PRELIMINARY CONSIDERATIONS

SAGRADA ORDEN DE PREDICADORES DEL SANTISMO ROSARIO DE

FILIPINAS

v.

NATIONAL COCONUT CORPORATION

G.R. No. L-3756

June 30, 1952

Labrador, J.

Facts:

The subject matter at hand is a parcel of land belonging to Sagrada Orden De

Predicadores Del Santismo Rosario De Filipinas (Sagrada). During the Japanese Occupation
on January 4, 1943 the land was acquired by a Japanese corporation by the name of Taiwan
Tekkosho for P140. After liberation, the United States’ Alien Property Custodian took
possession, control, and custody of the land as it was the property of the enemy. In the year
1946, property was occupied by the Copra Export Management Company under a
custodianship agreement with United States Alien Property Custodian and would later be
occupied by the National Coconut Corporation.

Sagrada made claim to the property before the Alien Property Custodian but was
denied. Thus he filed a case in the Court of First Instance to annul the sale of property of
Taiwan Tekkosho, and recover its possession claiming the sale to be null and void as it was
attained by threat, intimidation, and duress. It was agreed that the title cancelled and returned
to Sagrada but he was not given the right to recover from the National Coconut Corporation
reasonable rentals for the use and occupation of the premises. Hence the appeal. The National
Coconut Corporation claims that it occupied the property in good faith and has no obligation
whatsoever to pay rentals for the use and occupation of the warehouse.

Issue: Whether the National Coconut Corporation must pay rentals to Sagrada
Held:

No. National Coconut Corporation’s obligations must arise from any of the four
sources of obligations, namley, law, contract or quasi-contract, crime, or negligence. The
defendant is not guilty of an offense because it entered the premises and occupied it with the
permission of the entity which had the legal control and administration thereof which was the
Alien Property Administration and neither was there any negligence on their part. There was
also no contract or obligation between the Alien Property Administration and the Taiwan
Tekkosho and thus the administration and the corporation cannot be held responsible for the
supposed illegal occupation of the property. Neither is it a trustee of the former owner but the
trustee of the United States government. Therefore, even if the National Coconut Corporation
were liable to the Alien Property Administration for rentals, these would not accrue to the
benefit of the Sagrada but to the United States Government. There was even no agreement
between the Alien Property Administration and the National Coconut Corporation to pay
rentals. Thus, the corporation shall not pay any rentals to Sagrada.
 CONCEPT OF TORTS

SERGIO F. NAGUIAT, doing business under the name and style SERGIO F.
NAGUIAT ENT., INC., & CLARK FIELD TAXI, INC

v.

NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION)

G.R. No. 116123

March 13, 1997

Facts:

Clark Field Taxi, Inc (CFTI) whose president was Sergio Naguiat held a
concessionaire's contract with the Army Air Force Exchange Services (AAFES) for the
operation of taxi services within Clark Air Base. The individual respondents are employed
taxi drivers of CFTI who were required to pay a daily “boundary fee” and all expenses for
fuel and vehicle maintenance were accounted against them yet they earned not less than $15
daily. Due to the phase-out of the US military bases in the Philippines, the AAFES was
dissolved and the services of the individual respondents terminated. The AAFES Taxi
Drivers Association, the union of the drivers, held negotiations on separation benefits
amounting to P500.00 for every year of service as severance pay. which were not accepted by
the individual respondents.

The individual respondents left the drivers’ union and went to another union called
the National Organization of Workingmen (NOWM) and filed a complaint against AAFES
claiming that they were entitled to separation pay based on their latest daily earnings of
US$15.00 for working sixteen days a month as they were regular workers of CFTI. The labor
arbiter ruled in favour of the individual respondents and ordered AAFES to pay them
P1,200.00 for every year of service. The National Labor Relations Commission (NLRC)
modified the ruling by granting separation pay to the individual respondents hence the appeal
to the Supreme Court.

Issue: Whether the individual respondents are entitled to separation pay.

Held:

Yes. AAFES closed their taxi business due to the US air bases being phased out, not
due to great financial loss. Article 283 of the Labor Code provides that in case of
retrenchment to prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one month pay or at least one-half month pay for every
year of service, whichever is higher. A fraction of at least six months shall be considered one
whole year. Thus, the individual respondents are entitled to separation pay.

The individual respondents, however, failed to substantiate their claim that Naguiat
Enterprises managed, supervised and controlled their employment. They presumed that
Sergio Naguiat, who was at the same time a stockholder and director of Sergio F. Naguiat
Enterprises, Inc., was managing and controlling the taxi business on his behalf. Sergio
Naguiat, in supervising the taxi drivers and determining their employment terms, was simply
carrying out his responsibilities as president of CFTI. Hence, Naguiat Enterprises as a
separate corporation does not appear to be involved at all in the taxi business and CFTI was
the actual and direct employer of individual respondents

Sergio F. Naguiat cannot be exonerated from joint and several liability in the payment
of separation pay to the individual respondents. He actively managed the business and thus he
is the employer of the individual respondents under the labor code who may be held jointly
and severally liable for the obligations of the corporation to its dismissed employees. The
petitioners also conceded that both CFTI and Naguiat Enterprises were close family
corporations owned by the Naguiat family. Under Title XII, section 100, paragraph 5, of the
Corporation Code, states:

“To the extent that the stockholders are actively engage(d) in the management or
operation of the business and affairs of a close corporation, the stockholders shall be
held to strict fiduciary duties to each other and among themselves. Said stockholders
shall be personally liable for corporate torts unless the corporation has obtained
reasonably adequate liability insurance.”

Tort consists in the violation of a right given or the omission of a duty imposed by
law. It is a breach of legal duty. Article 283 of the Labor Code mandates the employer to
grant separation pay to employees in case of closure or cessation of operations of
establishment or undertaking not due to serious business losses or financial reverses and
CFTI failed to comply with this legal duty. Consequently, its stockholder who was actively
engaged in the management or operation of the business should be held personally liable.

Antolin Naguiat, while vice president of CFTI and carrying the title of general
manager, it had not been shown that he had acted in such capacity and no evidence on the
extent of his participation in the management or operation of the business was preferred.
Thus, he cannot be held solidarily liable for the obligations of CFTI and Sergio Naguiat.
GASHEM SHOOKAT BAKSH

v.

HON. COURT OF APPEALS and MARILOU T. GONZALES

G.R. No. 97336

February 19, 1993

Davide, Jr. J.

Facts:

Marilous Gonzales filed a complaint in the trial court against Gashem Shookat Baksh,
who is an Iranian citizen and medical exchange student, for the alleged violation of their
agreement to get married. They were in a live in arrangement until Baksh began to abuse her
and revealed that he was married to another person already. Baksh in turn denied her claims
and that the mere breach of a promise is not actionable. The lower court decided in favour of
Gonzales applying Article 21 of the Civil Code. The Court of Appeals affirmed the decision.

Issue: Whether a breach of promise to marry is an actionable wrong.

Held:

Yes. Congress deliberately eliminated from the draft of the New Civil Code the
provisions that would have made the breach of a promise to marry an actionable wrong.
However, the New Civil Code has Article 21 which expanded the concept of a tort or quasi-
delict by granting a legal remedy for the untold number of moral wrongs which is impossible
for human foresight to specifically enumerate and punish in the statute books. Article 2176 of
the Civil Code, which defines a quasi-delict:

Whoever by act or omission causes damage to another, there being fault or

negligence, is obliged to pay for the damage done. Such fault or negligence, if there is
no pre-existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.

A quasi-delict is also known as culpa aquiliana. Torts is much broader than culpa
aquiliana because it includes not only negligence, but international criminal acts as well such
as assault and battery, false imprisonment and deceit.

Where a man's promise to marry is in fact the proximate cause of the acceptance of
his love by a woman and his representation to fulfil that promise thereafter becomes the
proximate cause of the giving of herself unto him sexually but he in reality had no intention
of marrying her and that the promise was only a subtle scheme to entice her to accept him and
to obtain her consent to the sexual act, could justify the award of damages pursuant to Article
21 not because of such promise to marry but because of the fraud and deceit behind it and the
wilful injury to her honor and reputation which followed thereafter. It is essential; however,
that such injury should have been committed in a manner contrary to morals, good customs or
public policy. Baksh has committed moral seduction but not criminal seduction as Gonzales
is over 18 years of age. Article 21 of the New Civil Code may apply to those who are victims
of moral seduction.

The pari delicto rule does not apply in this case for while the Gonzales may not have
been impelled by the purest of intentions, she eventually submitted to the petitioner in sexual
congress not out of lust, but because of moral seduction. In fact, it is apparent that she had
qualms of conscience about the entire episode for as soon as she found out that the petitioner
was not going to marry her after all, she left him. She is thus not in equal fault.
BACOLOD-MURCIA MILLING CO., INC.

v.

FIRST FARMERS MILLING CO., INC., ETC.; RAMON NOLAN in his capacity as
Administrator of the Sugar Quota Administration, ET AL; PHILIPPINE NATIONAL
BANK and NATIONAL INVESTMENT AND DEVELOPMENT CORPORATION

G.R. No. L-29041

March 24, 1981

Melencio-Herrera, J.

Facts:

Bacolod-Murcia Milling Co., Inc. (Bacolod-Murcia) for Injunction and Prohibition

with Damages against First Farmers Milling Co., Inc. (FFMC), various named, and Ramon
Nolan in his capacity as Administrator of the Sugar Quota Administration alleging that
FFMC operated a sugar central known as the First Farmers Sugar Central and for the crop
years 1964-65 and 1965-66, transferred their quota "A" allotments to FFMC with the
approval of their co-defendant the Sugar Quota Administration which was met with vigorous
protest and objections from Bacolod-Murcia. Philippine National Bank (PNB) and National
Investment and Development Corporation (NIDC) were included as respondents in an
Amended and Supplemental Complaint as they were creditors.

The respondents claim that the construction of a sugar central did not violate any
rights of the plaintiff in view of the fact that the said loans were extended in the ordinary and
usual course of business. Thus they have committed no tortious actions against Bacolod-
Murcia. The trial court dismissed the case against the respondents.

Issue: Whether the allegations of the Amended and Supplemental Complaint constituted a
sufficient cause of action against the PNB and NIDC.

Held:

No. The Complaint must contain a concise statement of the ultimate facts constituting
the plaintiff's cause of action. Ultimate facts are the important and substantial facts which
either directly form the basis of the plaintiff's primary right and duty, or directly make up the
wrongful acts or omissions by the defendant. The allegations in the Complaint must be
accepted as true and it is not permissible to go beyond and outside of them for date or facts.
The test of sufficiency of the facts alleged is whether or not the Court could render a valid
judgment as prayed for accepting as true the exclusive facts set forth in the Complaint.
 Nowhere is it alleged that defendants-appellees had notice, information or knowledge
of any flaw, much less any illegality, in their co-defendants' actuations. This absence causes
the Amended and Supplemental Complaint to fail the test and neither does the complaint aver
any act of bad faith on the respondents. Such a bare statement neither establishes any right or
cause of action on the part of Bacolod-Murica. It is a mere conclusion of law not sustained by
declarations of facts.

What appears from the record is that PNB and NIDC came into the picture in the
ordinary and usual course of its business after the borrowing entity had established itself as
capable of being treated as a new milling district because it could already operate and had its
array of adhering planters. The doing of an act which is in itself perfectly lawful will not
render one liable as for a tort, simply because the unintended effect of such act is to enable or
assist another person to do or accomplish a wrong assuming that there is a wrong.
 Quasi-Delicts

a. Concept and Requisites

PORFIRIO P. CINCO

v.

HON. MATEO CANONOY, Presiding Judge of the Third Branch of the Court of First
Instance of Cebu, HON. LORENZO B. BARRIA City Judge of Mandaue City, Second
Branch ROMEO HILOT, VALERIANA PEPITO and CARLOS PEPITO

G.R. No. L-33171

May 31, 1979

Melencio-Herrera, J.

Facts:

Porfirio Cinco filed a complaint in the City Court of Mandaue for the recovery of
damages on account of a vehicular accident involving his automobile and a jeepney driven by
Romeo Hilot and operated by Valeriana Pepito and Carlos Pepito who are the respondents. A
criminal case was also filed against Romeo Hilot and during the pre-trial of the civil case,
Hilot’s counsel moved to suspend the civil action pending the determination of the criminal
suit which was granted. Cinco elevated the matter to the Court of First Instance but was
dismissed stating that damage to property is not one of the instances when an independent
civil action is proper; that petitioner has another plain, speedy, and adequate remedy under
the law, which is to submit his claim for damages in the criminal case; that the resolution of
the City Court is interlocutory and, therefore, certiorari is improper; and that the petition is
defective inasmuch as what petitioner actually desires is a Writ of Mandamus

Issues: Whether there may be an independent civil action for damage to property.

Held:

Yes. It is evident that the nature and character of Cinco’s action was quasi-delictual
predicated principally on Articles 2176 and 2180 of the Civil Code and claimed that there
was a direct causal connection between the damages he suffered and the fault and negligence
of private respondents. The separate and independent civil action for a quasi-delict is also
clearly recognized in section 2, Rule 111 of the Rules of Court.

The City Court erred in placing reliance on section 3 (b) of Rule 111 of the Rules of
Court, which refers to "other civil actions arising from cases not included in the section just
cited" in which case once the criminal action has being commenced, no civil action arising
from the same offense can be prosecuted and the same shall be suspended in whatever stage it
may be found, until final judgment in the criminal proceeding has been rendered." Stated
otherwise, the civil action referred to in Secs. 3(a) and 3(b) of Rule 111 of the Rules of Court,
which should be suspended after the criminal action has been instituted is that arising from
the criminal offense not the civil action based on quasi-delict.

Article 31 of the Civil Code then clearly assumes relevance which provides that when
a civil action is based on an obligation not arising from the act or omission complained of as
a felony, such civil action may proceed independently of the criminal proceedings and
regardless of the result of the latter. The jural concept of a quasi-delict is that of an
independent source of obligation "not arising from the act or omission complained of as a
felony.".

The case is based on quasi-delict which is so broad that it includes not only injuries to
persons but also damage to property. It makes no distinction between damage to persons and
damage to property. The word "damage" is used in two concepts: the "harm" done and
"reparation" for the harm done. And with respect to harm it is plain that it includes both
injuries to person and property since "harm" is not limited to personal but also to property
injuries.

Thus, the respondent judge gravely abused his discretion in upholding the Decision of
the City Court of Mandaue City, Cebu, suspending the civil action based on a quasi-delict
until after the criminal case is terminated.
PEDRO ELCANO and PATRICIA ELCANO, in their capacity as Ascendants of
Agapito Elcano, deceased

v.

REGINALD HILL, minor, and MARVIN HILL, as father and Natural Guardian of
said minor

G.R. No. L-24803

May 26, 1977

Barredo, J.

Facts: