HONRION LASAM, ET AL vs. FRANK SMITH, JR.

,
G.R. No. 19495. February 2, 1924.
OSTRAND, J
Doctrine: A fortuitous event (caso fortuito ) is an event that is independent of the will of the
obligor, which cannot be foreseen and which having been foreseen, are inevitable. (Article 1174)
Facts: The plaintiffs are husband and wife, while the defendant is engaged in the business of
carrying passengers for hire from one point to another in the Province of La Union and the
surrounding provinces.
The defendant undertook to convey plaintiffs from San Fernando to Currimao, Ilocos Norte. On
leaving San Fernando, the automobile was operated by a licensed chauffeur, but after having
reached the town of San Juan, the chauffeur allowed his assistant to drive the car.
The car functioned well until after the crossing of the Abra River in Tagudin, when defects
developed in the steering gear so as to make accurate steering impossible, and after zigzagging
for a distance of about half a kilometer, the car left the road and went down a steep
embankment. the automobile was overturned and the plaintiffs pinned down under it suffered
physical injuries.
The plaintiffs filed an action to recover damages for physical injuries sustained by them in an
automobile accident, alleging that the accident was due to defects in the automobile as well as
to the incompetence and negligence of the chauffeur. The trial court rendered a judgment in
favor of the plaintiffs. The trial court held, that the cause of action rests on the defendant's
breach of the contract of carriage and that, consequently, articles 1101-1107 of the Civil Code,
and not article 1903, are applicable. The court further found that the breach of the contract was
not due to fortuitous events and that, therefore, the defendant was liable in damages. Both the
plaintiffs and the defendant appeal, the former maintaining that the damages awarded are
insufficient while the latter denies all liability for any damages whatever.
Issues: What is the source of the obligation of the defendant? What is a fortuitous event?
Held: The source of the defendant's legal liability is the contract of carriage; the by entering into
that contract he bound himself to carry the plaintiffs safely and securely to their destination; and
that having failed to do so he is liable in damages unless he shows that the failure to fulfill his
obligation was due to causes mentioned in article 1105 of the Civil Code, which reads as follows:
"No one shall be liable for events which could not be foreseen or which, even if foreseen, were
inevitable, with the exception of the cases in which the law expressly provides otherwise and
those in which the obligation itself imposes such liability."
A fortuitous event (caso fortuito ) is an event that is independent of the will of the obligor, which
cannot be foreseen and which having been foreseen, are inevitable.
“Some extraordinary circumstance independent of the will of the obligor, or of his employees” is
an essential element of a caso fortuito. Turning to the present case, it is at once apparent that
this elements is lacking. It is not suggested that the accident in question was due to an act of God
or to adverse road conditions which could not have been foreseen. As far as the record shows,
the accident was caused either by defects in the automobile or else through the negligence of its
driver. That is not a caso fortuito.

H. C. LIEBENOW, vs. THE PHILIPPINE VEGETABLE OIL COMPANY

G.R. No. 13463. November 9, 1918.
STREET, J
Doctrine: A stipulation contained in a contract of employment to the effect that the employee,
in addition to his salary, shall receive a bonus in such amount as the employer may see fit to grant
creates a legal obligation on the part of the employer to pay something by way of bonus; but the
other party is bound by the provision which leaves the determination of the amount of the bonus
to the employer.
Facts: Plaintiff Leibenow filed an action to recover sum of money against the respondent
Philippine Vegetable oil company with the Court of First instance. Plaintiff considers himself
entitled to said sum by way of a bonus in addition to the salary earned by him while in the
employment of the defendant
The contract under which the plaintiff rendered the service is expressed in a letter of March 17,
1914, written by the president of the Philippine Vegetable Oil Company to Liebenow which
states:
"We hereby confirm conversation had on yesterday by our Mr. Vorster and yourself to the effect
that this company engages your services as superintendent of its factory at Nagtahan for the
period of one year from April 1st, 1914, at a monthly compensation of P500 (five hundred pesos)
and living quarters and such further amount in the way of bonus as the board of directors may
see fit to grant you."
The plaintiff entered upon the discharged of his duties as superintendent of the factory on April
1, 1914 until August 1, 1916 and with salary from P500 to P750. After the employment ceased,
the defendant continued to deliver to plaintiff each month until the total sum of P4,500. The
plaintiff alleges by his skill and ability the defendants plant was made much more productive and
its profit increased. The plaintiff, contents that he is entitled to a bonus to be fixed by the court
as a reasonable participation in the increased profits of the factory under his care, taking into
consideration his technical skill and the greater output therefrom. He suggest, as the lowest
proper minimum that he should be awarded an amount sufficiently to raise his salary for the
whole period to the sum of P12,000 per anum, the amount supposedly paid to his predecessor.
The Court of first Instance ruled in favor of the defendant, plaintiff appealed with the Court of
Appeals, but was also denied, hence this petition.
Issue: is the plaintiff entitled to his claim ?
Held: NO, We see no reason to doubt that a promise of this character creates a legal obligation
binding upon the promisor. The uncertainty of the amount to be paid by way of bonus is also no
obstacle to the validity of the contract since the contract itself specifies the manner in which the
amount payable is to be determined, namely, by the exercise of the judgment and discretion of
the employer.
the obligation can only be satisfied when something has been paid as a bonus by or with the
approval of the board of directors. In the case before us the promise to pay a bonus is absolute
and unconditional. The payment is not conditioned upon satisfactory service, nor upon the
duration of the service, nor upon the profits which may accrue to the employer from the
efficiency of the employee.
The amount of the bonus, is left by the contract to the discretion of the board of directors. But it
is suggested that where a contract of service provides for a salary in a fixed sum and an additional
sum to be paid by way of bonus, the whole contract is to be taken together, and it is to be
considered as having about the same effect as if the parties, recognizing the inadequacy of the
amount fixed as salary, had agreed that a further bonus should be paid sufficient to raise the
amount to what should be considered adequate upon the basis of a quantum meruit.
A more reasonable construction — and in our opinion one which approximates more closely to
the evident intention of the parties — is to hold that the fixed salary was adjusted with a view to
compensate the employee so far as those elements are concerned which could properly be taken
into consideration in fixing a quantum meruit and that the bonus was intended to be a mere
gratuity the amount of which should be determined exclusively in the discretion of the employer.