Cases

a. Cangco v. Manila Railroad Co. G.R. No. L-12191, 14 October 1918

FACTS: Jose Cangco was in the employment of Manila Railroad Company. He lived in the pueblo
of San Mateo, in the province of Rizal, which is located upon the line of the defendant railroad
company; and in coming daily by train to the company’s office in the city of Manila where he
worked, he used a pass, supplied by the company, which entitled him to ride upon the company’s
trains free of charge.
During his ride in the train he arose from his seat and makes his way to the exit while the train is
still on travel. When the train has proceeded a little farther Jose Cangco step down into the
cement platform but unfortunately step in to a sack of watermelon, fell down and rolled under
the platform and was drawn under the moving car which resulting to his arm to be crashed and
lacerated. He was rushed to the hospital and sued the company and the employee who put the
sack of watermelon in the platform.
The accident occurred between 7 and 8 o’ clock on the dark night. It is that time of the year that
may we considered as season to harvest watermelon explaining why there are sacks of
watermelon in the platform. The plaintiff contends that it is the negligence of the Manila Railroad
Co. on why they let their employees put a hindrance in the platform that may cause serious
accident. The defendant answered that it is the lack of diligence on behalf of the plaintiff alone
on why he did not wait for the train to stop before alighting the train.
ISSUE: Whether or not the company is liable or there is a contributory negligence on behalf of
the plaintiff.
RULING: There is no contributory negligence on behalf of the plaintiff. The Supreme Court
provides some test that may find the contributory negligence of a person. Was there anything in
the circumstances surrounding the plaintiff at the time he alighted from the train which would
have admonished a person of average prudence that to get off the train under the conditions
then existing was dangerous? If so, the plaintiff should have desisted from alighting; and his
failure so to desist was contributory negligence.
Alighting from a moving train while it is slowing down is a common practice and a lot of people
are doing so every day without suffering injury. Cangco has the vigor and agility of young
manhood, and it was by no means so risky for him to get off while the train was yet moving as
the same act would have been in an aged or feeble person. He was also ignorant of the fact that
sacks of watermelons were there as there were no appropriate warnings and the place was dimly
lit.
Article 1173, first paragraph: The fault or negligence of the obligor consists in the omission of
that diligence which is required by the nature of the obligation and corresponds with the
circumstances of that persons, of the time and of the place. When negligence shows bad faith,
the provisions of Article 1171 and 2201, paragraph 2, shall apply.
In the case the proximate cause of the accident is the lack of diligence of the company to inform
their employees to not put any hindrance in the platform like sacks of watermelon. The contract
of defendant to transport plaintiff carried with it, by implication, the duty to carry him in safety
and to provide safe means of entering and leaving its trains (civil code, article 1258). That duty,
being contractual, was direct and immediate, and its non-performance could not be excused by
proof that the fault was morally imputable to defendant’s servants. Therefore, the company is
liable for damages against Cangco.

b. Republic v. Luzon Stevedoring Corporation 21 SCRA 279, G.R. No. L-21749 (September
29, 1967)
Facts: Barge owned by Luzon Stevedoring Corporation(defendant, LSC for brevity) was being
towed down the Pasig river by tugboats belonging to the same corporation.`
The barge rammed against one of the wooden piles of the Nagtahan Bailey Bridge, smashing the
posts and causing the bright to list. The river, at that time, was swollen and the current swift, on
account of the heavy downpour of Manila and the surrounding provinces.
Republic of the Philippines (PH) sued LSC for actual and consequential damages caused by its
employees.
Issue/s: Whether or not the collision of LSC’s barge with the supports or piers of the Nagtahan
bridge was in law caused by fortuitous event or force majeure.

Ruling: No. Considering that the Nagtahan bridge was an immovable and stationary object and
uncontrovertibly provided with adequate openings for the passage of water craft, including
barges like of NSC’s, it is undeniable that the unusual event that the barge, exclusively controlled
by appellant, rammed the bridge supports raises a presumption of negligence on the part of
appellant or its employees manning the barge or the tugs that towed it. For in the ordinary course
of events, such a thing does not happen if proper case is used. Res ipsa loquitur.
NLS stresses the precautions (due diligence) taken by it: (1) that it assigned two of its most
powerful tugboats to tow down river its barge, and (2) that it assigned to the task the more
competent and experienced among its patrons, (3) had the towlines, engines and equipment
double-checked and inspected; (4) that it instructed its patrons to take extra precautions. These
very precautions, completely destroy the NLS’defense.
Caso fortuito or force majeure by definition, are extraordinary events not foreseeable or
avoidable, events that could not be foreseen, or which, though foreseen, were inevitable.” It is,
therefore, not enough that the event should not have been foreseen or anticipated, as is
commonly believed, but it must be one impossible to foresee or to avoid. The more difficulty to
foresee the happening is not impossibility to foresee the same. The very measures adopted by
NSC prove that the possibility of danger was not only foreseeable, but actually foreseen, and was
not caso fortuito.
LSC, knowing and appreciating the perils posed by the swollen steam and its swift current,
voluntarily entered into a situation involving obvious danger; it therefore assured the risk, and
cannot shed responsibility merely because the precautions it adopted turned out to be
insufficient.

c. Austria vs. Court of Appeals G.R. No. L-29640, June 10, 1971
FACTS: On January 30, 1961, Maria G. Abad acknowledged that she received from Guillermo
Austria one (1) pendant with diamonds to be sold on a commission basis or to be returned on
demand. However, on February 1, 1961, while walking home to her residence, Abad was said to
have been accosted by two men, one of whom hit her on the face, while the other snatched her
purse containing jewelry and cash, and ran away.
Since Abad failed to return the jewelry or pay for its value notwithstanding demands, Austria
brought in the Court of First Instance of Manila an action against her and her husband for
recovery of the pendant or of its value, and damages. On their answer, the defendant spouses
set up the defense that the alleged robbery had extinguished their obligation.
The trial court rendered judgment in favor for the plaintiff which is Austria. It held that defendant
failed to prove the fact of robbery, or, if indeed it was committed, the defendant was guilty of
negligence. The defendants appealed to the Court of Appeals and secured a reversal of judgment.
It declared respondents not responsible for the loss of the jewelry on account of fortuitous event,
and relieved them from liability for damages to the owner. Hence, this case contending that for
robbery to fall under the category of fortuitous event and relieve the obligor form his obligation
under a contract, there ought to be prior judgment on the guilt of the persons responsible
therefor.
ISSUE: Whether in a contract of agency (consignment of goods for sale) it is necessary that there
be prior conviction for robbery before the loss of the article shall exempt the consignee from
liability for such loss.
RULING: NO, the law provides that except in case expressly specified by law, or when it is
otherwise declared by stipulation, or when the nature of the obligation require the assumption
of risk, no person shall be responsible for those events which could not be foreseen, or which,
though foreseen, were inevitable.
It must be noted that to avail of the exemption granted in the law, it is not necessary that the
persons responsible for the occurrence should be punished; it would only be sufficient to
establish that the enforceable event, the robbery in this case did take place without any
concurrent fault on the debtor`s part, and this can be done by preponderant evidence.
It must also be noted that a court finding that a robbery has happened would not necessarily
mean that those accused in the criminal action should be found guilty of the crime; nor would be
a ruling that those actually accused did not commit the robbery be inconsistent with a finding
that a robbery did take place. The evidence to establish these facts would not necessarily be the
same.

d. Baluran vs. Navarro – Usufruct (79 SCRA, 309) GR No. L-44428 September 30, 1977
The manner of terminating the right of usufruct may be stipulated by the parties such as in
this case, the happening of a resolutory condition.
FACTS: Baluran and Paraiso (ancestor of Obedencio) entered into a contract which they called
barter, but in fact stipulated that they would only transfer the material possession of their
respective properties to each other. Thus, Baluran will be allowed to construct a residential house
on the land of Paraiso while Paraiso is entitled to reap the fruits of the riceland of Baluran. The
contract prohibited them from alienating the properties of the other and contained a stipulation
that should the heirs of Paraiso desire to re-possess the residential lot, Baluran is obliged to
return the lot. Indeed, years after, Obedencio (grandchild of Paraiso) acquired the ownership of
the residential lot from his mother and demanded that Baluran, who was in possession, vacate.
Baluran now counters that the barter already transferred ownership.
ISSUE: Whether or not the contract was a barter or usufruct.
RULING: IT IS USUFRUCT. First, the contract is what the law defines it to be and not what the
parties call it. It is very clear that what the parties exchanged was not ownership, but merely
material possession or the right to enjoy the thing.
Now, because it is usufruct, the law allows the parties to stipulate the conditions including the
manner of its extinguishment. In this case, it was subject to a resolutory condition which is in
case the heir of Paraiso (a third party) desires to repossess the property. Upon the happening of
the condition, the contract is extinguished.
Therefore, Baluran must return the land to Obedencia. But since Art. 579 allows the usufructuary
to remove improvements he made, Baluran may remove the house he constructed.
One last point. At the time of this case, the Obedencias were also in possession of the riceland of
Baluran. Although it was not proper to decide the issue of possession in this case, the Court
nevertheless decided on the matter and order the Obedencias to vacate the property inasmuch
as there was an extinguishment of a reciprocal obligations and rights.
 e. Smith Bell vs. Sotelo Matti (44 Phil. 875) GR No. 16570, March 9, 1922
Facts: Plaintiff corporation undertook to sell and deliver equipment for Mr. Sotelo but no definite
dates were fixed for the delivery. The periods were couched in ambiguous terms such as “within
3 or 4 months”, “in the month of September or as soon as possible”, and “approximate delivery
with 90 days-This is not guaranteed.” When the goods arrived, Mr. Sotelo refused to receive them
and to pay the prices. Mr. Sotelo then sued for damages because of the delay suffered.
Issue: Whether Smith Bell incurred delay in the delivery of goods to Sotelo
Held: No, it did not incur delay.
From the record it appears that these contracts were executed at the time of the world war when
there existed connection with the tanks and "Priority Certificate, subject to the United -States
Government requirements," with respect to the motors. At the time of the execution of the
contracts, the parties were not unmindful of the contingency of the United States Government
not allowing the export of the goods, nor of the fact that the other foreseen circumstances
therein stated might prevent it.
Considering these contracts in the light of the civil law, we cannot but conclude that the term
which the parties attempted to fix is so uncertain that one cannot tell just whether, as a matter
of fact, those articles could be brought to Manila or not. If that is the case, as we think it is, the
obligation must be regarded as conditional.
When the delivery was subject to a condition the fulfillment of which depended not only upon
the effort of the herein plaintiff, but upon the will of third persons who could in no way be
compelled to fulfill .the condition. In cases like this, which are not expressly provided for, but
impliedly covered, by the Civil Code, the obligor will be deemed to have sufficiently performed
his part of the obligation, if he has done all that was in his power, even if the condition has not
been fulfilled in reality.
In connection with this obligation to deliver, occurring in a contract of sale like those in question,
the rule in North America is that when the time of delivery is not fixed in the contract, time is
regarded unessential.
When the contract provides for delivery 'as soon as possible' the seller is entitled to a reasonable
time, in view of all the circumstances, such as the necessities of manufacture, or of putting the
goods in condition for delivery. The term does not mean immediately or that the seller must stop
all his other work and devote himself to that particular order. But the seller must nevertheless
act with all reasonable diligence or without unreasonable delay. It has been held that a
requirement that the shipment of goods should be the 'earliest possible' must be construed as
meaning that the goods should be sent as soon as the seller could possibly send them, and that
it signified rather more than that the goods should be sent within a reasonable time.
"The question as to what is a reasonable time for the delivery of the goods by the seller is to be
determined by the circumstances attending the particular transaction, such as the character of
the goods, and the purpose for which they are intended, the ability of the seller to produce the
goods if they are to be manufactured, the facilities available for transportation, and the distance
the goods must be carried, and the usual course of business in the particular trade." (35 Cyc.,
181-184.)
The record shows, as we have stated, that the plaintiff did all within its power to have the
machinery arrive at Manila as soon as possible, and immediately upon its arrival it notified the
purchaser of the fact and offered to deliver it to him. Taking these circumstances into account,
we hold that the said machinery was brought to Manila by the plaintiff within a reasonable time.
Ruling: Therefore, the plaintiff has not been guilty of any delay in the fulfillment of its obligation,
and, consequently, it could not have incurred any of the liabilities mentioned by the intervenor
in its counterclaim or set-off.

f. Hermosa vs Longara (93 Phil. 971) G. R. No. L-5267, October 27, 1953
Facts: There are three kinds of claims occured after the death of the intestate in December, 1944.
The claimant presented evidence and the CA found that the intestate has asked for the said credit
advances for himself and for the members of his family "on condition that their payment should
be made by Fernando Hermosa, Sr. as soon as he received funds derived from the sale of his
property in Spain." CA held that payment of the advances did not become due until the
administratrix recieved the sum of P20,000 from the buyer of the property. Upon authorization
of the probate court in October, 1997. and the same was paid for subsequently. Thus constitute
this appeal.
Issue: Whether the obligation contracted by the intestate was subject to a condition exclusively
dependent upon the will of the debtor and therefore null and void.
Held: The obligation contracted is a suspensive condition, upon the happening of which the
obligation to pay is made dependent. And upon the happening of the condition, the debt became
immediately due and demandable.
g. Trillana vs Quezon College (93 phil. 383) G. R. No. L-5003, June 27, 1953
Facts: Damasa Crisostomo subscribed 200 shares of capital stock with a par value of P100 each
through a letter sent to the Board of Trustees of the Quezon College, enclosed with the letter are
a sum of money as her initial payment and her assurance of full payment after she harvested fish.
On October 26, 1948, Damasa Crisostomo passed away. As no payment appears to have been
made on the subscription mentioned in the foregoing letter, the Quezon College, Inc. presented
a claim before the CFI of Bulacan in her testate proceeding, for the collection of the sum of
P20,000, representing the value of the subscription to the capital stock of the Quezon College,
Inc. which was then opposed by the administrator of the estate.
Issue: Whether or not the condition entered into by both parties are valid.
Held: No, Under article 1115 of the old Civil Code which provides as follows: "If the fulfillment of
the condition should depend upon the exclusive will of the debtor, the conditional obligation
shall be void.”

h. PLDT v Jeturian
Facts:

 PLDT adopted in 1923 a Plan for Employees’ Pension.

 Condition of pension: If they reach the age of 60 and served for 20 years.
 In 1945 the BOD adopted a resolution discontinuing the pension plan – some retirees did
not get the pension because they did not satisfy the conditions.
 PLDT argued that employees cannot compel them to continue program when it was based
on expectancy.
Issue:
WON the pre-war employees are entitled to the pension.
Held:
Yes. But with the exception of those who died or left before the outbreak of the war. The pension
plan was not a gratuity but an inducement for employees to continue indefinitely in service. The
plan ripened into a binding contract upon its implied acceptance of the employees. Acceptance
is inferred from their entering the employ of the company and staying after the plan was made
known. PLDT argues that it can only be held liable under the conditions expressly set in the
pension plan. But the Court held that the Company that violated the contract with its employees,
by discontinuing the plan without their consent, is not in the position to insist upon the terms of
the very contract they have breached.
PLDT vs Jeturian
Policy that employees who serve 20 years and reaching 60 yrs old. shall get a retirement benefit
was abolished. Employees who waited to be retired will not receive the benefit. The trial court
said it is a form of Constructive fulfilment. PLDT said that the right was only an expectancy.
According to the SC there is an action to preserve the right in a suspensive condition situation.
--- Subsequently, or on December 22, 1951, Crispin Jeturian and about sixty-three (63) other
persons, who had served the Company as its prewar employees, instituted in the Court of
Industrial Relations a proceeding for the collection of their proportionate shares in said
Employees' Pension Plan, which had been discontinued by a resolution dated November 6, 1945,
unilaterally taken by the Board of Directors of the Company, to be effective retroactively as of
January 1, 1942. In due course, a decision was, on February 23, 1954, rendered in said
proceeding, docketed as Case No. 639-V of the Court of Industrial Relations, directing payment
to the petitioners therein of their respective proportionate shares in the aforementioned
Employees' Pension Plan, as well as — to those who had not received their 30-day notice of
dismissal from the service of the Company before the resumption of its business operations in
1946 — a severance pay equivalent to one month salary. With a slight modification, immaterial
to the case at bar, said decision was affirmed by the Supreme Court in Philippine Long Distance
Telephone Co. vs. Jeturian, et al., G.R. No. L-7756, decided on June 20, 1955.