30,000.00 and 10% for the attorneys fees plus disregard of its contractual obligation to
cost of suit. respondents.
CA affirmed RTCs decision deleting the award WHEREFORE, the Petition is hereby DENIED.
for actual damages for the basis of such claim
The assailed April 2, 2008 Decision and the
is for the professional fee that they paid to their
legal counsel against criminal complaint of May 30, 2008 Resolution of the Court of
Estafa and not in connection to this case. Appeals in CA-G.R. CV No. 89086 are hereby
AFFIRMED. SO ORDERED.
ISSUE:
1. WON CA erred in ruling that Hold-Out
provision does not apply in this case?
NO
2. WON CA erred when it ruled that DRA. DELA LLANA VS. BIONG, G.R. NO.
petitioners employees were negligent in 182356 DECEMBER 4, 2013
releasing Liu Chiu Fangs funds? (Has
no bearing in the resolution of this case. FACTS:
Thus, we find no need to discuss the March 30, 2000, Juan dela Llana was driving a
same.) 1997 Toyota Corolla along North Ave., Quezon
3. WON CA erred in affirming the award of City. Dra. Llana (Juans Sister) was seated in
Moral and Exemplary Damages and the front of the passengers seat and a certain
Attorneys fees? NO Calimlim at the back. The car stopped across
HELD: the Veterans Memorial Hospital when the traffic
1. The Hold Out clause does not apply to light turned red and suddenly a dump truck
the instant case. The "Hold Out" clause rammed the cars rear end and due to the
applies only if there is a valid and impact the cars rear end collapsed and its rear
existing obligation arising from any of windshield was chattered which cause glass
the sources of obligation enumerated in splinters to flew and puncturing Dra. Dela Llana
Article 1157 of the Civil Code. In this but, apart from the minor wound, Dra. Dela
case, petitioner failed to show that Llana did not suffer any other visible physical
respondents have an obligation to it injuries.
under any law, contract, quasi-contract,
delict, or quasi-delict. Although a According to the traffic investigation, it was
criminal case was filed by petitioner identified that Joel Primero, the Dump Truck
against respondent Rosales, this is not driver, was recklessly imprudent in driving the
enough reason for petitioner to issue a truck. Joel was the employee of Rebecca Biong
"Hold Out" order as the case is still who owns Pongkay Trading.
pending and no final judgment of
conviction has been rendered against In the first week of May 2000, Dra. Dela Llana
respondent Rosales. Thus, considering began to feel pain on the left side of her neck
that respondent Rosales is not liable and shoulders. Her injury became more severe
under any of the five sources of that to the extent that she could no longer move
AND BUSINESS
her left arm. She consulted Dra. Rosalinda Milla Llana did not immediately visit a hospital to
and later on it was discovered that she suffered check if she sustained internal injuries after
a whiplash injury. Dra. Milla advised her to accident. The medical certificate was given no
undergo physical therapy yet Dra. Dela Llanas value for it did not explain how and why the
condition did not improve despite of three vehicular accident caused the injury.
months of extensive physical therapy.
ISSUE:
Dra. Dela Llana consulted other doctors who WON Joels reckless driving is the proximate
advised her to a cervical spine surgery to cause of Dra. Dela Llanas whiplash injury?
release the compression of her nerve. The
operation did not heal injury and it incapacitated HELD:
Dra. Dela Llana to practice her profession since SC found the petition unmeritorious. The issue
June 2000 until October 2000. involves a question of fact and as a general rule
The CAs findings of fact are final and
Dra. Dela Llana demanded from Rebecca the conclusive and this court will not review them
compensation for her injuries, but Rebecca on appeal. But as an exception, SC can only
refused. review the presented evidences when the
conflict exists in findings of the RTC and CA,
Dra. Dela Llana filed before the RTC to recover thus, this case is an exemption therefore SC
damages alleging that she spent Php can accordingly examine relevant evidences
150,000.00 for medical expenses, average of presented.
Php30,000.00 loss on her monthly salary since
June 2000 and further prayed for actual, moral In this case, Dra. Dela Llana failed to establish
and exemplary damages and also for attorneys her case by preponderance of evidence.
fees.
Under article 2176, the elements of Quasi-Delict
Rebecca argues that Dra. Dela Llana has no are:
cause of action against her for there was no 1. Damages to the plaintiff;
reasonable connection between the vehicular 2. Negligence, by act or omission, of the
accident and the injury. Also she pointed out defendant or by some person for whose
that said injury manifested one (1) month and acts the defendant must respond, was
one (1) week from the date of the accident and guilty; and
that Dra. Dela Llana was still physically fit and 3. The connection of cause and effect
strong when they met days after the vehicular between such negligence and the
accident. damages.
Dra. Lllana must first establish by
Dra. Dela Llana brought Joel Primero as her preponderance of evidence that the three (3)
hostile witness admitting that his truck hit the elements of quasi delict are present before we
car because the brakes got stuck. determine Rebeccas liability ad Joels
employer.
RTC ruled in favor of Dra. Dela Llana The Court
concluded that the three elements necessary to
establish Rebeccas liability were present: In civil cases, a party who alleges a fact has the
(1) That the employee was chosen by the burden of proving it. In the present case, the
employer, personally or through another; burden of proving the proximate causation
(2) That the services were to be rendered in
between Joels negligence and Dra. dela
accordance with orders which the employer had
the authority to give at all times; and Llanas whiplash injury rests on Dra. dela Llana.
(3) That the illicit act of the employee was on
the occasion or by reason of the functions Notably, Dra. dela Llana anchors her claim
entrusted to him. mainly on three pieces of evidence:
CA reversed the ruling of the RTC saying that (The picture of the damaged car only
Dra. Dela Llana failed to establish connection demonstrated the impact of the collision)
between accident and injury by preponderance
of evidence. Also, the interval between the (2) The medical certificate dated November 20,
collision and beginning of the symptoms was 2000, and
too lengthy and it also observed that Dra. Dela
AND BUSINESS
(The medical certificate cannot be its case two months after notice of his death.
considered because it was not admitted in Court issued an order dismissing the criminal
evidence) aspect of the case but reserving the rights to
resolve the civil aspect.
(3) Her testimonial evidence.
Judge Obien rendered judgement on March 7,
1985 with following decision.
(Dra. Dela Llanas opinion that Joels
negligence caused her whiplash injury has
no probative value) WHEREFORE, and in view of the foregoing
considerations, judgment is hereby rendered
as follows:
The SC cannot take judicial notice that 1. The dismissal of the criminal case
vehicular accidents cause whiplash injuries, in against Antonio J. Vlllegas, on account
sum, Dra. Dela Llana miserably failed to of his death on November 16, 1984. is
establish preponderance of evidence. hereby reiterated.
VILLEGAS, ET AL. VS. CA, ET AL., G.R. a. One Hundred Fifty Million Pesos
NOS. 82562 & 82592, APRIL 11, 1997. (P150.000.000.00) as moral
damages:
FACTS:
This case originated from libel suit filed by b. Two Hundred Thousand Pesos
Antonio V. Raquiza against Manila Mayor
(P200.000.00) as actual
Antonio J. Villegas, who allegedly publicly
imputed to him acts constituting violations of the damages:
Anti-Graft and Corrupt Practices Act on several
August 1968 through; c. Forty-nine Million Eight Hundred
Thousand Pesos
a) A speech before the Lionos Club of (P49,800,000.00) as exemplary
Malasiqui, Pangasinan on August 10; damages; and
b) Public Statements in Manila on August
13;
d. The cost of suit.
c) In Davao on August 17, which was
coupled with a radio-TV interview; and
d) A public statement shortly prior to his
appearance ebfore the Senate
Committee on Public Works Committee SO ORDERED.
on August 20.
The heirs of Villegas appealed the decision.
The Committee observed that all allegations in
the complaint was based on the testimony of On March 15, 1988, the Court of Appeals
Pedro U. Fernandez. Villegas also failed to rendered a decision affirming the trial court's
submit the original copies of his documentary judgment modified only with respect to the
evidence. Thus, after investigation, Raquiza award of damages which was reduced to P2
was cleared of all charged by the Committee. million representing P1.5 million, P300,000.00,
and P200,000.00 in moral exemplary and actual
On July 25, 1969, information for libel was filed damages, respectively. Both parties elevated
before the Fiscal of Manila against Villegas who said decision to this Court for review.
denied the charge. After losing the 1971
election, Villegas left for the United Stated ISSUE:
where he stayed until he died on November 16, WON death of the accused before final
1984. Nevertheless, trial proceeded on judgement extinguishes Civil Liability?
absentia. The prosecution had already rested
AND BUSINESS
2. The claim for civil liability survives On June 5, 1975, the usufructuaries entered
notwithstanding the death of accused, if the into a contract leasing the fishpond to Luis Keh
same may also be predicated on a source of for a period of five (5) years and renewable for
another five (5) years with the condition that the
obligation other than delict. (Article 1157)
first five (5) years rental would be Php
150,000.00 and Php 175,000 for the next five
(5) years.
3. Where the civil liability survives, as Paragraph 5 of the lease contract says that Luis
explained in Number 2 above, an action for Keh cannot sublease the fishponod nor assign
recovery therefor may be pursued but only his rights to anyone.
by way of filing a separate civil action.
Luis Crisostomo, who only finished 5th grade, is
a businessman engaged in fishponds. On
September 20, 1977, his close friend Ming
Cosim arrives in his fishpond farm in Bataan
4. Finally, the private offended party need not with petitioner Charlie Lee. They persuaded
fear a forfeiture of his right to file this Luis Crisostomo to take over the operation of
separate civil action by prescription. Papaya Fishpond for Charlie Lee and and his
partner Luis Keh were losing money in its
operation.
The source of Villegas' civil liability in the
Sometime in December, Crisostomo, Lee and
present case is the felonious act of libel he
Keh executed a written agreement denominated
allegedly committed. Yet, this act could also be
as PAKIAO BUWIS whereby Crisostomo
deemed a quasi-delict within the purview of
would take possession of the Papaya
Article 33 9 in relation to Article 1157 of the Civil
Fishpond from January 6, 1978 to June 6,
Code.
1978 (5 months) in consideration for the amount
of Php 128,000.00.
WHEREFORE, the petition in G.R. No. 82562 is Breakdown of Php 128,000.00;
GRANTED and the petition in G.R. No. 82592 is Php 75,000.00 for Rental
DENIED. The decisions of the Court of Appeals Php 50,000.00 for value of Milk Fish
in CA-G.R. CR No. 82186 dated March 15, Php 3,000.00 for Labor Expenses
1988, and of the Manila Regional Trial Court,
Branch 44, dated March 7, 1985, as amended, Private respondent paid the P75,000.00 to
are hereby REVERSED and SET petitioner Keh at the house of petitioner Lee in
ASIDE, without prejudice to the right of the Sta. Cruz, Hagonoy, Bulacan in the presence of
private offended party Antonio V. Raquiza, to Lee's wife, brother-in-law and other persons. He
paid the balance to petitioner Lee sometime in
file the appropriate civil action for damages
February or March 1978 because he was
against the executor or administrator of the uncertain as to the right of petitioners Keh and
estate or the heirs of the late Antonto J. Villegas Lee to transfer possession over the fishpond to
in accordance with the foregoing procedure. him. Private respondent made that payment
only after he had received a copy of a written
agreement dated January 9, 1978 whereby
JUAN L. PEREZ VS. C.A., G.R. NO. petitioner Keh ceded, conveyed and transferred
all his "rights and interests" over the fishpond to
98695, JANUARY 27, 1993
petitioner Lee, "up to June 1985." From private
respondent's point of view, that document
FACTS:
AND BUSINESS
AND BUSINESS
It should, however, be subject to the does not preclude the existence of a culpa
MODIFICATIONS that: aquiliana,
1. Petitioner Luis Keh shall pay private We find no reason to disregard the respondents
respondent Luis Crisostomo in the amount Court finding that there was no negligence.
of P486,562.25 with legal interest from the
rendition of the judgment in Civil Case No. Article 2176. Whoever by act or omission
5610-M or on September 6, 1989, and causes damage to another, there being fault or
negligence, is obliged to pay for the damage
2. Petitioners be made liable jointly and done. Such fault or negligence, if there is no
severally liable for moral damages of pre-existing contractual relation between the
P50,000.00, exemplary damages of parties, is called a quasi-delict
P20,000 and attorney's fees of P10,000.00. x x x.
JUAN J. SYCIP VS. C.A., G.R. NO., In this case, it has been established that the
98695, JANUARY 27, 1993 Syquias and the Manila Memorial Park
Cemetery, Inc., entered into a contract entitled
FACTS: Deed of Sale and Certificate of Perpetual Care
Juan Syquia, father of the deceased Vicente
Syquia, entered in a contract of Deed of Sale On August 27, 1969. That agreement governed
and Interment Order with Manila Memorial Park the relations of the parties and defined their
Cemetery Inc (MMPCI). In the contract, there respective rights and obligations. Hence, had
contained a provision which stated that the there been actual negligence on the part of the
coffin would be placed in a sealed concrete Manila Memorial Park Cemetery, Inc., it would
vault to protect the remains of the deceased be held liable not for a quasi-delict or culpa
from the elements. aquiliana, but for culpa contractual as provided
by Article 1170 of the Civil Code, to wit:
During the preparation for the transfer of
Vicentes remains in the newly bought lot in Those who in the performance of their
Manila Memorial, it was discovered that there obligations are guilty of fraud, negligence, or
was a hole in the concrete vault which caused delay, and those who in any manner contravene
total flooding inside, damaged the coffin as well the tenor
as the body of the deceased and covered the thereof, are liable for damages.
same with filth. Syquia filed a complaint for
recovery of damages arising from breach of LEGASPI OIL CO., INC. VS. C.A., G.R.
contract and/or quasi-delict against the MMPCI NO. 96505, JULY 01, 1993
for failure to deliver a defect-free concrete vault
to protect the remains of the deceased. In its FACTS:
defense, MMPCI claimed that the boring of the Bernard Oseraos had several transactions with
hole was necessary in order to prevent the vault Legaspi Oil Co. for the sale of copra to the
from floating when water fills the grave. The trial latter. The price at which appellant sells the
court dismissed the complaint holding that there copra varies from time to time, depending on
was no quasi-delict because the defendant is the prevailing market price when the contract is
not guilty of any fault or negligence and entered into. On February 16, 1976, appellant's
because there was a pre-existing contract agent Jose Llover signed contract No. 3804 for
between the parties. The CA affirmed the the sale of 100 tons of copra at P82.00 per 100
decision of the trial court. Hence, the present kilos with delivery terms of 20 days effective
petition. March 8, 1976. After the period to deliver had
lapsed, appellant sold only 46,334 kilos of copra
ISSUE: thus leaving a balance of 53,666 kilos.
Whether or not the private respondent is guilty Accordingly, demands were made upon
of tort? appellant to deliver the balance with a final
warning that failure to deliver will mean
HELD: cancellation of the contract, the balance to be
Denied. Decision of the CA affirmed. We are purchased at open market and the price
more inclined to answer the foregoing questions differential to be charged against appellant. On
in the negative. There is not enough ground, October 22, 1976, since there was still no
both in fact and in law, to justify a reversal of the compliance, appellee exercised its option under
decision of the respondent Court and to uphold the contract and purchased the undelivered
the pleas of the petitioners. Although a pre- balance from the open market at the prevailing
existing contractual relation between the parties price of P168.00 per 100 kilos, or a price
AND BUSINESS
differential of P86.00 per 100 kilos, a net loss of bridge on the Manila South Road in the
P46,152.76 chargeable against appellant. municipality of Las Pias, Province of Rizal.
The truck was driven by the chauffeur Abelardo
ISSUE: Velasco, and was owned by Saturnino Cortez.
WON private respondent is guilty of breach of The automobile was being operated by
contact. Bonifacio Gutierrez, a lad 18 years of age, and
was owned by Bonifacio's father and mother,
RULING: Mr. and Mrs. Manuel Gutierrez. At the time of
Private respondent is guilty of fraud in the the collision, the father was not in the car, but
performance of his obligation under the sales the mother, together will several other members
contract whereunder he bound himself to of the Gutierrez family, seven in all, were
deliver to petitioner 100 metric tons of copra. accommodated therein. A passenger in the
However within the delivery period, Oseraos autobus, by the name of Narciso Gutierrez, was
delivered only 46,334 kilograms of copra to en route from San Pablo, Laguna, to Manila.
petitioner. Petitioner made repeated demands The collision between the bus and the
upon private respondent to deliver the balance automobile resulted in Narciso Gutierrez
of 53,666 kilograms but private respondent suffering a fracture right leg which required
ignored the same. Petitioner made a final medical attendance for a considerable period of
demand with a warning that, should private time, and which even at the date of the trial
respondent fail to complete delivery of the appears not to have healed properly.
balance of 53,666 kilograms of copra, petitioner
would purchase the balance at the open market It is conceded that the collision was caused by
and charge the price differential to private negligence pure and simple. The difference
respondent. Still private respondent failed to between the parties is that, while the plaintiff
fulfill his contractual obligation to deliver the blames both sets of defendants, the owner of
remaining 53,666 kilograms of copra and since the passenger truck blames the automobile,
there was still no compliance by private and the owner of the automobile, in turn,
respondent, petitioner exercised its right under blames the truck. We have given close attention
the contract and purchased 53,666 kilograms of to these highly debatable points, and having
copra, the undelivered balance, at the open done so, a majority of the court are of the
market at the then prevailing price of P168.00 opinion that the findings of the trial judge on all
per 100 kilograms, a price differential of controversial questions of fact find sufficient
P46,152.76. support in the record, and so should be
maintained. With this general statement set
The conduct of private respondent clearly down, we turn to consider the respective legal
manifests his deliberate fraudulent intent to obligations of the defendants.
evade his contractual obligation for the price of
copra had in the meantime more than doubled In amplification of so much of the above
from P82.00 to P168 per 100 kilograms. Under pronouncement as concerns the Gutierrez
Article 1170 of the Civil Code of the Philippines, family, it may be explained that the youth
those who in the performance of their obligation Bonifacio was in incompetent chauffeur, that he
are guilty of fraud, negligence, or delay, and was driving at an excessive rate of speed, and
those who in any manner contravene the tenor that, on approaching the bridge and the truck,
thereof, are liable for damages. Pursuant to he lost his head and so contributed by his
said article, private respondent is liable for negligence to the accident. The guaranty given
damages. by the father at the time the son was granted a
license to operate motor vehicles made the
father responsible for the acts of his son. Based
GUTIERREZ VS. GUTIERREZ, 56 PHIL on these facts, pursuant to the provisions of
177 article 1903 of the Civil Code, the father alone
and not the minor or the mother, would be liable
This is an action brought by the plaintiff in the for the damages caused by the minor.
Court of First Instance of Manila against the five
defendants, to recover damages in the amount We are dealing with the civil law liability of
of P10,000, for physical injuries suffered as a parties for obligations which arise from fault or
result of an automobile accident. On judgment negligence. At the same time, we believe that,
being rendered as prayed for by the plaintiff, as has been done in other cases, we can take
both sets of defendants appealed. cognizance of the common law rule on the
same subject. In the United States, it is
On February 2, 1930, a passenger truck and an uniformly held that the head of a house, the
automobile of private ownership collided while owner of an automobile, who maintains it for the
attempting to pass each other on the Talon general use of his family is liable for its
AND BUSINESS
negligent operation by one of his children, the court, three of whom have inclined to the
whom he designates or permits to run it, where view that P3,000 would be amply sufficient,
the car is occupied and being used at the time while a fourth member has argued that P7,500
of the injury for the pleasure of other members would be none too much.
of the owner's family than the child driving it.
The theory of the law is that the running of the In consonance with the foregoing rulings, the
machine by a child to carry other members of judgment appealed from will be modified, and
the family is within the scope of the owner's the plaintiff will have judgment in his favor
business, so that he is liable for the negligence against the defendants Manuel Gutierrez,
of the child because of the relationship of Abelardo Velasco, and Saturnino Cortez, jointly
master and servant. (Huddy On Automobiles, and severally, for the sum of P5,000, and the
6th ed., sec. 660; Missell vs. Hayes [1914], 91 costs of both instances.
Atl., 322.) The liability of Saturnino Cortez, the
owner of the truck, and of his chauffeur DE GUIA VS. MANILA ELECTRIC, 40
Abelardo Velasco rests on a different basis, PHIL 796
namely, that of contract which, we think, has
been sufficiently demonstrated by the
FACTS:
allegations of the complaint, not controverted,
The plaintiff is a physician residing in Caloocan
and the evidence. The reason for this
City.-Sept 4, 1915, at about 8pm, the defendant
conclusion reaches to the findings of the trial
boarded a car at the end of the line with the
court concerning the position of the truck on the
intention of coming to Caloocan.-At about 30
bridge, the speed in operating the machine, and
meters from the starting point the car entered a
the lack of care employed by the chauffeur.
switch, the plaintiff remaining on the back
While these facts are not as clearly evidenced
platform holding the handle of the right-hand
as are those which convict the other defendant,
door. Upon coming out of the switch, the small
we nevertheless hesitate to disregard the points
wheels of the rear truck left the track ran for a
emphasized by the trial judge. In its broader
short distance and hit a concrete post.-the post
aspects, the case is one of two drivers
was shattered: at the time the car struck against
approaching a narrow bridge from opposite
the concrete post, the plaintiff was allegedl y
directions, with neither being willing to slow up
standing on the rear platform, grasping the
and give the right of way to the other, with the
handle of the right-hand door. The shock of the
inevitable result of a collision and an accident.
impact threw him forward, and the left part of
his chest struck against the door causing him to
The defendants Velasco and Cortez further fall. In the falling, the plaintiff alleged that his
contend that there existed contributory head struck one of the seats and he became
negligence on the part of the plaintiff, consisting unconscious.-the plaintiff was taken to his home
principally of his keeping his foot outside the which was a short distance away from the site
truck, which occasioned his injury. In this of the incident. A physician of the defendant
connection, it is sufficient to state that, aside company visited the plaintiff and noted that the
from the fact that the defense of contributory plaintiff was walking about and apparently
negligence was not pleaded, the evidence suffering somewhat from bruises on his chest.
bearing out this theory of the case is The plaintiff said nothing about his head being
contradictory in the extreme and leads us far injured and refused to go to a hospital.-The
afield into speculative matters. plaintiff consulted other physicians about his
condition, and all these physicians testified for
The last subject for consideration relates to the the plaintiff in the trial court.-the plaintiff was
amount of the award. The appellee suggests awarded with P6,100, with interest and costs,
that the amount could justly be raised to as damages incurred by him inconsequence of
P16,517, but naturally is not serious in asking physical injuries sustained. The plaintiff and the
for this sum, since no appeal was taken by him defendant company appealed.
from the judgment. The other parties unite in
challenging the award of P10,000, as ISSUES:
excessive. All facts considered, including actual 1. WON the defendant has disproved the
expenditures and damages for the injury to the existence of negligence?
leg of the plaintiff, which may cause him 2. What is the nature of the relation between the
permanent lameness, in connection with other parties?
adjudications of this court, lead us to conclude 3. WON the defendant is liable for the damages
that a total sum for the plaintiff of P5,000 would 4. If liable for damages, WON the defendant
be fair and reasonable. The difficulty in could avail of the last paragraph of Art 1903 on
approximating the damages by monetary culpa aquiliana (Art 2180)
compensation is well elucidated by the 5. What is the extent of the defendants liability?
divergence of opinion among the members of
AND BUSINESS
5.1 Did the trial judge err in the awarding of the The company was bound to convey and
damages for loss of professional earnings deliverthe plaintiff safely and securely with
(P900)? reference to thedegree of care which, under the
5.2 Did the trial judge err in the awarding of the circumstances, isrequired by law and custom
damages for inability to accept a position as a applicable to the case.
district health officer?
5.3 Did the trial judge err in not awarding Reasoning:
damages for the plaintiffs supposed The plaintiff had boarded the car as a
incapacitation for future professional practice passenger for the city of Manila and the
(P30,000)? company undertook to convey him for hire.
5.4 Is the plaintiff reasonable in
demandingP10,000 for the cost of medical 3. YES, the defendant is liable for the damages
treatment and other expenses incident to his
cure? Ratio/ Reasoning
6. WON the trial judge erred in treating written Upon failure to comply with that obligation
statements of the physicians who testified as arising from the contract, the company incurred
primary evidence? the liability defined in articles 1103-1107 of the Civil
Code.
HELD:
1. NO, the existence of negligence in 4. No, the defendant could not avail of the last
theoperation of the car must be sustained, as paragraph of Art 1903
notbeing clearly contrary to the evidence.
Ratio/ Reasoning:
Ratio: The last paragraph of article 1903of the civil
An experienced and attentive motorman should code refers to liability incurred by negligence in
have discovered that something was wrong and the absence of contractual relation, that is, to
would have stopped before he had driven the the culpa aquiliana of the civil law and not to
car over the entire distance from the point liability incurred by breach of contract;
where the wheels left the track to the place therefore, it is irrelevant to prove that the
where the post was struck. defendant company had exercised due care in
the selection and instruction of the motorman
Reasoning: who was in charge of its car and that he was in
The motorman alleged that he reduced his experienced and reliable servant.
speed to the point that the car barely entered
the switch under its own momentum, and this 5. The defendant is liable for the damages
operation was repeated as he passed out. Upon ordinary recoverable for the breach
getting again on the straight track he put the of contractual obligation, against a person who
control successively at points one, two, three has acted in good faith, which could be
and lastly at point four. At the moment when the reasonably foreseen at the time the obligation is
control was placed at point four he perceived contracted.
that the rear wheels were derailed and applied
the brake; but at the same instant the car struck Ratio:
the post, some 40 meters distant from the exit The extent of the liability for the breach of a
of the switch. However, testimonial evidence contract must be determined in the light of the
alleged that the rate of a car propelled by situation in existence at the time the contract is
electricity with the control at point "four" should made; and the damages ordinarily recoverable
be about five or 6 miles per hour (around 8 kph) are in all events limited to such as might be
and other evidence showed that the car was reasonably foreseen in the light of the facts then
behind schedule time and that it was being known to the contracting parties.
driven, after leaving the switch, at a higher rate
than would ordinarily be indicated by the control Reasoning:
at point four. The car was practically empty (so The court has the power to moderate liability
its possible that it could run faster???). The according to the circumstances of the case ,i.e.
court granted that there is negligence as shown when the defendant must answer for the
by the distance which the car was allowed to consequences of the negligence of its
run with the front wheels of the rear truck employees. Also, an employer who has
derailed, aside from the fact that the car was displayed due diligence in choosing and
running in an excessive speed. instructing his servants is entitled to be
considered a debtor in good faith (w/n meaning
2. The relation between the parties was of a of article 1107, old CC)
contractual nature.
5.1. NO, the trial judge was liberal enough to
Ratio: the plaintiff.
AND BUSINESS
AND BUSINESS
letting off passengers, just east of the 2 Duty of the motorman of the car.
intersection, it resumed its course at a Although the motorman of the car was
moderate speed under the guidance of the not bound to stop to let the passenger
motorman. The car had proceeded only a short on, it was his duty to do no act that
distance, however, when Ignacio del Prado ran would have the effect of increasing the
across the street to catch the car, his approach passengers peril while he was
being made from the left. The car was of the attempting to board the car. The
kind having entrance and exit at either end, and premature acceleration of the car was a
the movement of del Prado was so timed that breach of this duty.
he arrived at the front entrance of the car at the 3 Nature of relation between a carrier
moment when the car was passing. Del Prado, of passengers for hire and its
upon approaching the car, raised his hand as patrons; Duty of the carrier. The
an indication to the motorman of his desire to relation between a carrier of passengers
board the car, in response to which the for hire and its patrons is of a
motorman eased up a little, without stopping. contractual nature; and a failure on the
Upon this, del Prado seized, with his left hand, part of the carrier to use due care in
the front perpendicular handpost, at the same carrying its passengers safely is a
time placing his left foot upon the platform. breach of duty (culpa contractual) under
However, before del Prados position had articles 1101, 1103, and 1104 of the Civil
become secure, and even before his raised Code. Furthermore, the duty that the
right foot had reached the platform, the carrier of passengers owes to its
motorman applied the power, with the result that patrons extends to persons boarding the
the car gave a slight lurch forward. This sudden cars as well as to those alighting
impulse to the car caused del Prados foot to therefrom.
slip, and his hand was jerked loose from the 4 Relevance of distinction between
handpost. He therefore fell to the ground, and Culpa Contractual and Culpa
his right foot was caught and crushed by the Aquiliana as to defenses available.
moving car. The next day the member had to be The distinction between the two sorts of
amputated in the hospital. negligence is important in this
jurisdiction, for the reason that where
An action was instituted in the CFI of Manila by liability arises from a mere tort (culpa
Ignacio del Prado to recover damages in the aquiliana), not involving a breach of
amount of P50,000 for personal injuries alleged positive obligation, an employer, or
to have been caused by the negligence of master, may exculpate himself, under
Meralco in the operation of one of its street cars the last paragraph of article 1903 of the
in the City of Manila. Upon hearing the cause Civil Code, by proving that he had
the trial court awarded to del Prado the sum of exercised due diligence to prevent the
P10,000, as damages, with costs of suit. damage; whereas this defense is not
Meralco appealed. available if the liability of the master
ISSUE: arises from a breach of contractual duty
WON There is absence or presence of (culpa contractual).
Contributory Negligence. 5 Training of motorman irrelevant in
breach of obligation under Article
SC Ruling: 1101 of the Civil Code. Herein, the
The Supreme Court affirmed the appealed company pleaded as a special defense
judgment with the modification that the sum to that it had used all the diligence of a
be recovered reduced to P2,500; with costs good father of a family to prevent the
against Meralco. damage suffered by del Prado; and to
1 No obligation on the part of a street establish this contention the company
railway company to stop cars at introduced testimony showing that due
points other than appointed for care had been used in training and
stoppage. There is no obligation on the instructing the motorman in charge of
part of a street railway company to stop this car in his art. This proof is irrelevant
its cars to let on intending passengers at in view of the fact that the liability
other points than those appointed for involved was derived from a breach of
stoppage. It would be impossible to obligation under article 1101 of the Civil
operate a system of street cars if a Code and related provisions.
company engaged in this business were 6 Relevance of distinction between
required to stop any and everywhere to negligence arising under Article 1902
take on people who are too indolent, or and 1101 as to mitigation of liability.
who imagine themselves to be in too Another practical difference between
great a hurry, to go to the proper places liability for negligence arising under
for boarding the cars. article 1902 of the Civil Code and
AND BUSINESS
liability arising from negligence in the SAN PEDRO BUS LINES ET AL VS.
performance of a positive duty, under NAVARRO, G.R. NO. L-6291, APRIL 29,
article 1101 and related provisions of 1954
the Civil Code, is that, in dealing with
the latter form of negligence, the court is FACTS:
given a discretion to mitigate liability Nicolas Navarro filed a complaint in the court of
according to the circumstances of the First Instance of Rizal against the San Pedro
case (art 1103). No such general Bus Line, Paulino de la Cruz and Teodulo
discretion is given by the Code in Lacdan, doing business in the name of the San
dealing with liability arising under article Pedro Bus Line, alleging that the plaintiff, on
1902; though possibly the same end is April 21, 1943, rode as a passenger in Manila
reached by courts in dealing with the bound bus No. TPU-7654 owned and operated
latter form of liability because of the by the defendants; that while on its way the bus
latitude of the considerations pertinent collided with another vehicle, causing serious
to cases arising under this article. physical injuries to the plaintiff, with subsequent
7 Contributory negligence a mitigating post-traumatic psychosis which might
circumstance under Article 1103 Civil incapacitate him for life; that as a result thereof
Code. As to the contributory the plaintiff suffered damages, for actual
negligence of del Prado, as in Rakes medical and hospital expenses and loss of
vs. Atlantic, Gulf and Pacific Co. (7 earning power, in the total sum of P4,500 which
Phil., 359), it is treated as a mitigating the plaintiff sought to recover from the
circumstance under article 1103 of the defendants.
Civil Code. Herein, the negligence of
del Prado was contributory to the In their answer the defendants admitted the
accident and must be considered as a occurrence of the accident and the injuries
mitigating circumstance. received the plaintiff, but disclaimed
8 Proximate cause. Del Prados responsibility for the accident. After trial, the
negligence in attempting to board the court dismissed the complaint on the ground
moving car was not the proximate cause that there was "no proof whatsoever of the
of the injury. The direct and proximate relation of the defendants San Pedro Bus Line
cause of the injury was the act of and Paulino de la Cruz with the damages
Meralcos motorman in putting on the claimed by the plaintiff." The plaintiff appealed
power prematurely. A person boarding a to the Court of Appeals which, on part of which
moving car must be taken to assume reads as follows: "WHEREFORE, it appearing
the risk of injury from boarding the car that the trial court erred as charged, and that
under the conditions open to his view, the facts and the lawfully warrant a recovery by
but he cannot fairly be held to assume the appellant, the judgment appealed in the
the risk that the motorman, having the total sum of P9,500, with interests thereon from
situation in view, will increase his peril the date this action was commenced. Costs are
by accelerating the speed of the car charged against the appellees." The defendants
before he is planted safely on the have elevated the case by way of a petition for
platform. Again, the situation is one certiorari.
where the negligent act of the
companys servant succeeded the
It is contended for the herein petitioners that
negligent act of the passenger, and the
they cannot be held civilly liable to respondents
negligence of the company must be
Nicolas Navarro, for the reason that the Court of
considered the proximate cause of the
First Instance of Rizal had dismissed the
injury.
criminal charge against petitioner Paulino de la
9 Rule analogous to the doctrine of
Cruz, driver of the bus involved in the accident,
the last clear chance. The rule
citing the case of Martinez vs. Barredo,* Off.
applicable seems to be analogous to, if
Gaz., 4922. In answer to this contention, it is
not identical with that which is
enough to advert to the conclusion of the Court
sometimes referred to as the doctrine of
of Appeals which is correct that the action
the last clear chance. In accordance
was not based on tort or quasi delict, but was
with this doctrine, the contributory
one for breach of a carrier's contract, there
negligence of the party injured will not
being a clear distinction between culpa as a
defeat the action if it be shown that the
source and creator of obligations (aquiliana)
defendant might, by the exercise of
and culpa in the performance of an already
reasonable care and prudence, have
existing obligation (contractual).
avoided the consequences of the
negligence of the injured party.
As already held in the case of Castro vs. Acro
Taxicab Co.** 46 Off. Gaz., 2023, "para que
AND BUSINESS
prosperase la accion del demandante pidiendo In March 1976, L.C. Diaz opened a savings
indemnizacion de daos y perjuicios bastaba account with Solidbank. On 14 August 1991,
que probase la existencia del contrato de L.C. Diaz through its cashier, Mercedes
pasaje esto es, que causo lesiones y daos en Macaraya, filled up a savings (cash) deposit slip
el pasajero. De acuerdo con la doctrina for P990 and a savings (checks) deposit slip for
enunciada, para el exito de la accion de daos P50. Macaraya instructed the messenger of
no era necesario que se probase la culpa, L.C. Diaz, Ismael Calapre, to deposit the money
desuido a negligencia del chofer que guiaba el with Solidbank. Macaraya also gave Calapre
taximetro No. 962." The case of Martinez vs. the Solidbank passbook.
Barredo is not controlling, since it referred to an
action based on criminal negligence. Calapre went to Solidbank and presented to
Teller No. 6 the two deposit slips and the
The other contention of the petitioners is that it passbook. The teller acknowledged the receipt
was erroneous for the Court of Appeals to of the deposit by returning to Calapre the
award in favor of respondent Navarro damages duplicate copies of the two deposit slips. Teller
in the amount of P9,500, his claim in the No. 6 stamped the deposit slips with the words
complaint being only for P4,500. It appears, DUPLICATE and SAVING TELLER 6
however, that the complaint prayed for "such SOLIDBANK HEAD OFFICE. Since the
further relief as may be deemed just and transaction took time and Calapre had to make
equitable," and this of course warranted the another deposit for L.C. Diaz with Allied Bank,
granting in the complaint. Indeed, under section he left the passbook with Solidbank. Calapre
9, Rule 35, of the Rules of Court, "the judgment then went to Allied Bank. When Calapre
shall grant the relief to which the party in whose returned to Solidbank to retrieve the passbook,
favor it is rendered is entitled, even if the party Teller No. 6 informed him that somebody got
has not demanded such relief in his pleadings." the passbook. Calapre went back to L.C. Diaz
and reported the incident to Macaraya.
It is also urged by counsel for the petitioners
that the finding of the Court of Appeals that Macaraya immediately prepared a deposit slip
respondent Navarro is insane, is not supported in duplicate copies with a check of P200,000.
by any evidence, and that on the other hand, in Macaraya and Calapre went to Solidbank and
the motion for new trial filed by the petitioners, presented to Teller No. 6 the deposit slip and
accompanied by the affidavits of Marcelo check. The teller stamped the words
Legaspi and Ceferino Terello, respondent DUPLICATE and SAVING TELLER 6
Navarro is shown not to be insane, with the SOLIDBANK HEAD OFFICE on the duplicate
result that there is no basis for awarding the copy of the deposit slip. When Macaraya asked
additional amount of P5,000. However, apart for the passbook, Teller No. 6 told Macaraya
from the fact that the finding of the Court of that someone got the passbook but she could
Appeals is factual and therefore conclusive, the not remember to whom she gave the passbook.
said sum was granted by the Court of Appeals, When Macaraya asked Teller No. 6 if Calapre
not only for the resulting insanity of respondent got the passbook, Teller No. 6 answered that
Navarro but for his pain and suffering in someone shorter than Calapre got the
general; and we are not prepared to hold that passbook. Calapre was then standing beside
the award is excessive as compensation for Macaraya.
moral damages.
The following day L.C. Diaz learned of the
Wherefore, the decision complained of is unauthorized withdrawal the day before (14
affirmed, and it is so ordered with costs against August 1991) of P300,000 from its
petitioners. savings account. The withdrawal slip for the
P300,000 bore the signatures of the authorized
signatories of L.C. Diaz, namely Diaz and
Rustico L. Murillo. The signatories, however,
CONSOLIDATED BANK VS. C.A., G.R.
denied signing the withdrawal slip. A certain
NO. 138569, SEPTEMBER 11, 2003 Noel Tamayo received the P300,000.
L.C. Diaz demanded from Solidbank the return
FACTS: of its money. Solidbank refused. L.C. Diaz filed
Petitioner Solidbank is a domestic banking a Complaint for Recovery of a Sum of Money
corporation organized and existing under against Solidbank. The trial court absolved
Philippine laws. Private respondent L.C. Diaz Solidbank. L.C. Diaz appealed to the CA. CA
and Company, CPAs, is a professional reversed the ecision of the trial court. CA denied
partnership engaged in the practice of the motion for reconsideration of Solidbank. But
accounting. it modified its decision by deleting the award of
exemplary damages and attorneys fees. Hence
this petition.
AND BUSINESS
AND BUSINESS
defense of exercising the required diligence in not exculpate the defendant from his breach of
the selection and supervision of employees is contract
not a complete defense in culpa contractual,
unlike in culpa aquiliana. The bank must not Mitigated Damages
only exercise high standards of integrity and
performance, it must also insure that its Under Article 1172, liability (for culpa
employees do likewise because this is the only contractual) may be regulated by the courts,
way to insure that the bank will comply with its according to the circumstances. This means
fiduciary duty that if the defendant exercised the proper
diligence in the selection and supervision of its
Proximate Cause of the Unauthorized employee, or if the plaintiff was guilty of
Withdrawal contributory negligence, then the courts may
reduce the award of damages. In this case, L.C.
Proximate cause is that cause which, in natural Diaz was guilty of contributory negligence in
and continuous sequence, unbroken by any allowing a withdrawal slip signed by its
efficient intervening cause, produces the injury authorized signatories to fall into the hands of
and without which the result would not have an impostor. Thus, the liability of Solidbank
occurred. Proximate cause is determined by the should be reduced.
facts of each case upon mixed considerations
of logic, common sense, policy and precedent. In PBC v. CA where the Court held the
L.C. Diaz was not at fault that the passbook depositor guilty of contributory negligence, we
landed in the hands of the impostor. Solidbank allocated the damages between the depositor
was in possession of the passbook while it was and the bank on a 40-60 ratio. Applying the
processing the deposit. After completion of the same ruling to this case, we hold that L.C. Diaz
transaction, Solidbank had the contractual must shoulder 40% of the actual damages
obligation to return the passbook only to awarded by the appellate court. Solidbank must
Calapre, the authorized representative of L.C. pay the other 60% of the actual damages.
Diaz. Solidbank failed to fulfill its contractual
obligation because it gave the passbook to WHEREFORE, the decision of the Court of
another person. Appeals is AFFIRMED with MODIFICATION.
Had the passbook not fallen into the hands of BISHOP OF JARO VS. DELA PEA. 26
the impostor, the loss of P300,000 would not PHIL 144
have happened. Thus, the proximate cause of
the unauthorized withdrawal was Solidbanks
negligence in not returning the passbook to FACTS:
Calapre.
AND BUSINESS
thus deposited in said bank. The arrest of for events which could not be foreseen, or
Father De la Pea and the confiscation of the which having been foreseen were inevitable,
funds in the bank were the result of the claim of with the exception of the cases expressly
the military authorities that he was an insurgent mentioned in the law or those in which the
and that the funds thus deposited had been obligation so declares." (Art. 1105.)
collected by him for revolutionary purposes. The
money was taken from the bank by the military
authorities by virtue of such order, was
confiscated and turned over to the Government. By placing the money in the bank and mixing it
with his personal funds De la Pea did not
While there is considerable dispute in the case thereby assume an obligation different from that
over the question whether the P6,641 of trust under which he would have lain if such deposit
funds was included in the P19,000 deposited as had not been made, nor did he thereby make
aforesaid, nevertheless, a careful examination himself liable to repay the money at all hazards.
of the case leads us to the conclusion that said If they had been forcibly taken from his pocket
trust funds were a part of the funds deposited or from his house by the military forces of one
and which were removed and confiscated by of the combatants during a state of war, it is
the military authorities of the United States. clear that under the provisions of the Civil Code
he would have been exempt from responsibility.
The fact that he placed the trust fund in the
bank in his personal account does not add to
ISSUE: his responsibility. Such deposit did not make
him a debtor who must respond at all hazards.
Whether or not Father de la Pea is liable for
the loss of the money under his trust?
OBEJERA VS. IGA SY, 76 PHIL 580
Facts:
RULINGS: On December 13, 1941, plaintiffs and defendant
sought refuge in the house of Leon Villena, on
account of the Japanese invasion of the
The court, therefore, finds and declares that the
Philippines. News having spread that the
money which is the subject matter of this action Japanese were committing barbarous acts,
was deposited by Father De la Pea in the plaintiffs and defendant decided to hide their
Hongkong and Shanghai Banking Corporation things and valuables in a dugout belonging to
of Iloilo; that said money was forcibly taken from Villena.
the bank by the armed forces of the United
States during the war of the insurrection; and On February 18, 1942, it was discovered that
their money and things had been lost. The
that said Father De la Pea was not responsible
defendant reported the loss of her valuables
for its loss. causing the arrest and investigation of Villena,
two others and the plaintiff Engracio Obejera,
who were released shortly after, except
Engracio Obejera who was released only on
Father De la Pea's liability is determined by April 19, 1912 after he, with his wife, had
those portions of the Civil Code which relate to consented to execute a transfer agreement with
obligations. (Book 4, Title 1.) the defendant which was annulled by the Court
of First Instance in Batangas on the ground of
force and intimidation.
Issue:
Although the Civil Code states that "a person 1. Whether or not the deed of transfer certificate
obliged to give something is also bound to executed by both parties is valid?
preserve it with the diligence pertaining to a 2. Whether or not Obejera is civilly liable to the
good father of a family" (art. 1094), it also assets that were lost by Sy?
provides, following the principle of the Roman
Held:
law, major casus est, cui humana infirmitas 1. NO. Decision AFFIRMED
resistere non potest, that "no one shall be liable 2. NO. Decision AFFIRMED
AND BUSINESS
Held 3. On defense:
AND BUSINESS
As a defense against liability on the The judgment is modified. The City of Manila
basis of a quasi-delict, one must have exercised and Asiatic are solidarily liable.
the diligence of a good father of a family.
(Art. 1173 of the Civil Code).
MERCURY DRUG CORP., VS. DE LEON,
There is no argument that it is the duty G.R. NO. 165622, OCTOBER 17, 2008
of the City of Manila to exercise reasonable
care to keep the public market reasonably
FACTS:
safe for people frequenting the place for their
Raul T. De Leon noticed that his left eye was
marketing needs.
reddish. He also had difficulty reading. On the
same evening, he met a friend who happened
While it may be conceded that the
to be a doctor and had just arrived from abroad
fulfillment of such duties is extremely difficult
for dinner. De Leon consulted Dr. Milla about his
during storms and floods, it must however,
irritated left eye. The latter prescribed the drugs
be admitted that ordinary precautions could
"Cortisporin Opthalmic" and "Ceftin" to relieve
have been taken during good weather to
his eye problems.
minimize the dangers to life and limb under
those difficult circumstances.
Before heading to work the following morning,
De Leon went to the Betterliving, Paraaque,
For instance, the drainage hole could
branch of Mercury Drug Store Corporation to
have been placed under the stalls instead of on
buy the prescribed medicines. He showed his
the passage ways. Even more important is
prescription to petitioner Aurmela Ganzon, a
the fact, that the City should have seen to it that
pharmacist assistant. Subsequently, he paid for
the openings were covered. Sadly, the
and took the medicine handed over by
evidence indicates that long before petitioner
Ganzon.De Leon requested his sheriff to assist
fell into the opening, it was already uncovered,
him in using the eye drops. As instructed, the
and five (5) months after the incident happened,
sheriff applied 2-3 drops on respondent's left
the opening was still uncovered. Moreo ver,
eye. Instead of relieving his irritation,
while there are findings that during floods the
respondent felt searing pain so immediately, he
vendors remove the iron grills to hasten the flow
rinsed the affected eye with water, but the pain
of water, there is no showing that such
did not subside. Only then did he discover that
practice has ever been prohibited, much less
he was given the wrong medicine, "Cortisporin
penalized by the City of Manila. Neither was it
Otic Solution.
shown that any sign had been placed
thereabouts to warn passersby of the
De Leon returned to the same Mercury Drug
impending danger.
branch and confronted Ganzon why he was
given ear drops, instead of the prescribed eye
To recapitulate, it appears evident that
drops, she did not apologize and instead
the City of Manila is likewise liable for damages
brazenly replied that she was unable to fully
under Article 2189 of the Civil Code,
read the prescription. In fact, it was her
respondent City having retained control and
supervisor who apologized and informed De
supervision over the Sta. Ana Public
Leon that they do not have stock of the needed
Market and as tort-feasor under Article 2176 of
Cortisporin Opthalmic. De Leon wrote Mercury
the Civil Code on quasi-delicts
Drug, through its president about the day's
incident. It did not merit any response. Instead,
Petitioner had the right to assume that
two sales persons went to his office and
there were no openings in the middle of the
informed him that their supervisor was busy
passageways and if any, that they were
with other matters. Having been denied his
adequately covered. Had the opening been
simple desire for a written apology and
covered, petitioner could not have fallen into
explanation, De Leon filed a complaint for
it. Thus the negligence of the City of Manila is
damages against Mercury Drug.
the proximate cause of the injury suffered, the
City is therefore liable for the injury suffered by
MERCURY DRUGS CONTENTION- Mercury
the petitioner.
Drug and Ganzon pointed out that De Leon's
own negligence was the proximate cause of his
Respondent City of Manila and Asiatic
injury. They argued that any injury would have
Integrated Corporation being joint tort-feasors
been averted had De Leon exercised due
are solidarily liable under Article 2194 of the
diligence before applying the medicine on his
Civil Code.
eye. Had he cautiously read the medicine
bottle label, he would have known that he had
Dispositive
the wrong medicine.
AND BUSINESS
RTC- rendered judgment in favor of De Leon. safeguards consistent with the reasonable
The proximate cause of the ill fate of conduct of the business, so that human life
plaintiff was defendant Aurmila (sic) may not constantly be exposed to the
danger flowing from the substitution of
Ganzon's negligent exercise of said deadly poisons for harmless medicines.
discretion. She gave a prescription drug
to a customer who did not have the one holding himself out as competent to
proper form of prescription, she did not handle drugs, having rightful access to them,
take a good look at said prescription, and relied upon by those dealing with him to
she merely presumed plaintiff was exercise that high degree of caution and
looking for Cortisporin Otic Solution care called for by the peculiarly dangerous
because it was the only one available in nature of the business, cannot be heard to
the market and she further presumed say that his mistake by which he furnishes a
that by merely putting the drug by the customer the most deadly of drugs for those
comparatively harmless, is not in itself gross
counter wherein plaintiff looked at it,
negligence.
paid and took the drug without any
objection meant he understood what he
In cases where an injury is caused by the
was buying.
negligence of an employee, there instantly
Although De Leon may have been arises a presumption of law that there has been
negligent by failing to read the negligence on the part of the employer, either in
medicine's label or to instruct his sheriff the selection or supervision of one's
to do so, Mercury Drug was first to be employees. This presumption may be rebutted
negligent. Ganzon dispensed a drug by a clear showing that the employer has
without the requisite prescription. exercised the care and diligence of a good
Moreover, she did so without fully father of the family. Mercury Drug failed to
reading what medicine was exactly overcome such presumption. Mercury Drug and
being bought. In fact, she presumed that Ganzon have similarly failed to live up to high
since what was available was the drug standard of diligence expected of them as
Cortisporin Otic Solution, it was what De pharmacy professionals. They were grossly
Leon was attempting to buy negligent in dispensing ear drops instead of the
prescribed eye drops to De Leon. Worse, they
CA dismissed the appeal and the motion for have once again attempted to shift the blame to
reconsideration on the ground that if statement their victim by underscoring his own failure to
of fact is unaccompanied by a page reference read the label.
to the record, it may be stricken or disregarded
all together. Hence the petition. As a buyer, De Leon relied on the expertise and
experience of Mercury Drug and its employees
Pharmacist gave the wrong medicine in dispensing to him the right medicine. This
Culpa-contractual Court has ruled that in the purchase and sale of
Druggists must exercise the highest practicable degreedrugs, of prudence
the buyerandand seller do not stand at arms
vigilance, and the most exact and reliable safeguards
length. There exists an imperative duty on the
consistent with the reasonable conduct of the business, so that
sellerhuman life druggist
or the may to take precaution to
not constantly be exposed to the danger flowing from the substitution of deadly
prevent death or injury to any person who
poisons for harmless medicines. relies on one's absolute honesty and peculiar
learning. Mercury Drug and Ganzon's defense
ISSUE: that the latter gave the only available
WON Mercury Drug and Ganzon had exercised Cortisporin solution in the market deserves
the degree of diligence expected of them? scant consideration. Ganzon could have easily
verified whether the medicine she gave De
HELD: Leon was, indeed, the prescribed one or, at the
NO. Mercury Drug and Ganzon failed to very least, consulted her supervisor. Absent the
exercise the highest degree of diligence required certainty in the dispensation of the
expected of them. Mercury Drug and Ganzon medicine, she could have refused De Leon's
can not exculpate themselves from any liability. purchase of the drug.
As active players in the field of dispensing
medicines to the public, the highest degree of The award of damages is proper and shall only
care and diligence is expected of them. be reduced considering the peculiar facts of the
The profession of pharmacy demands care case. Though incapable of pecuniary
and skill, and druggists must exercise care computation, moral damages may be recovered
of a specially high degree, the highest if they are the proximate result of defendant's
degree of care known to practical men. In
wrongful act or omission. However, the award of
other words, druggists must exercise the
highest practicable degree of prudence and damages must be commensurate to the loss or
vigilance, and the most exact and reliable injury suffered.
AND BUSINESS