Chapter 1

ASTRID VAN DE BRUG V PNB, GR 207004, June 6, 2018

FACTS: The late spouses Romulus and Evelyn Aguilar used to be borrowing clients of PNB, Victoria
Branch. Their sugar crop loans, which were obtained sometime between late 1970’s and 80s, were
secured by a real estate mortgage over four parcels of land. However, for failure to pay their obligations,
the mortgage was foreclosed and ownership of the four properties was consolidated under the name of
PNB. When RA 7202 was enacted, the late Romulus Aguilar wrote PNB asking for the reconsideration of
their account based on the Sugar Restitution Law. PNB informed Evelyn that while the subject loan
account was covered by RA 7202, they still need to comply with other PNB requirements.

The Aguilars mentioned a similar case, Sps. Pfleider v PNB, where PNB entered into a compromise
agreement with Sps. Pfleider, notwithstanding consolidation of the foreclosed property under the bank’s
name. The Aguilars thus filed a case for implementation of RA 7202, with prayer for payment of
damages.

The RTC ruled in favor of the Aguilars, finding PNB guilty of malice and bad faith in not pursuing its
duty in helping the Aguilars of the benefits of RA 7202. Upon appeal, CA granted the appeal and
reversed the RTC decision.

ISSUE: w/n PNB has an obligation to accord the Aguilars the same treatment as it accorded the spouses
Pfleider regarding the crediting of the proceeds of their respective agricultural lots against their respective
sugar crop loans covered by RA 7202

HELD: NO. The sources of obligations under Article 1157 of the Civil Code are: (1) law; (2) contracts;
(3) quasi-contracts; (4) acts or omissions punished by law; and (5) quasi-delicts. Immediately, sources (2),
(3) and (4) are inapplicable in this case. The Aguilars are not privies to the Compromise Agreement
between PNB and the spouses Pfleider because: (1) the former are not parties thereto; (2) the principle of
relativity of contract would be violated; and (3) PNB 's freedom to enter into contracts would also be
violated if PNB would be compelled to accommodate the Aguilars.

Regarding law, as PNB's source of obligation, the CA correctly ruled that the Aguilars are not entitled to
restitution under RA 7202. The duly notarized Compromise Agreement between the spouses Pfleider and
PNB that the accounts of the former to the latter were crop loans ("sugar and sugar-related loans") and,
thus, covered by RA 7202, unlike the accounts of the Aguilars which included non-RA 7202 accounts.
Since the Aguilars were delinquent in their accounts, including their non-RA 7202 accounts, and the
mortgaged properties of the Aguilars similarly secured the non-RA 7202 accounts, PNB had no option
but to foreclose the mortgage. Thus, RA 7202 cannot be invoked as the statutory basis to compel PNB to
treat the Aguilars similarly with the spouses Pfleider.

RAMON REYES and CLARA PASTOR V BANCOM, GR 190286, January 11, 2018

FACTS: The dispute in this case originated from a Continuing Guaranty executed in favor of respondent
Bancom by Angel E. Reyes, Sr., FlorencioReyes, Jr., Rosario R. Du, Olivia Arevalo, and the two
petitioners herein, Ramon E. Reyes and Clara R. Pastor (the Reyes Group). In the instrument, the Reyes
Group agreed to guarantee the full and due payment of obligations incurred by Marbella Realty under an
Underwriting Agreement with Bancom. At the time of maturity of the loan, Marbella was unable to pay
and it consequently issued a set of replacement Promissory Notes. After defaulting on the second set of
PNs, Marbella issued a third, and then a fourth set, for a total amount of P3M. Because of Marbella’s
continued failure to pay back the loan despite repeated demands, Bancom filed a Complaint for Sum of
Money against Marbella and the Reyes Group.

RTC held Marbella and the Reyes Group solidarily liable to Bancom. The CA denied the appeal citing the
undisputed fact that Marbella and the Reyes Group failed to comply with their obligations.

ISSUE: w/n CA was correct in holding petitioners liable to Bancom

HELD: YES. As guarantors of the loans of Marbella, petitioners are liable to Bancom. Having executed a
Continuing Guaranty in favor of Bancom, petitioners are solidarily liable with marbella for the payment
of the amounts indicated on the Promissory Notes. The obligations of Marbella and the Reyes Group
under the PNs and the Continuing Guaranty are plain and unqualified. Under the PNs, Marbella promised
to pay Bancom the amounts stated on the maturity dates indicated. The Reyes Group, on the other hand,
agreed to become liable if any of Marbella’s guaranteed obligations were not duly paid on the due date. It
is clear that Bancom extended additional financing to Marbella on the condition that the loan would be
paid upon maturity. It is equally clear that the latter obligated itself to pay the amount to Bancom without
any condition. The unconditional tenor of the obligation of Marbella to pay Bancom for the loan amount,
plus interest and penalties, is likewise reflected in the Promissory Notes issued in favor of the latter. The
CA therefore correctly rejected the attempt of petitioners to renege on their obligations.

Abrogar v. Cosmos Bottling Corp. G.R. 164749, Mar. 15, 2017

FACTS: To promote the sales of "Pop Cola", defendant Cosmos, jointly with Intergames, organized an endurance running contest billed as
the "1st Pop Cola Junior Marathon" scheduled to be held on June 15, 1980. The organizers plotted a 10-kilometer course starting from the
premises of the Interim Batasang Pambansa (IBP for brevity), through public roads and streets, to end at the Quezon Memorial Circle.
Plaintiffs' son Rommel applied with the defendants to be allowed to participate in the contest and after complying with
defendants' requirements, his application was accepted and he was givenan official number. Consequently, on June 15, 1980 at
the designated time of the marathon, Rommel joined the other participants and ran the course plotted by the defendants.
As it turned out, the plaintiffs' further alleged, the defendants failed to provide adequate safety and precautionary measures and to
exercise the diligence required of them by the nature of their undertaking, in that they failed to insulate and protect the participants of the
marathon from the vehicular and other dangers along the marathon route. Rommel was bumped by a jeepney that was then running along
the route of the marathon on Don Mariano Marcos Avenue (DMMA for brevity), and in spite of medical treatment given to him at the Ospital
ng Bagong Lipunan, he died later that same day due to severe head injuries.

On October 28, 1980, the petitioners sued the respondents in the then Court of First Instance of Rizal to recover various damages for the
untimely death of Rommel. Cosmos denied liability, insisting that it had not been the organizer of the marathon, but only its sponsor; that its
participation had been limited to providing financial assistance to Intergames; that the financial assistance it had extended to Intergames, the
sole organizer of the marathon, had been in answer to the Government's call to the privatesector to help promote sports development and
physical fitness; that the petitioners had no cause of action against it because there was no privity of contract between the

participants in the marathon and Cosmos; and that it had nothing to do with the organization, operation and running of the event.
Intergames asserted that Rommel's death had been an accident exclusively caused by the negligence of the jeepney driver; that it was not responsible for the
accident; that as the marathon organizer, it did not assume the responsibilities of an insurer of the safety of the participants; that it nevertheless caused the
participants to be covered with accident insurance, but the petitioners refused to accept the proceeds thereof; that there could be no cause of action against it
because the acceptance and approval of Rommel's application to join the marathon had been conditioned on his waiver of all rights and causes of action arising
from his participation in the marathon; that it exercised due diligence in the conduct of the race that the circumstances called for and was appropriate, it having
availed of all its know-how and expertise, including the adoption and implementation of all known and possible safety and precautionary measures in order to
protect the participants from injuries arising from vehicular and other forms of accidents; and, accordingly, the complaint should be dismissed.

ISSUE: Whether or not the respondent failed to exercise the diligence of a good father of the family in the conduct of the marathon

HELD: Negligence is the failure to observe for the protection of the interests of another person that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person suffers injury. Under Article 1173 of the Civil Code, it consists of the "omission of that diligence which is
required by the nature of the obligation and corresponds with the circumstances of the person, of the time and of the place”. The Civil Code makes liability for
negligence clear under Article 2176, and Article 20. A careful review of the evidence presented, in accordance with the foregoing guidelines reasonably leads to
the conclusion that the safety and precautionary measures undertaken by Intergames were short of the diligence demanded by the circumstances of persons, time
and place under consideration. Hence, Intergames as the organizer was guilty of negligence.

The Court considered the "safeguards" employed and adopted by Intergames not adequate to meet the requirement of due diligence. The circumstances of the
persons, time and place required far more than what Intergames undertook in staging the race. Due diligence would have made a reasonably prudent organizer of
the race participated in by young, inexperienced or beginner runners to conduct the race in a route suitably blocked off from vehicular traffic for the safety and
security not only of the participants but the motoring public as well. Since the marathon would be run alongside moving vehicular traffic, at the very least,
Intergames ought to have seen to the constant and closer coordination among the personnel manning the route to prevent the foreseen risks from
befalling the participants. But this is sadly failed to do.
Pilipinas Petroleum v. Duque, G.R. 216467, Feb. 15, 2017
FACTS: The instant petition arose from an Information for violation of Batas Pambansa Big. 22 (BP 22)
filed with the Metropolitan Trial Court (MeTC) of Makati City against herein respondents. 

Pilipinas Shell Petroleum Corporation (PSPC) is a lessee of a building known as Shell House at 156
Valero Street, Salcedo Village, Makati City. On August 23, 2000, PSPC subleased a 500-meter portion of
the 2nd Floor of the Shell Building to the The Fitness Center (TFC). Thereafter, TFC encountered
problems in its business operations. Thus, with the conformity of PSPC, TFC assigned to Fitness
Consultants, Inc, (FCI) all its rights and obligations under the contract of sublease executed by PSPC in
its favor. Respondent Carlos Duque is the proprietor, while respondent Teresa Duque is the corporate
secretary of FCI. Subsequently, FCI failed to pay its rentals to PSPC. FCI subsequently issued a check,
with respondents as signatories, which would supposedly cover FCI's obligations to PSPC. However, the
check was dishonored, thus, leading to the filing of a criminal complaint against respondents for their
alleged violation of BP 22. The parties then went to trial, which subsequently resulted in a verdict finding
herein respondents guilty as charged. A Fine and civil indemnity to the private complainant was imposed.
Respondents appealed the MeTC Decision with the RTC of Makati. On March 16, 2011, the RTC of
Makati City, Branch 143, rendered judgment acquitting respondents. However the Court maintains the
civil liability to be indemnified to the complainant. Respondents filed a Motion for Partial Reconsideration
of the RTC Decision contending that they could not be held civilly liable because their acquittal was due to
the failure of the prosecution to establish the elements of the offense charged. In addition, they assert that
they, being corporate officers, may not be held personally and civilly liable for the debts of the corporation
they represent, considering that they had been acquitted of criminal liability. In an Order dated September
2, 2011, the RTC found merit in respondents' Motion for Partial Reconsideration. On March 23, 2012, the
RTC issued an Order granting PSPC's motion for reconsideration, thus, reviving the RTC Decision of
March 16, 2011. Respondents filed a petition for review with the CA. The CA basically held that, upon
acquittal, the civil liability of a corporate officer in a BP 22 case is extinguished with the criminal liability,
without prejudice to an independent civil action which may be pursued against the corporation. Petitioner
filed a motion for reconsideration, but the CA denied it in its Resolution dated January 14, 2015.

ISSUE: Whether or not the respondents, as corporate officers, may still be held civilly liable despite their
acquittal from the criminal charge of violation of BP 22.

HELD: No. The Court rules in the negative.

In the case of Gosiaco v. Ching, this Court enunciated the rule that a corporate officer who issues a
bouncing corporate check can only be held civilly liable when he is convicted. When a corporate officer
issues a worthless check in the corporate name he may be held personally liable for violating a penal
statute. The statute imposes criminal penalties on anyone who with intent to defraud another of money or
property, draws or issues a check on any bank with knowledge that he has no sufficient funds in such
bank to meet the check on presentment. Moreover, the personal liability of the corporate officer is
predicated on the principle that he cannot shield himself from liability from his own acts on the ground that
it was a corporate act and not his personal act.

It is clear that the civil liability of the corporate officer for the issuance of a bouncing corporate check
attaches only if he is convicted. Conversely, therefore, it will follow that once acquitted of the offense of
violating BP 22; a corporate officer is discharged from any civil liability arising from the issuance of the
worthless check in the name of the corporation he represents. This is without regard as to whether his
acquittal was based on reasonable doubt or that there was a pronouncement by the trial court that the act
or omission from which the civil liability might arise did not exist.

Moreover, in the present case, nothing in the records at hand would show that respondents made
themselves personally nor solidarily liable for corporate obligations either as accommodation parties or
sureties. On the contrary, there is no dispute that respondents signed the subject check in their capacity
as corporate officers and that the check was drawn in the name of FCI as payment for the obligation of
the corporation and not for the personal indebtedness of respondents. Neither is there allegation nor proof
that the veil of corporate fiction is being used by respondents for fraudulent purposes. The rule is that
juridical entities have personalities separate and distinct from its officers and the persons composing it.
Generally, the stockholders and officers are not personally liable for the obligations of the corporation
except only when the veil of corporate fiction is being used as a cloak or cover for fraud or illegality, or to
work injustice, which is not the case here. Hence, respondents cannot be held liable for the value of the
checks issued in payment for FCI's obligation.

Arturo Pelayo vs. Marcelo Lauron, G.R. No. L-4089, January 12, 1909, 12 Phil. 453

FACTS: On or about October 13, 1906, the plaintiff Arturo Pelayo was called to the house of the
defendants, Marcelo Lauron and Juana Abella situated in San Nicolas, and that upon arrival he
was requested by them to render medical assistance to their daughter-in-law who was about to
give birth to a child. After consultation with the attending physician, Dr. Escaño, the plaintiff
found it necessary to remove the fetus by means of an operation, in which service he was
occupied until the following morning, and had visited the patient several times. The equitable
value of the services rendered by the plaintiff was P500.00, which the defendants refused to
pay. On November 23, 1906, the plaintiff filed a complaint against the defendants and prayed
that the judgment be rendered in his favor as against the defendants, or any of them, for the
sum of P500 and costs, together with any other relief that may be deemed proper. In answer,
the defendants denied all allegations and alleged as a special defense, that their daughter-in-
law died as a consequence of the said childbirth, and when she was still alive she lived with her
husband independently and in a separate house and without any relation whatsoever with
them, and on the day she gave birth she was in the house of the defendants and her stay there
was accidental and due to fortuitous circumstances. Thus, the defendants prayed that they be
absolved from the complaint with costs against the plaintiff.

The plaintiff demurred the answer and that the lower court sustained the demurrer
directing the defendants to amend their answer. In compliance, the defendants amended their
answer denying each and every allegation contained in the complaint. The lower court
rendered judgment in favor of the defendants absolving them from the complaint.

ISSUE: The issue is whether or not the parents-in-law are under any obligation to pay the fees
claimed by the plaintiff.

HELD: The defendants were not, nor are they now, under any obligation by virtue of any legal
provision, to pay the fees claimed, nor in consequence of any contract entered into between
them and the plaintiff from which such obligation might have arisen.
The rendering of medical assistance in case of illness is comprised among the mutual
obligations to which spouses are bound by way of mutual support. When either of them by
reason of illness should be in need of medical assistance, the other is under the unavoidable
obligation to furnish the necessary services of a physician in order that the health may be
restored; the party bound to furnish such support is therefore, liable for all the expenses,
including the fees of the medical expert for his professional services. The liability arises from
the obligation, which the law has expressly established, between married couples. It is
therefore the husband of the patient who is bound to pay for the services of the plaintiff. The
fact that it was not the husband who called the plaintiff and requested the medical assistance
for his wife is no bar to his fulfillment of such obligation, as the defendants, in view of the
imminent danger to which the life of the patient was at that moment exposed, considered that
the medical assistance was urgently needed. Therefore, plaintiff should direct his action against
the husband of the patient, and not against her parents-in-law.