SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS and DISTRICT ENGINEER

CELESTINO R. CONTRERAS, Petitioners, vs. SPOUSES HERACLEO and RAMONA TECSON, Respondents.

FACTS

1. Spouses are co-owners of a parcel of land (7268sqm San Pablo Malolos Bulacan with TCT 43006) Such land was taken by

government for the McArthur Highway in 1940 without their consent and expropriation proceedings.

2. Spouses demanded compensation in 1994 through a letter and Contreras the District Eng. of DPWH offered to pay P. 0.70 per sqm.

Per Resolution of the Provincial Appraisal Committee of Bulacan but the spouses were unsatisfied with the value and demanded

return and payment of current fair market value.

3. Remaining unheeded, souses filed a complaint for recovery of possession and damages. Land was assessed at P2,543,800.00

4. Petitioners moved for the dismissal. Grounds are the ff: 1. The State may not be sued w/o its consent. 2. Prescription 3. No cause of

action for failure to exhaust administrative remedies. 4. If ever entitled to compensation, value of property must be the one in 1940 or

1941.

5. RTC dismissed the case. CA reversed and remanded to trial court for the purpose of determining the just comp.

6. PAC recommended P1,500 per sqm. Therefore, RTC directed DPWH to pay such. On appeal, CA affirmed but modified stating that

the amount should earn interest of 6% per annum computed from the filing of action on 1995 until full payment.

ISSUE

 WON CA ERRED IN AWARDING JUST COMPENSATION BECAUSE COMPLAINT WAS ALREADY BARRED BY

PRESCRIPTION AND LACHES

 WON CA ERRED IN AFFIRMING THE TRIAL COURT’S DECISION ORDERING THE PAYMENT OF JC BASED ON

CURRENT MARKET VALUE.

HELD

Issue of prescription and laches are not applicable because they were not included in the pretrial order. Even if it was applicable, it would

still fail. Laches is inapplicable because there is nothing inequitable in giving due course to the spouses claim because he should only be

rightfully compensated if his property is taken for public use. Also, on prescription, "that where private property is taken by the Government

for public use without first acquiring title thereto either through expropriation or negotiated sale, the owner’s action to recover the land or the

value thereof does not prescribe.”

petitioners had been occupying the subject property for more than fifty years without the benefit of expropriation proceedings. In taking

respondents’ property without the benefit of expropriation proceedings and without payment of just compensation, petitioners clearly acted

in utter disregard of respondents’ proprietary rights which cannot be countenanced by the Court. 42 For said illegal taking, respondents are

entitled to adequate compensation in the form of actual or compensatory damages which in this case should be the legal interest of six

percent (6%) per annum on the value of the land at the time of taking in 1940 until full payment. 43 This is based on the principle that interest

runs as a matter of law and follows from the right of the landowner to be placed in as good position as money can accomplish, as of the date

of taking
SPOUSES BATAL VS. SPOUSES TOMINAGA

FACTS: Respondents contracted the service of Frank, one of the respondents, who represented himself as a surveyor. The
respondents wanted to enclose their property so they decided to procure again the service of Frank for the determination of
the exact boundaries. Consequently, Frank placed concrete monuments marked P.S. on all corners of the lot to be used as
guide for the construction of fence.

Thereafter, a complaint was filed against the respondents for the encroachment of the right of way located in northern part
of the fence they built. The respondents verified to another surveyor about the overlapping which and was later on
confirmed. They also discovered that it was the wife of Frank, Erlinda, who is a licensed geodetic engineer. And as a result,
they had to demolish and reconstruct the fences that they have built.

During the confrontation of the petitioners and respondents in the Barangay, Frank admitted that he made a mistake and
offered to share in expenses; however, he failed to comply with his offer.

Thereafter, the respondents filed a suit against the petitioners. In their defense, the petitioners argued that Frank never
represented himself to be a licensed geodetic engineer, that the fence was already built before they were contracted, and
that the suit was instituted only to harass them.

The RTC held in favor of the respondents, that the encroachment of the fence was due to the negligence of the petitioner;
specifically in the placement of concrete cyclone monuments, and that the erroneous installment of the monuments was due
to the fact that Erlinda did not provide supervision over the work of Frank. In appeal, the CA affirmed the decision of the
RTC

ISSUE: WON the petitioners are liable for the damages.

HELD: Yes.

It has been ruled that “A party, having performed affirmative acts upon which another person based his subsequent actions
cannot thereafter refute his acts or renege on the effects of the same to the prejudice of the latter.” In this case, the
petitioners led the respondents to believe the purported accuracy of the resurvey and exactness of the lot’s boundaries
based on the monuments of title which they installed.

By virtue of Article 1170 of the NCC, the petitioners are guilty of a breach of their contract which makes them liable for
the damages suffered by the respondents.

Dagdag kaalaman:

Culpa Aquilana- a wrongful act or negligent act or omission which creates a vinculum juris(a legal bound) and give rise to an
obligation between two persons not formally bound by any other obligation. (Governed by art. 2176)

Culpa Contractual- the fault or negligence incident in the performance of an obligation which already existed, and which increases
the liability from such already existing obligation. (governed by art 1170 to 1174).
Eastern Shipping Lines vs. CA
FACTS
 On 1981, two fiber drums of riboflavin were shipped from Yokohama, Japan owned by defendant Eastern Shipping Lines under a bill
of lading. Shipment was insured under plaintiff's Marine Insurance Policy.

 Upon arrival of the shipment in Manila it was discharged unto the custody of defendant Metro Port Service, Inc.

 The latter excepted to one drum, said to be in bad order, which damage was unknown to plaintiff. 

 On January 7, 1982 defendant Allied Brokerage Corporation received the shipment from defendant Metro Port Service, Inc., one drum
opened and without seal.

 On January 8 and 14, 1982, defendant Allied Brokerage Corporation made deliveries of the shipment to the consignee's warehouse.
The latter excepted to one drum which contained spillages, while the rest of the contents was adulterated/fake. 

 Plaintiff contended that due to the losses/damage sustained by said drum, the consignee suffered losses totaling P19, 032.95, due to
the fault and negligence of defendants.

 Claims were presented against defendants who failed and refused to pay the same.

 As a consequence of the losses sustained, plaintiff was compelled to pay the consignee P19, 032.95 under the foretasted marine
insurance policy, so that it became subrogated to all the rights of action of said consignee against defendants. 

ISSUE WON A CLAIM FOR DAMAGES SUSTAINED ON A SHIPMENT OF GOODS CAN BE SOLIDARILY OR JOINT AND
SEVERAL, LIABLILITY OF THE COMMON CARRIER, THE ARRASTRE OPERATOR AND CUSTOMS BROKER?

HELD
 The common carrier's duty to observe the requisite diligence in the shipment of goods lasts from the time the articles are surrendered
to or unconditionally placed in the possession of, and received by, the carrier for transportation until delivered to, or until the lapse of
a reasonable time for their acceptance by, the person entitled to receive them (Arts. 1736-1738, Civil Code).

 When the goods shipped either are lost or arrive in damaged condition, a presumption arises against the carrier of its failure to observe
that diligence, and there need not be an express finding of negligence to hold it liable (Art. 1735, Civil Code). There are, of course,
exceptional cases when such presumption of fault is not observed but these cases, enumerated in Article 1734 of the Civil Code, are
exclusive, not one of which can be applied to this case. 

 As to the question of charging both the carrier and the arrastre operator with the obligation of properly delivering the goods to the
consignee, the legal relationship between the consignee and the arrastre operator is akin to that of a depositor and warehouseman
while the relationship between the consignee and the common carrier is similar to that of the consignee and the arrastre operator.

 Since it is the duty of the arrastre to take good care of the goods that are in its custody and to deliver them in good condition to the
consignee, such responsibility also devolves upon the carrier. Both the arrastre and the carrier are therefore charged with the
obligation to deliver the goods in good condition to the consignee.

 A factual finding of both the Supreme Court and the appellate court was that there was sufficient evidence that the shipment sustained
damage while in the successive possession of appellants.

 Accordingly, the liability imposed on Eastern Shipping Lines, Inc., the sole petitioner in this case, is inevitable regardless of whether
there are others solidarily liable with it.
EASTERN SHIPPING LINES, INC. V. CA AND MERCANTILE INSURANCE COMPANY, INC.
FACTS

Two fiber drums of Riboflavin(Vitamin B 2) were shipped from Yokohama, Japan for delivery vessel ‘SS Eastern comet’ owned by the Eastern
Shipping Lines (CARRIER). The shipment was insured under Mercantile’s Marine Insurance.

Upon arrival of the shipment in Manila, it was discharged unto the custody of Metro Port Service, Inc.(Arrestre Operator). The latter excepted to
one drum, said to be in bad order, which damage was unknown to Mercantile.

Allied Brokerage Corporation(broker) received the shipment from Metro Port, one drum opened and without seal.

Allied delivered the shipment to the consignee’s warehouse. The latter excepted to one drum which contained spillages, while the rest of the
contents was adultered/fake.

Mercantile contended that due to the losses and damages sustained by said drum, the consignee suffered losses amounting to P19,032.95, due to
the fault and negligence of Eastern, Metro Port, and Allied (defendants). Claims were presented against defendants who failed and refused to pay
the same.

As a consequence of the losses sustained, Mercantile was compelled to pay the consignee P19,032.95 under the marine insurance policy, so that it
became subrogated to all the rights of action of said consignee against defendants.

CFI held “these losses/damages occurred before the shipment reached the consignee while under the successive custodies of the defendants”
Thus, they were ordered to pay P19,032.95, with the present legal interest of 12% per annum from October 1, 1982. The date of filing of this
complaint, until fully paid.

The CA affirmed the decision of the CIF

ISSUES

1. WON the payment of legal interest on an award for loss or damages is to be computed from the time the complaint is filed or
from the date the decision appealed from is rendered.
2. WON the applicable rate is 12% of 6%

RULING

1. From the date the decision appealed from is rendered

2. 6%

The basic issue focuses on the application of either the 6% (under the Civil Code) or 12% (under Central Bank Circular) interest per annum.

The Central Bank Circular imposing 12% interest per annum applies only to loans or forbearance (a delay in enforcing rights or claims or
privileges) of money, goods or credits, and that the 6% interest under the Civil Code governs when the transaction involves the payment of
indemnities in the concept of damage arising from breach or a delay in the performance of obligation in general.

Add’l Notes:

 When an obligation, regardless of its source (law, contract, quasi-contract….) is breached, the contravener can be held liable for
damages under “Damages” Title XVIII of Civil Code
 Actual and compensatory damages application:
a. Breached Obligation + payment of a sum of money (loan or forbearance of money)
=the interest due should be that which may have been stipulated in writing (if any) the interest due shall earn legal interest from
the time it is JUDICIALLY demanded.
= In the absence of stipulation, 12% per annum to be computed from default either extrajudicial or judicial demand (Art. 1169)
b. Obligation but does not constitute a loan or forbearance of money is breached. 6% per annum of interest on the amount of
damages may be imposed at the discretion of the court.
=No interest shall be adjudged on UNLIQUIDATED claims or damages until the demand can be established with
REASONABLE CERTAINTY.
c. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the
case falls under a or b. shall be 12% per annum from such finality until its satisfaction. This interim period being deemed to
be by then an equivalent to a forbearance of credit.
LEGASPI OIL CO. INC V. CA/ BARNARDO OSERAOS

FACTS

 Bernand Oseraos acting through his authorize agents, had several transactions with Legaspi Oil Co. Inc.
For the sale of copra. [Price varies from time time depending on the prevailing market price]
 One authorized agent Jose Llover, has previous transaction with appellee for sale & delivery of copra.
 On the records he concluded: 70 tons at 95.00 per 100 kilograms; another sale 30 tons of 102.00 per 100
kilograms.
 Subsequently another designated agent signed a contract in behalf of appellant for sale of 100 tons at 79.00
per 100kls. with delivery terms of 25 days.
 Thereafter Llover signed contract for the sale of 100 tons of copra at 82.00 per 100 kilograms. with
delivery terms of 20 days.
 After period to deliver has lapsed, Oseros delivered only 46,334 kilograms leaving undelivered balance of
53,666.
 Petitioner made demands to comply with his contractual undertaking. But private respondent ignored the
same.
 Petitioner made final demand w/ warning that if private respondent failed to complete the delivery of the
balance petitioner would purchase the balance at the open market and charge the price to private
respondent.
 Still private respondent failed to fulfill his contractual obligation to deliver.
 Petitioners then exercised its right under the contract and purchased 53,666 kilograms of copra at the open
market with the prevailing price of 168.00 per 100 kilograms. A net loss 48,152.76 chargeable against
appellant
 Petitioner files a complaint against private respondents for breach of contract and for damages.
 CFI rendered decision holding Oseraos liable for damages in the amount od 48,152.76, attorneys fee and
litigation costs.
 Oseraos then Appealed

ISSUE: WON PRIVATE RESPONDENT OSERAOS IS LIABLE FOR DAMAGES ARRISING FROM FRAUD
OR BAD FAITH IN DELIBERATLY BRECHING THE CONTRACT OF SALE ENTERED INTO BY PARTIES.

RULING

 Clearly private respondent is guilty of fraud in the performance of his obligation under the sales of contract.
The conduct of private respondent clearly manifests his deliberate fraudulent intent to evade his contractual
obligation.
 Under Art. 1170 those who in the performance of their obligation are guilty of fraud, negligence, delay are
liable for damages. Pursuant to the said article, private respondent is liable for damages reasonably
attributSed to non-performance of the obligation.
SAMSON V. CA / ANGEL SANTOS
Subject matter is a commercial unit at Madrigal Bldg. Located at Recto Manila. Building was owned by Susana Realty Corp. Subject premises
was leased to private respondent Angel Santos owner of a haberdashery store Santos & sons Inc., for twenty years under a lease of contract
renewable yearly. The contract in force between the parties provided that the term of lease shall be 1 year. Thereafter the lessor informed the
respondent that lease contract was expiring and would not be renewed. Nonetheless, respondents lease contract was extended and continued to
occupy the leased premises beyond extended term.

On Feb 5, 1985, respondent received a letter from the lessor informing of rental increase, retroactive on January 1985, pending renewal of his
contract until the arrival of Maria Rosa Madrigal. (owner)

Petitioner Manalo Samson agreed to buy respondents rights to Madrigal Bldg. provided that petitioner will acquire all shares of Santos & Sons,
Ins. To avoid breach of contract with Madrigal. Respondent was also informed that the lease of contract with Madrigal was impliedly renewed
and will formally renewed when Madrigal arrives.

Petitioner then paid respondent of 150,000.00 representing the value of improvements in the store. The balance of 150,000.00 shall be paid upon
formal renewal of lease contract.

Petitioner then occupied Santos & Sons Inc. however petitioner received a notice from Susana Realty, directing the latter to vacate the leased
premises because respondent failed to renew his lease.

Petitioner was forced to vacate the same.

Petitioner filed a motion for damages. He imputed fraud and bad faith against respondent when the latter stated in his proposal that his lease
contract has been impliedly renewed.

Trial court rendered decision in favor of the petitioner.

Respondent appealed to CA , Appellate court modifies the decision of the trial court after finding that private respondent didn’t not exercise fraud
or bad faith.

ISSUE: WON PRIVATE RESPONDENT COMMITTED FRAUD OR BAD FAITH IN REPRESENTING TO PETITIONER THAT
HIS CONTRACT OF LEASE OVER THE SUBJECT PREMISES HAS BEEN IMPLIEDLY RENEWED.

HELD

Bad faith is thus synonymous with fraud and involves a design to mislead or deceive another, not prompted by an honest mistake as to one’s
rights or duties, but by some interested or sinister motive. The kind of fraud the will vitiate consent is one where, through insidious words or
machination of one of the contracting parties, the other is induces to enter into a contract which without them, he would not have agreed to. This
is known as dolo causante or casual fraud w/c is basically deception by one party prior to the contract in order to secure the consent of the other.

Private respondent was neither guilty of fraud nor bad faith in claiming that there was implied renewal of his contract of lease with Susana
Realty. Letter led private respondent to believe and conclude that his lease of contract was impliedly renewed and that formal renewal would be
made upon the arrival of Tanya madrigal. Thus, from the start both parties are aware that object thereof relates to future right. It is conditional
contract recognized in civil law.

Private respondent cannot be held guilty of fraud and bad faith when he entered in to subject contract with petitioner. Causal fraud or bad faith on
the part of the contracting parties which allegedly induced the other to enter into contract must be prove by clear or convincing evidence.