OBLIGATIONS AND CONTRACTS

EXAMS: Only Midterms and Finals

Removal exams?: NO

Recommended book: Paras

ASSIGNMENT FOR

– ARTICLE 1156 – 1178

ANSWER DIRECTLY – WHAT IS BEING ASKED

The Civil Code of the Philippines

AN ACT TO ORDAIN AND INSTITUTE THE CIVIL CODE OF THE PHILIPPINES

TITLE V – PRESCRIPTION

CHAPTER I – General Provisions

Cases:

1. Narciso Buenaventura & Maria Buenaventura v. CA & Manotok Realty, Inc. [GR 50837,

Dec. 28, 1992]

FACTS:

Petitioners' allegation in their complaint filed in the court of origin, that fraud was employed in the
execution of a deed of sale and subsequently, in the issuance of a transfer certificate of title, renders
their action for reconveyance susceptible to prescription either within 4 years or 10 years. In the present
case, even if one bends backwards and considers the circumstances alleged as having created an implied
or constructive trust, such that the action for reconveyance would prescribed in the longer period of 10
years, still petitioners' action is plainly time-barred. Considering that the deed of sale executed by the
Philippine Homesite and Housing Corporation in favor of Lorenzo Caiña and Francisca Caiña-Rivera was
executed on November 4, 1965 and on the following day, Transfer Certificate of Title No. 21484 was
issued in favor of the vendees (private respondents), the party allegedly defrauded in the transaction,
herein petitioners, had only 10 years or until September 5, 1975 within which to file the appropriate
action. In the instant case, the action was filed only on December 28, 1976, which was beyond the
prescribed period set by law. Aggrieved by the rules of the trial court, herein private respondents filed a
petitioner with the Court of Appeals which later granted the petitioner and ordered the dismissal of the
complaint of then private respondents, now herein petitioners, on the ground that their action has
already prescribed. A subsequent motion for reconsideration was to no avail.

ISSUE: Whether or not petitioner Court of Appeals erred in the decision

RULING: No, The defendant-appellee purchased the parcel of land in question giving rise to the
complaint of herein plaintiffs-appellants. The latter delayed the assertion of their supposed right to
annul the sale for a period of over fifteen (15) years despite knowledge or notice of such sale. They had
all the opportunity within that period of time to take action to set aside or annul the sale. Defendant-
appellee was never apprised of any intention on the part of plaintiffs-appellants to annul the sale until
this action was filed. Finally, the defendant-appellee stands to lose the property in question if the suit
filed against him by plaintiffs-appellants shall be deemed barred.

2. Philippine Carpet Manufacturing Corporation vs. Tagyamon [G.R. No. 191475, December 11, 2013]

https://casedigests-ph.blogspot.com/2017/08/philippine-carpet-manufacturing-corp-v.html

http://lawschoolnoob.blogspot.com/2019/05/case-digest-philippine-carpet.html?m=0

3. Phil-Air Conditioning Center vs. RCJ Lines, [G.R. No. 193821, November 23, 2015]

https://lawyerly.ph/digest/cf013?user=704

http://fugatio.blogspot.com/2016/11/phil-air-conditioning-center-vs-rcj.html

CHAPTER II – Prescription of Ownership and Other Real Rights

Cases:

1. Abalos vs. Heirs of Torio [G.R. No. 175444, December 14, 2011]

https://lawphil.net/judjuris/juri2011/dec2011/gr_175444_2011.html

ISSUE: WON petitioners have acquired ownership over the disputed property through ordinary
acquisitive prescription

RULING: No, petitioners have not acquired ownership over the disputed property through
ordinaryprescriptionAcquisitive prescription of dominion and other real rights may be ordinary or
extraordinary. Ordinaryacquisitive prescription requires possession in good faith and with just title for
ten (10) years. Without goodfaith and just title, acquisitive prescription can only be extraordinary in
character which requiresuninterrupted adverse possession for thirty (30) years. Possession "in good
faith" consists in the reasonable belief that the person from whom the thing isreceived has been the
owner thereof, and could transmit his ownership.There is "just title" when theadverse claimant came
into possession of the property through one of the modes recognized by law for theacquisition of
ownership or other real rights, but the grantor was not the owner or could not transmit anyright.

2. Pabalan vs. Heirs of Maamo, Sr. [G.R. No. 174844, March 20, 2013]

http://deangodsmanginsay.blogspot.com/2014/09/case-digest-gr-no-174844-march-20-2013.html

https://lawphil.net/judjuris/juri2013/mar2013/gr_174844_2013.html

3. Pacheco, et.al vs. CA [G.R. No. L-48689, August 31, 1987]

https://lawphil.net/judjuris/juri1987/aug1987/gr_l_48689_1987.html

https://lawyerly.ph/digest/c6bd4?user=1170

4. Rodriguez, Sr. vs. Francisco [G.R. No. L-13343, December 29, 1962]

https://lawphil.net/judjuris/juri1962/dec1962/gr_l-13343_1962.html

6. Heirs of Malabanan vs. Republic [G.R. No. 179987, April 29, 2009]

https://pdfcoffee.com/3-south-city-homes-v-republicdocx-pdf-free.html

7. South City Homes, Inc. v. Republic, [G.R. No. 76564, May 25, 1990]

8. Ruiz v. Court of Appeals [G.R. No. L-29213, October 21, 1977]

9. Limcoma Multi-Purpose Cooperative v. Republic [G.R. No. 167652, July 10, 2007]

Prescription of Ownership and Other Real Rights

https://codalsetal.tumblr.com/post/79236239305/civil-code-of-the-philippines-book-iii-title-v

Article 1117. Acquisitive prescription of dominion and other real rights may be ordinary or
extraordinary.

Ordinary acquisitive prescription requires possession of things in good faith and with just title for the
time fixed by law. (1940a)
Article 1118. Possession has to be in the concept of an owner, public, peaceful and uninterrupted.
(1941)

Article 1119. Acts of possessory character executed in virtue of license or by mere tolerance of the
owner shall not be available for the purposes of possession. (1942)

Article 1120. Possession is interrupted for the purposes of prescription, naturally or civilly. (1943)

Article 1121. Possession is naturally interrupted when through any cause it should cease for more
than one year.

The old possession is not revived if a new possession should be exercised by the same adverse
claimant. (1944a)

Article 1122. If the natural interruption is for only one year or less, the time elapsed shall be counted
in favor of the prescription. (n)

Article 1123. Civil interruption is produced by judicial summons to the possessor. (1945a)

Civil interruption - through judicial summons, interruption of ownership

Running of prescriptive period is interrupted.

Article 1124. Judicial summons shall be deemed not to have been issued and shall not give rise to
interruption:

(1) If it should be void for lack of legal solemnities;

(2) If the plaintiff should desist from the complaint or should allow the proceedings to lapse;

(3) If the possessor should be absolved from the complaint.

In all these cases, the period of the interruption shall be counted for the prescription.

In all these cases, the period of the interruption shall be counted for the prescription. (1946a)

• Case: Heirs of Spouses Tanyag vs. Gabriel [G.R. No. 175763, April 11, 2012]

-for prescription of ownership, the interruption is only through judicial summons

-the case was not a judicial summon because there was no court intervention
Article 1125. Any express or tacit recognition which the possessor may make of the owner’s right also
interrupts possession. (1948)

(1) Recognition by Possessor of Owner’s Right

Reason for the Article — Here the possession is no longer in concepto de dueño or adverse.

-possesor was made aware of the one’s who are saying they own the property and they recognize it

-if possessor leaves the property when they were made aware of a different owner

(2) Example

The act of a government offi cial, duly authorized to so act, in recognizing ownership of land in a private
person, interrupts possession by the municipality concerned. (Seminary of San Carlos v. Mun. of Cebu,
19 Phil. 32).

Suspension vs interruption

Prescription is based on possession, not on belief

Subjects of Possession

> Article 1113. All things which are within the commerce of men are susceptible of prescription, unless
otherwise provided. Property of the State or any of its subdivisions not patrimonial in character shall not
be the object of prescription. (1936a)

-capable of being owned

2 types of property from viewpoint of mobility

1. Moveable - appliances
2. Immoveable – real property

Intangible property – chairs/position in a company

Illegal drugs are not a property of men – this is a product of crime

Article 1128. The conditions of good faith required for possession in articles 526, 527, 528, and 529 of
this Code are likewise necessary for the determination of good faith in the prescription of ownership
and other real rights. (1951)

Article 1129. For the purposes of prescription, there is just title when the adverse claimant came into
possession of the property through one of the modes recognized by law for the acquisition of
ownership or other real rights, but the grantor was not the owner or could not transmit any right. (n)
Modes of Acquisition

1. Buying the property

2. Inheritance
3. Donation

Article 1130. The title for prescription must be true and valid. (1953)

Ex. Property was sold with right of repurchase. Intention was only to loan it. Buyer was not supposed to
own it.

Absolutely simulated contract – Deed of sale was made with no intention to sell.

Just Title - Just title is an act which has for its purpose the transmission of ownership, and which would
have transferred ownership if the granted had been the owner.

The vice or defect is the one cured by prescription. Like sale, exchange, donation or succession.

True Title - To be true, the title must exist, not merely in the mind of the possessor. A legally non
existent title is without value. Thus, a will cannot be a sufficient title if it has been revoked. So is a title
that is absolutely simulated.

• False title – does not exist but is believed to exists, it may be based on error. If it refers to a third
person, it is sufficient for prescription if from the possessor it is not sufficient.

• Revocable title- transferor has made a reservation by which the rights of the possessor may disappear
(sale with right to repurchase).

Valid Title - The title for prescription must valid. A void title is insufficient, but a voidable title, so long as
it has not been annulled, can be the basis of ordinary prescription.

• If with suspensory condition – upon fulfilment

• If with resolutory condition – at once

Article 1131. For the purposes of prescription, just title must be proved; it is never presumed. (1954a)

ARTICLE 1138 - In the computation of time necessary for prescription the

following rules shall be observed:

(1) The present possessor may complete the period necessary for prescription by tacking his possession
to that of his grantor or predecessor in interest.

Ex. Continuous ownership on the death of a father and the son takes ownership
(2) It is presumed that the present possessor who was also the possessor at a previous time, has
continued to be in possession during the intervening time, unless there is proof to the contrary;

(3) The first day shall be excluded and the last day included.

ARTICLE 1139 - Actions prescribe by the mere lapse of time fixed by law.

Leap Year - For computing the prescriptive period in a leap year, February 28 and 29 are counted as
separate days.

Effect of Lapse of Time - The lapse of the period of prescription provided by law has the effect of
extinguishing the action. No extinctive prescription unless period expires. Prescription must be pleaded

ARTICLE 1140 - Actions to recover movables shall prescribe eight years from the time the possession
thereof is lost, unless the possessor has acquired the ownership by prescription for a less period,
according to Article 1132, and without prejudice to the provisions of Article 559, 1505, 1133.

Extraordinary Prescription of Movables

A person can recover lost personal or movables property within a period of eight years. However, if all
the requisites of an ordinary acquisitive prescription of movable property are present, the possessor of
the same becomes the owner of the movable property after only four years uninterrupted possession in
good faith.

ARTICLE 1141 - Real actions over immovables prescribe after thirty years.

This provision is without prejudice to what is established for the acquisition of ownership and other real
rights by prescription.

Extraordinary Prescription of Immovables

The action to recover immovables is within thirty years. However, if within the thirty-year period, all the
requisites for ordinary acquisitive prescription are already present in favor of the possessor, then the
possessor shall be considered the owner of the property after 10 years of uninterrupted, adverse, public
possession of the property in the concept of the owner in just title and good faith.

ARTICLE 1142 - A mortgage action prescribes after ten years.

Mortgage
-A mortgage is an accessory contract. It is constituted to secure a debt so that if the debtor fails to pay
the principal obligation, the creditor can foreclose on the mortgage by selling the same in a public sale
or bidding and the proceeds thereof are used to pay off the principal debt and interest if any.

• If there is still deficiency, the creditor can still go against the principal debtor to collect such deficiency

Prescription of Mortgaged Actions

The period begins from the day on which it could have been brought.

ARTICLE 1143 - The following rights, among others specified elsewhere in this Code, are not
extinguished by prescription.

Rights not Extinguished by Prescription

(1) To demand right of way under Article 649

a. Compulsory legal easement

b. Public Policy - imprescriptibility

(2) To bring an action to abate a public or private nuisance

(3) Others

a. Right to demand partition of a co-ownership

b. Action to declaration marriage void

c. Action to declare judgment/contract void

d. Right to demand support

e. Mandamus

ARTICLE 1144

The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract; ex. Right to receive payment

(2) Upon an obligation created by law: ex. Right to pay

(3) Upon a judgment

Actions which must be Brought within Ten Years

1. Upon a written contract

• Cause of action when there is breach

 • Under 1391 it shall be four years

• Ticket is a written contract

• Payment of deficiency after foreclosure

2. Upon an obligation created by law

• Recovery from constructive or implied trust

• Winner to refund loser in gambling

• Obligation of lessor to indemnity the lessee in good faith for improvements

3. Upon a judgment

• When only it is final and executory.

• Judgment may be executed on motion within five years from the date it becomes final and

executory. After such lapse of time, and before barred by statute of limitation, it may be
enforced by ordinary action within 10 years.

Computation

The computation starts form the date the cause of action accrues or from the date of the right of the
plaintiff is violated.

ARTICLE 1145 - The following actions must be commenced within six years:

(1) Upon an oral contract;

(2) Upon a quasi-contract.

Actions which must be brought within Six Years

1. Oral contracts

2. Quasi-contracts

It is a juridical relation characterized by certain lawful, voluntary and unilateral acts to the end that no
one should be unjustly enriched at the expense of the other.

ARTICLE 1146 - The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff;

(2) Upon a quasi-delict (like crime); ex. You got hit by a motorcycle. The one who caused it has an
obligation to pay you for damages

Actions which must be brought within Four Years

1. Upon an injury to the rights of the plaintiff

a. Suit questioning the removal a secretary for unjustified separation from employment.

b. Action for recovery of damages for taking personal property or trespass.

2. Quasi-delict

Article 2176. Whoever by act or omission caused 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.

ARTICLE 1147 - The following actions must be filed within one-year:

(1) Forcible entry and detainer – if you were forcibly taken out of the property
a. Computed upon unlawful deprivation
(2) Defamation - Computed when the offended party knows of the libelous matter

Art. 1161. Civil obligations arising from criminal offenses shall be governed by the penal laws, subject
to the provisions of Article 2177, and of the pertinent provisions of Chapter 2, Preliminary Title, on
Human Relations, and of Title XVIII of this Book, regulating damages. (1092a)

Art. 1162. Obligations derived from quasi-delicts shall be governed by the provisions of Chapter 2,
Title XVII of this Book, and by special laws. (1093a)

CHAPTER 2

NATURE AND EFFECT OF OBLIGATIONS

Art. 1163. Every person obliged to give something is also obliged to take care of it with the proper
diligence of a good father of a family, unless the law or the stipulation of the parties requires another
standard of care. (1094a)
Art. 1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver it
arises. However, he shall acquire no real right over it until the same has been delivered to him. (1095)

Kinds of Fruits:

Natural – product of nature, animal,

Industrial - cultivated from labor (rice)

Civil – result of juridical relation ex: Rent, price of land

Who will become the owner?

-We need to know between personal and real right.

You can only claim real rights if it has been delivered to you

-the moment the obligation has been given to deliver then it is yours

Personal Right

-persons right to demand the fulfilment of the prestation (obligee to do and not to d0)

-can file a case to compel the obligee

Right enforceable against persons ex. Creditor can demand payment

Real Right

-right of person over specific thing

-only acquired if the thing has been delivered to you

-used in rec, enforceable against the whole world ex: property

A written demand has to be made first.

Art. 1165. When what is to be delivered is a determinate thing, the creditor, in addition to the right
granted him by Article 1170, may compel the debtor to make the delivery.

If the thing is indeterminate or generic, he may ask that the obligation be complied with at the
expense of the debtor.
If the obligor delays, or has promised to deliver the same thing to two or more persons who do not
have the same interest, he shall be responsible for any fortuitous event until he has effected the
delivery. (1096)

Art. 1166. The obligation to give a determinate thing includes that of delivering all its accessions and
accessories, even though they may not have been mentioned. (1097a)

Accession

– thing produce by the object of obligation, naturally or artificially

Ex: A plant grew in land that you own, then you are the owner

If the plant grows over the neighbor’s wall, who owns it?

- If fruit is still on the ground, you are the owner, if it fell your neighbor owns it

Kinds of Accession003A

Natural

Industrial

Moveable property

Lost of thing in fortuitous event

-still liable if the other party was in delay or due to irresponsibility

Art. 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost.

This same rule shall be observed if he does it in contravention of the tenor of the obligation.
Furthermore, it may be decreed that what has been poorly done be undone. (1098)

Can a contract force a specific demand?

-No, there is no forced servitude. It is not constitutional.

Remedy = damages

Art. 1168. When the obligation consists in not doing, and the obligor does what has been forbidden
him, it shall also be undone at his expense. (1099a)

Art. 1169. Those obliged to deliver or to do something incur in delay from the time the obligee
judicially or extrajudicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exist:

(1) When the obligation or the law expressly so declare; or

(2) When from the nature and the circumstances of the obligation it appears that the designation of
the time when the thing is to be delivered or the service is to be rendered was a controlling motive for
the establishment of the contract; or

(3) When demand would be useless, as when the obligor has rendered it beyond his power to
perform.

In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to
comply in a proper manner with what is incumbent upon him. From the moment one of the parties
fulfills his obligation, delay by the other begins. (1100a)

Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay,
and those who in any manner contravene the tenor thereof, are liable for damages. (1101)

Moral Damages

- Physical suffering, mental anxiety, wounded feelings, social humiliation

Exemplary Damages

-by way of example or for public good

-to set as an example to the public if they do such an act

Nominal Damages

-right of plaintiff was violated

- legal right is technically violated and must be vindicated against an invasion that has produced no
actual present loss of any kind or where there has been a breach of contract and no substantial injury or
actual damages whatsoever have been or can be shown

Temparate/Moderate Damages

- more than nominal but less than compensatory damages, may be recovered when the court finds that
some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be provided
with certainty
Actual Damages

-adequate if pecuniary loss was suffered

-must be proven ex: presenting receipts

-as much asa you can prove

Liquidated Damages

-agreed upon both parties in case of breach thereof

-ex: Penalty fees

Impossibility - not in the ability of the obligor on what he cannot do, but in the nature of the thing

Natural Impossibilty

Art. 1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action
for future fraud is void. (1102a)

Art. 1172. Responsibility arising from negligence in the performance of every kind of obligation is also
demandable, but such liability may be regulated by the courts, according to the circumstances. (1103)

Art. 1173. 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 the persons, of
the time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201,
paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in the performance, that
which is expected of a good father of a family shall be required. (1104a)

Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by
stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen, or which, though foreseen, were inevitable.
(1105a)
Art. 1175. Usurious transactions shall be governed by special laws. (n)

Art. 1176. The receipt of the principal by the creditor without reservation with respect to the interest,
shall give rise to the presumption that said interest has been paid.

The receipt of a later installment of a debt without reservation as to prior installments, shall likewise
raise the presumption that such installments have been paid. (1110a)

Art. 1177. The creditors, after having pursued the property in possession of the debtor to satisfy their
claims, may exercise all the rights and bring all the actions of the latter for the same purpose, save
those which are inherent in his person; they may also impugn the acts which the debtor may have
done to defraud them. (1111)

Art. 1178. Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if there
has been no stipulation to the contrary. (1112)

CHAPTER 3

DIFFERENT KINDS OF OBLIGATIONS

SECTION 1. - Pure and Conditional Obligations

Art. 1179. Every obligation whose performance does not depend upon a future or uncertain event, or
upon a past event unknown to the parties, is demandable at once.

Every obligation which contains a resolutory condition shall also be demandable, without prejudice to
the effects of the happening of the event. (1113)

Art. 1180. When the debtor binds himself to pay when his means permit him to do so, the obligation
shall be deemed to be one with a period, subject to the provisions of Article 1197. (n)

Art. 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of
those already acquired, shall depend upon the happening of the event which constitutes the
condition. (1114)
Art. 1182. When the fulfillment of the condition depends upon the sole will of the debtor, the
conditional obligation shall be void. If it depends upon chance or upon the will of a third person, the
obligation shall take effect in conformity with the provisions of this Code. (1115)

Art. 1183. Impossible conditions, those contrary to good customs or public policy and those prohibited
by law shall annul the obligation which depends upon them. If the obligation is divisible, that part
thereof which is not affected by the impossible or unlawful condition shall be valid.

The condition not to do an impossible thing shall be considered as not having been agreed upon.
(1116a)

Art. 1184. The condition that some event happen at a determinate time shall extinguish the obligation
as soon as the time expires or if it has become indubitable that the event will not take place. (1117)

Art. 1185. The condition that some event will not happen at a determinate time shall render the
obligation effective from the moment the time indicated has elapsed, or if it has become evident that
the event cannot occur.

If no time has been fixed, the condition shall be deemed fulfilled at such time as may have probably
been contemplated, bearing in mind the nature of the obligation. (1118)

Art. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
(1119)

Art. 1187. The effects of a conditional obligation to give, once the condition has been fulfilled, shall
retroact to the day of the constitution of the obligation. Nevertheless, when the obligation imposes
reciprocal prestations upon the parties, the fruits and interests during the pendency of the condition
shall be deemed to have been mutually compensated. If the obligation is unilateral, the debtor shall
appropriate the fruits and interests received, unless from the nature and circumstances of the
obligation it should be inferred that the intention of the person constituting the same was different.

In obligations to do and not to do, the courts shall determine, in each case, the retroactive effect of
the condition that has been complied with. (1120)
Art. 1188. The creditor may, before the fulfillment of the condition, bring the appropriate actions for
the preservation of his right.

The debtor may recover what during the same time he has paid by mistake in case of a suspensive
condition. (1121a)

Art. 1189. When the conditions have been imposed with the intention of suspending the efficacy of an
obligation to give, the following rules shall be observed in case of the improvement, loss or
deterioration of the thing during the pendency of the condition:

(1) If the thing is lost without the fault of the debtor, the obligation shall be extinguished;

(2) If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it is
understood that the thing is lost when it perishes, or goes out of commerce, or disappears in such a
way that its existence is unknown or it cannot be recovered;

(3) When the thing deteriorates without the fault of the debtor, the impairment is to be borne by the
creditor;

(4) If it deteriorates through the fault of the debtor, the creditor may choose between the rescission
of the obligation and its fulfillment, with indemnity for damages in either case;

(5) If the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the
creditor;

(6) If it is improved at the expense of the debtor, he shall have no other right than that granted to the
usufructuary. (1122)

Art. 1190. When the conditions have for their purpose the extinguishment of an obligation to give, the
parties, upon the fulfillment of said conditions, shall return to each other what they have received.

In case of the loss, deterioration or improvement of the thing, the provisions which, with respect to
the debtor, are laid down in the preceding article shall be applied to the party who is bound to return.

As for the obligations to do and not to do, the provisions of the second paragraph of Article 1187 shall
be observed as regards the effect of the extinguishment of the obligation. (1123)

Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the
payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment,
if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a
period.

This is understood to be without prejudice to the rights of third persons who have acquired the thing,
in accordance with Articles 1385 and 1388 and the Mortgage Law. (1124)

Limitations:

If the thing has been delivered to the other property

Breach has to be so substantial

Remedy has to be of specific performance first

Art. 1192. In case both parties have committed a breach of the obligation, the liability of the first
infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties
first violated the contract, the same shall be deemed extinguished, and each shall bear his own
damages. (n)

https://lawyerly.ph/digest/c9fe6?user=8653

https://lawphil.net/judjuris/juri2007/feb2007/gr_151407_2007.html

INTERCONTINENTAL BROADCASTING CORPORATION v. IRENEO PANGANIBAN, GR No. 151407, 2007-02-

06
Ireneo Panganiban (respondent) was employed as Assistant General Manager of the Intercontinental
Broadcasting Corporation (petitioner) from May 1986 until his preventive suspension on August 26,
1988. Respondent resigned from his employment on September 2, 1988. On April 12, 1989, respondent
filed with the Regional Trial Court of Quezon City, Branch 93, Civil Case No. Q-89-2244 against the
members of the Board of Administrators (BOA) of petitioner alleging, among others, non-payment of his
unpaid commissions.4

A motion to dismiss was filed by Joselito Santiago, one of the defendants, on the ground of lack of
jurisdiction, as respondent's claim was a labor money claim, but this was denied by the RTC

CA dismissed it citing lack of jurisdiction and set aside RTC ruling

Panganiban was elected by the BOA as Vice-President for Marketing in July 1992. He resigned in April
1993.

On July 24, 1996, respondent filed against petitioner a complaint for illegal dismissal, separation pay,
retirement benefits, unpaid commissions, and damages. Labor Arbiter (LA) ordered Panganiban's
reinstatement with full backwages, and the payment of his unpaid commission, damages and lawyer's
fees

IBC filed petition to NLRC but due to failure to post bond, the petition was dismissed.

ISSUE:

whether or not respondent's claim for unpaid commissions in the amount of P2,521,769.77 has already
prescribed.

RULING:

The CA ruled that respondent's money claim had not yet prescribed, as it was interrupted in two
instances: first, by the filing of Civil Case No. Q-89-2244 by respondent with the RTC; and second, by the
express acknowledgment of the debt by petitioners.

The court sees no reason for the commission to be withheld

The applicable law in this case is Article 291 of the Labor Code which provides that "all money claims
arising from employer-employee relations accruing during the effectivity of this Code shall be filed
within three (3) years from the time the cause of action accrued; otherwise they shall be forever
barred." The term "money claims" covers all money claims arising from an employer-employee relation.

On this point, the Court ruled that although the commencement of a civil action stops the running of the
statute of prescription or limitations, its dismissal or voluntary abandonment by plaintiff leaves the
parties in exactly the same position as though no action had been commenced at all.

Facts:

Ireneo Panganiban (respondent) was employed as Assistant General Manager of the Intercontinental
Broadcasting Corporation (petitioner) from May 1986 until his preventive suspension on August 26,
1988. Respondent resigned from his employment on September 2, 1988. On April 12,... 1989,
respondent filed with the Regional Trial Court of Quezon City, Branch 93, Civil Case No. Q-89-2244
against the members of the Board of Administrators (BOA) of petitioner alleging, among others, non-
payment of his unpaid commissions.[4]

A motion to dismiss was filed by Joselito Santiago, one of the defendants, on the ground of lack of
jurisdiction, as respondent's claim was a labor money claim, but this was denied by the RTC per Orders
dated October 19, 1990 and November 23, 1990.

Issues:

whether or not respondent's claim for unpaid commissions in the amount of P2,521,769.77 has already
prescribed.

Ruling:

The applicable law in this case is Article 291 of the Labor Code which provides that "all money claims
arising from employer-employee relations accruing during the effectivity of this Code shall be filed
within three (3) years from the time the cause of action... accrued; otherwise they shall be forever
barred." The term "money claims" covers all money claims arising from an employer-employee
relation.[14]

Corollarily, Article 217 of the Labor Code provides for the jurisdiction of labor courts, which includes
money claims arising from employer-employee relations, to wit:

ART. 217. Jurisdiction of Labor Arbiters and the Commission.-- (a) Except as otherwise provided under
this Code the Labor Arbiter shall have original and exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of... the case by the parties for decision without extension, even
in the absence of stenographic notes, the following cases involving all workers, whether agricultural or
non-agricultural:... x x x x
If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates
of pay, hours of work and other terms and conditions of employment;

Claims for actual, moral, exemplary and other forms of damages arising from employer-employee
relations;... x x x x

Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other
claims, arising from employer-employee relations, including those of persons in domestic or household
service, involving an amount exceeding five thousand pesos (P5,000.00)... regardless of whether
accompanied with a claim for reinstatement.

xxxx

Like other causes of action, the prescriptive period for money claims is subject to interruption, and in
the absence of an equivalent Labor Code provision for determining whether the said period may be
interrupted, Article 1155 of the Civil Code may be... applied,[15] to wit:

ART. 1155. The prescription of actions is interrupted when they are filed before the Court, when there is
a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the
debt by the debtor.

Thus, the prescription of an action is interrupted by (a) the filing of an action, (b) a written extrajudicial
demand by the creditor, and (c) a written acknowledgment of the debt by the debtor. On this point, the
Court ruled that although the commencement of a civil... action stops the running of the statute of
prescription or limitations, its dismissal or voluntary abandonment by plaintiff leaves the parties in
exactly the same position as though no action had been commenced at all.[16]

Hence, while the filing of Civil Case No. Q-89-2244 could have interrupted the running of the three-year
prescriptive period, its consequent dismissal by the CA in CA-G.R. SP No. 23821 due to lack of jurisdiction
effectively canceled the tolling of the prescriptive period within... which to file his money claim, leaving
respondent in exactly the same position as though no civil case had been filed at all.[17] The running of
the three-year prescriptive period not having been interrupted by the filing of Civil Case No. Q-89-
2244,... respondent's cause of action had already prescribed on September 2, 1991, three years after his
cessation of employment on September 2, 1988. Consequently, when respondent filed his complaint for
illegal dismissal, separation pay, retirement benefits, and damages in July 24,... 1996, his claim, clearly,
had already been barred by prescription

Permanent Savings and Loan Bank v. Velarde [G.R. No. 140608, September 23, 2004]

https://lawphil.net/judjuris/juri2004/sep2004/gr_140608_2004.html

https://lexphil.blogspot.com/2016/05/permanent-savings-and-loan-bank-v_28.html

FACTS:

In a complaint for sum of money filed before the RTC, petitioner Permanent Savings and Loan Bank
sought to recover from respondent Mariano Velarde, the sum of P1,000,000.00 plus accrued interests
and penalties, based on a loan obtained by respondent from petitioner bank as evidence by promissory
notes. Petitioner bank sent a letter of demand to respondent on July 27, 1988, demanding full payment
of the loan. Despite receipt of said demand letter, respondent failed to settle his account.

Velarde contends that he caused the preparation of the complaint and that all the allegations thereat
are true and correct; that the promissory note sued upon, assuming that it exists and bears the genuine
signature of herein defendant, the same does not bind him and that it did not truly express the real
intention of the parties as stated in the defenses

The Bank claims, that there is no need to prove the loan and its supporting papers as Velarde has
already admitted these. Velarde had in fact denied these in his responsive pleading.

ISSUE: Whether or not the defendant has really executed the Promissory Note considering the doubt as
to the genuineness of the signature and as well as the non-receipt of the said amount

RULING: No. The mere presentation of supposed documents regarding the loan, but absent the
testimony of a competent witness to the transaction and the documentary evidence, coupled with the
denial of liability by the defendant does not suffice to meet the requisite preponderance of evidence in
civil cases.

The documents, standing alone, unsupported by independent evidence of their existence, have no legal
basis to stand on. They are not competent evidence. Such failure leaves this Court without ample basis
to sustain the plaintiff’s cause of action and other reliefs prayed for. The loan document being
challenged. Plaintiff did not exert additional effort to strengthen its case by the required preponderance
of evidence. On this score, the suit must be dismissed.

The bank should have presented at least a single witness qualified to testify on the existence and
execution of the documents it relied upon to prove the disputed loan obligations of Velarde. This falls
short of the requirement that (B)efore any private writing may be received in evidence, its due
execution and authenticity must be proved either: (a) By anyone who saw the writing executed; (b) By
evidence of the genuineness of the handwriting of the maker; or (c) By a subscribing witness. (Rule 132,
Sec. 21, Rules of Court)

Domestic Petroleum Retailer Corp. v. Manila International Airport Authority [G.R. No. 210641, March
27, 2019]

https://lawphil.net/judjuris/juri2019/mar2019/gr_210641_2019.html

https://pdfcoffee.com/domestic-petroleum-retailer-corporation-v-manila-international-airport-
authority-pdf-free.html

https://lawyerly.ph/digest/cfe40?user=6565

Facts:
[petitioner DPRC] and [respondent MIAA] entered into a Contract of Lease whereby the former leased
from the latter... parcel of land and... building

[Petitioner DPRC] was obliged to pay monthly rentals

[respondent MIAA] passed Resolution No. 98-30... increasing the rentals paid by its concessionaires and
lessees

[Petitioner] DPRC initially refused to pay the increased rentals which was decreed without prior notice
and hearing

[respondent MIAA] demanded its payment of... rental in arrears which was based on the increase
prescribed in Resolution No. 98-30 with 2% interest compounded monthly

[petitioner DPRC] protested in writing to [respondent MIAA] the increased rentals and the
computation[.] [H]owever, it also signified its intention to comply in good faith with the terms and
conditions of the lease contract by paying

In the said case, the Court nullified Resolution Nos. 98-30 and 99-11 issued by respondent MIAA for non-
observance of the notice and hearing requirements for the fixing rates required

[petitioner DPRC] advised [respondent] MIAA of its intention to stop paying the increased rental rate,
and on January 1, 2006, it stopped paying the increased rental rate[,] but continued paying the original
rental rate prescribed in the lease contract

[respondent] MIAA required the payment of P645,216.21 allegedly representing the balance of the
rentals from January up to June 2006

[petitioner DPRC] sent its reply to [respondent] MIAA denying the unpaid obligation, reiterating that the
rental could no longer be computed based on the nullified Resolution No. 98-30

[Respondent] MIAA ignored its demand[,] prompting [petitioner DPRC] to send a final written demand

[RTC] rendered [its Decision, ruling in favor of petitioner DPRC.

CA affirmed the RTC's Decision holding respondent MIAA liable to petitioner DPR

CA found that the liability of respondent MIAA to petitioner DPRC for overpaid monthly rentals was in
the nature of a quasi-contract of solutio indebiti.

CA held that "the claim of refund must be commenced within six (6) years from date of payment
pursuant to Article 1145(2)... of the Civil Code... he CA found that, despite the records showing that
petitioner DPRC made overpayment in monthly rentals from December 11, 1998 up to December 5,
2005, such claim could not be fully awarded to petitioner DPRC due to prescription.

the claim for refund must be made within six (6) years from date of payment. Since [petitioner] DPRC
demanded the refund of the increase in monthly rentals mistakenly paid only on July 27, 2006 and filed
this case before the [RTC] only on December 23, 2008, it can recover only those paid during the period
from January 9,2003 to December 5, 2005

Hence, the instant Petition.

Issues:

whether the CA was correct in amending the RTC's Decision, modifying the amount of respondent
MIAA's liability from the full amount of P9,593,179.87 to just P3,839,643.05 plus legal interest at 12%
per annum computed from the time of extra-judicial demand on July 27, 2006, on the basis of the
application of the six-year prescriptive period governing the quasi-contract of solutio indebiti.

Ruling:

The court finds that petitioner DPRC is entitled to the full amount of ₱9,593,179.87 plus legal interest at
12% per annum computed from the time of extrajudicial demand on July 27, 2006.

After petitioner DPRC made its written extrajudicial demand on July 27, 2006, it actually had until July
27, 2016 to file an action for the full recovery of the overpayment of monthly rentals.

According to Article 1155 of the Civil Code, the prescription of actions is interrupted when a written
extrajudicial demand is made. And so, when written extrajudicial demand for refund of overpayments
was made by petitioner DPRC on July 27, 2006, not only was the prescriptive period to file an action
suspended; jurisprudence holds that "[t]he interruption of the prescriptive period by written
extrajudicial demand means that the said period would commence anew from the receipt of the
demand[,] x x x written extrajudicial demand wipes out the period that has already elapsed and starts
anew the prescriptive period."

Instead of the prescriptive period of six years for quasi-contracts, it is Article 114435 of the Civil Code
that finds application in the instant case. This Article provides that an action based on a written contract
must be brought within 10 years from the time the right of action accrues.

Therefore, with the absence of the two essential requisites of solutio indebiti in the instant case,
petitioner DPRC's cause of action is not based on the quasi-contract of solutio indebiti.

Solutio indebiti applies when payment was made on the erroneous belief of facts or law that such
payment is due.

In the case at hand, petitioner DPRC's overpayment of rentals from 1998 to 2005 was not made by sheer
inadvertence of the facts or the misconstruction and misapplication of the law. Petitioner DPRC did not
make payment because it mistakenly and inadvertently believed that the increase in rentals instituted
by the subsequently voided Resolution No. 98-30 was indeed due and demandable. From the very
beginning, petitioner DPRC was consistent in its belief that the increased rentals were not due as
Resolution No. 98-30 was, in its view, void.
-----------------------------------

In the instant case, the Court finds that the essential requisites of solutio indebiti are not present.

it is undisputed by all parties that respondent MIAA and petitioner DPRC are mutually bound to each
other under a Contract of Lease

Hence, with respondent MIAA and petitioner DPRC having the juridical relationship of a lessor-lessee, it
cannot be said that in the instant case, the overpayment of monthly rentals was made when there
existed no binding juridical tie or relation between the pay or, i.e., petitioner DPRC, and the person who
received the payment, i.e., respondent MIAA.

the Court finds that the cause of action of petitioner DPRC is based on the violation of a contractual
stipulation in the parties' Contract of Lease, and not due to the existence of a quasi-contract.

Hence, by filing its Complaint, petitioner DPRC invoked the Contract of Lease and alleged that
respondent MIAA violated the aforementioned contractual stipulation, considering that the latter
imposed a price escalation of monthly rentals despite reneging on its contractual obligation to first issue
a valid Administrative Order and give petitioner DPRC prior notice.

Just because the Contract of Lease in itself may be silent as to petitioner DPRC's entitlement to a
refund does not mean that such claim for refund is not provided for in the contract and cannot be
asserted by petitioner DPRC.

It must be stressed that applicable laws form part of, and are read into, contracts without need for any
express reference thereto.

Furthermore, it cannot be said that petitioner DPRC's payments in monthly rentals from December 11,
1998 up to December 5, 2005 in observance with the subsequently nullified Resolution No. 98-30 were
made due to mistake on the part of petitioner DPRC.

petitioner DPRC deliberately made the payments in accordance with respondent MIAA's Resolution No.
98-30, albeit under protest.

petitioner DPRC also signified its intention to comply in good faith with the terms and conditions of the
lease contract by paying the amount charged in accordance with Resolution No. 98-30 despite
registering its objection to its validity.

Solutio indebiti applies when payment was made on the erroneous belief of facts or law that such
payment is due.[34] In the case at hand, petitioner DPRC's overpayment of rentals from 1998 to 2005
was not made by sheer inadvertence of the facts or the misconstruction and misapplication of the law.
Petitioner DPRC did not make payment because it mistakenly and inadvertently believed that the
increase in rentals instituted by the subsequently voided Resolution No. 98-30 was indeed due and
demandable. From the very beginning, petitioner DPRC was consistent in its belief that the increased
rentals were not due as Resolution No. 98-30 was, in its view, void.

Therefore, with the absence of the two essential requisites of solutio indebiti in the instant case,
petitioner DPRC's cause of action is not based on the quasi-contract of solutio indebiti.
WHEREFORE, premises considered, the instant Petition is hereby GRANTED. The Decision dated May 31,
2013 and Resolution dated November 29, 2013 promulgated by the Court of Appeals, Special Second
Division and Former Special Second Division, respectively in CA-G.R. CV No. 98378 are PARTIALLY
REVERSED and SET ASIDE insofar as the Court of Appeals reduced the total amount of liability of
respondent Manila International Airport Authority to P3,839,643.05, plus legal interest at 12% per
annum computed from the time of the extrajudicial demand on July 27, 2006. Accordingly, the Decision
dated August 15, 2011 of the Regional Trial Court, Pasay City, Branch 119 in Civil Case No. R-PSY-08-
08963, as clarified in its Order dated November 17, 2011, is REINSTATED. SO ORDERED.

Principles:

In order to establish the application of solutio indebiti in a given situation, two conditions must concur:
(1) a payment is made when there exists no binding relation between the payor who has no duty to pay,
and the person who received the payment, and (2) the payment is made through mistake, and not
through liberality or some other cause.

Ledesma v. Court of Appeals [G.R. No. 106646 (Resolution), June 30, 1993]

http://delgadokathlylazaga.blogspot.com/

https://lawphil.net/judjuris/juri1993/jun1993/gr_106646_1993.html

FACTS:

On August 21, 1980, private respondent Rizal Commercial Banking Corporation filed Case No. 38287 in
the then Court of First Instance of Rizal against petitioner to enforce the terms of Trust Receipt
Agreement No. 7389 executed by them on April 1, 1974 but which petitioner had failed to comply with.
As summons could not be served on the latter, said case was dismissed without prejudice on March 3,
1981.

On December 2, 1988, private respondent bank instituted Civil Case No. 88-2572 in the Regional Trial
Court of Makati, Metro Manila, Branch 133, against petitioner on the same cause of action and subject
matter.

Petitioner's motion to dismiss on the ground of prescription which was denied and judgment was
rendered in favor of private respondent. Said judgment was affirmed by respondent Court and
petitioner's motion for reconsideration thereof was denied.

Petitioner's petition for review on certiorari of the said judgment was denied its present motion for
reconsideration contending that the second action filed by private respondent bank had already
prescribed.

ISSUE:

Whether the second action filed by private respondent bank had already prescribed.
RULING:

No. The Court ruled that the filing of the first action interrupted the running of the period, and then
declared that at any rate, the second action was filed within the balance of the period remaining.

Article 1155 of the Civil. Code provides that the prescription of an action, involving in the present case
the 10-year prescriptive period for filing an action on a written contract under Article 1144(1) of the
Code, is interrupted by (a) the filing of an action, (b) a written extrajudicial demand by the creditor, and
(c) a written acknowledgment of the debt by the debtor.

The correct interpretations of Article 1155 of the Civil Code are reflected in and furnished by the
doctrinal pronouncements in the case of Overseas Bank of Manila and Philippine National Railways
Company.

Article 1155 has been interpreted in both case to mean that upon the cessation of the suspension of the
prescriptive period, the full period of prescription commences to run anew.

Petitioner is wrong in insisting that in case of the filing of an action, the prescriptive period is merely
tolled and continues to run again, with only the balance of the remaining period available for the filing
of another action. This postulation of petitioner, if we are to adopt it, would result in an absurdity
wherein Article 1155 would be interpreted in two different ways, i.e., the prescriptive period is
interrupted in case of an extrajudicial demand and a written acknowledgment of a debt, but it is merely
tolled where an action is filed in court. Hence, the present motion is hereby DENIED with FINALITY.

BOOK IV OBLIGATIONS AND CONTRACTS

TITLE I – OBLIGATIONS
 GENERAL PROVISIONS

Art. 1156. An obligation is a juridical necessity to give, to do or not to do. (n)

OBLIGATION

-juridical responsibility to give, to do and what not to do.

Ex of not to do:

Right of way - created by law, even if you are the owner, you are given responsibility by law to provide
access to individuals

Art. 1157. Obligations arise from:

(1) Law;

Ex: Child support – parents are obliged to provide for their children under the law, without any contract

(2) Contracts;

Ex: Contract of sale – once it is initiated, the seller is obliged to give the purchase and buyer is obliged to
pay

(3) Quasi-contracts;

EX: Solutio in brevity – no expressed agreement

-if B took over a business because A left, A is obliged to pay back B even if there was no agreement since
A was running the business in his absence.

(4) Acts or omissions punished by law; and

– Art 100 of the Revised penal code

Ex: For any criminal cases, they may incur civil liabilities, moral damages

(5) Quasi-delicts. (1089a)

-incurred damages in an omission even though there was no contract

Art 2176 of Civil code - 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. (1902a)

Ex: Pedestrian is hit by a bus – bus operator and bus driver have a responsibility
NOTE: Non-contract obligations – riding a taxi, ordering from a restaurant

Is Article 1157 an exclusive list?

-Yes, it is. There can be no other sources be included in the obligation.

Does a contract need to be in writing?

-No, as long as all elements are present.

Validity and Enforceability:

> Enforceability –you can ask the court to direct the parties to perform their obligations as per a
contract

>Validity – if subject is already consummated, if all parties have done their responsibilities, this must be
in writing

Statute of Frauds – must be in writing

EX:

>Oral Contract between to parties, but A did not deliver the parcel of land and payment was not taken.
Buyer cannot go to court to enforce his right.

>Promissory note – does not need to be notarized, it is a valid contract

Use of Notarization

– purpose for convenience

- evidence in court

Public document – Notarized, no need for authentication, presumption of regularity

Private document – Not notarized

Natural Obligations
-Voluntary obligated by the obligor

PARTIES

-must have the capacity to be an obligee

Active -

Passive -

Legal Capacity - has the capacity to perform acts that will result to obligation. Ex: being 18 years old

Juridical Capacity- has the capacity to be the subject of legal relations. Ex: Newborns can be a subject of
donations.

Incapacities/Insane individuals can only be exempted from contractual obligations.

Insane and minors are still civilly liable

1. Ansay, Et. Al. vs. The Board of Directors of National Development Company, Et. Al. [G.R. No. L-
13667, April 29, 1960]

https://lawphil.net/judjuris/juri1960/apr1960/gr_l-13667_1960.html

https://engrjhez.wordpress.com/2017/03/19/ansay-et-al-v-national-development-company-ndc-g-r-no-
l-13667-29-april-1960/

FACTS: Ansay et al. filed against NDC a complaint praying for a 20% Christmas bonus for the years 1954
and 1955. The trial court dismissed the complaint ratiocinating that a bonus is an act of liberality and the
court takes it that it is not within its judicial powers to command respondents to be liberal and that
Ansay et al. admitted that NDC is not under legal duty to give such bonus and that the court has no
power to compel a party to comply with a moral obligation (Art. 142, New Civil Code.). Ansay et al.
appealed and argued that there exists a cause of action in their complaint because their claim rests on
moral grounds or what in brief is defined by law as a natural obligation.

ISSUE: Is the grant of Christmas bonus for the years 1954 and 1955 demandable based on natural or
moral obligation?

HELD: NO.
Article 1423 of the New Civil Code classifies obligations into civil or natural. “Civil obligations are a right
of action to compel their performance. Natural obligations, not being based on positive law but on
equity and natural law, do not grant a right of action to enforce their performance, but after voluntary
fulfillment by the obligor, they authorize the retention of what has been delivered or rendered by
reason thereof”. It is thus readily seen that an element of natural obligation before it can be cognizable
by the court is voluntary fulfillment by the obligor. Certainly retention can be ordered but only after
there has been voluntary performance. But here there has been no voluntary performance. In fact, the
court cannot order the performance.

2. Manila Surety and Fidelity Co., Inc., vs. Lim [G.R. No. L-9343, December 29, 1959]

https://lawphil.net/judjuris/juri1959/dec1959/gr_l-9343_1959.html

https://lawyerly.ph/digest/c349f?user=661

Facts:

On February 26, 1946, in civil case No. 32 of the Justice of the Peace Court of Pasay, Valentin R. Lim
obtained a judgment against Irineo Facundo, "ordering the latter to vacate... the premises described
in the complaint and to pay the plaintiff a monthly rental of P100 from February 18, 1955 until the
defendant vacate the premises and to pay the costs." Irineo Facundo did not appeal from the...
decision but instead caused the filing of a special civil action for certiorari and prohibition (Case No.
7674) in the Court of First Instance of Rizal, entitled Irineo Facundo, petitioner, ... vs. Jose M. Santos,
ex-Justice of the Peace of Pasay, Ricardo C. Robles, as Justice of the Peace of Pasay, and Valentin R. Lim,
respondents, wherein a writ of preliminary injunction was issued upon the filing by Facundo of a
bond... in the sum of P1000, which bond was posted by the Manila Surety & Fidelity Co., Inc. On June
21, 1946, this case was dismissed by the Court of First Instance of Rizal and the dismissal' was
subsequently affirmed... on appeal by the Supreme Court on December 17, 1946.

On July 29, 1948, Valentin R. Lim filed with the Court of First Instance of Rizal, in said case No. 7694, a
motion for the determination of damages sustained by him for uncollected rentals due to the
issuance of the above-mentioned... writ of preliminary injunction in said case

Issues:

That the requisites... of s... the requisites... of solutio indebiti which is the only basis for the return of
the amount paid do not exist in the present case
Ruling:

we find appellant's contention to be untenable, for the payment made by the herein plaintiff-appellee
to ... defendant-appellant was not voluntary, it was thru a coercive process of the writ of execution
issued at the instance and insistence of the defendant-appellant.

It is contented by defendant-appellant that there is no justification for ordering the return of the
amount in question as the court below did, for in the present case, the requisites of solutio indebiti do
... not exist.

Appellant's contention is untenable. The present action is for a sum of money and all the parties
involved are residents of the City of Manila as averred in paragraph 1 of the complaint. Under Sec.
1... of Rule 5 of the Rules of Court, civil actions like the one in question may be commenced and tried
where the defendant or any of the defendants resides or may be found or where the plaintiff or any
of the plaintiffs ... resides, at the election of the plaintiff.

Principles:

Natural Obligation

The main contention of defendant-appellant is that plaintiff-appellee has paid voluntarily its natural
obligation and therefore is precluded from recovering that which was delivered to defendant-appellant,
and that the requisites... of solutio indebiti which is the only basis for the return of the amount paid
do not exist in the present case. Appellant invokes the following provisions of the Civil Code:

"ART. 1423. Natural obligations, not being based on positive law but on equity and natural law, do not
grant a right of action to enforce their performance, but after voluntary fulfillment by the obligor,
they authorize the... retention of what has been delivered or rendered by reason thereof".

Note:

There was no right to force a payment since it was ordered by the court. It is no longer a natural
obligation
CONTRACT

Definition: Art 1305 – a meeting of minds between two persons whereby one binds himself, with
respect to the other, to give something or to render some service.

Elements of a CONTRACT:

1. Meeting of the minds- there should be consent with all the parties
2. Subject/Object of the contract – may be give something, render something
3. Cost/Consideration – must be established

Which is broader?

-Obligation is broader

SOURCES OF OBLIGATIONS:

Article 1157. Obligations arise from:

(1) Law;

(2) Contracts;

(3) Quasi-contracts;

(4) Acts or omissions punished by law; and -

(5) Quasi-delicts. (1089a)

Obligations

-Consist of the delivery of a moveable or immoveable thing.

Positive personal obligation

-obligation to give

-involves personal or physical promise to give service

Negative personal obligation

-abstaining from some act

-obligation not to give

1. CICL XXX vs. People [G.R. No. 237334, August 14, 2019]

https://lawyerly.ph/juris/view/c10069

https://lawyerly.ph/digest/c10069?user=12851

https://pdfcoffee.com/cicl-v-people-case-digestdocx-pdf-free.html

https://lawyerly.ph/juris/view/c10069?user=geCtVV043cHQwby9pckFVOHdUdzE5ZkhnRGI4UnF4dmg1
WjVDbldMREJKaz0=

FACTS:

CICL XXX was accused of frustrated murder. The victim claims that when he was out to buy something
from the store, he heard somebody say "Yan si Glenn anak ni Purok Leader na humuli sa atin nuon."

He claimed that CICL XXX, with Puyo and Narag suddenly poked him with a gun and tried to shoot him
but it did not fire. They then proceed rustrated willfully, unlawfully and feloniously[,] with intent to kill,
attack, assault and employ personal violence then and there mauling him and hitting him in the head
with a piece of stone, thereby inflicting upon him serious and grave wounds, the offender thus
performing all the acts of execution that would produce the crime of homicide as a consequence but
which nevertheless did not produce it by reason or cause independent of the will of the perpetrator,
that is, by the timely and able medical attendance rendered.

CICL XXX denies doing so, claiming that he merely heard a commotion during the new year and saw
Redoquerio and De los Santos mauling Narag. Thereafter, De los Santos ran away while Narag boxed
Redoquerio who fell on his back. He did not know what happened next because YYY already called for
him and they went home.

The RTC convicted him of Frustrated Murder.

CICL XXX appealed citing that the prosecution failed to show that he acted with discernment.

ISSUE:

Whether the CA erred in convicting CICL XXX despite the prosecution's failure to show that he acted
with discernment

RULING:

Yes. Since he was only seventeen (17) years old at the time he supposedly committed the crime, then he
is presumed to have acted without discernment, and that it was the burden of the prosecution to prove
otherwise.

When a minor above fifteen (15) but below eighteen (18) years old is charged with a crime, it cannot be
presumed that he or she acted with discernment.
The discernment that constitutes an exception to the exemption from criminal liability of a minor x x x
who commits an act prohibited by law, is his mental capacity to understand the difference between
right and wrong, and such capacity may be known and should be determined by taking into
consideration all the facts and circumstances accorded by the records in each case, the very appearance,
the very attitude, the very comportment and behavior of said minor, not only before and during the
commission of the act, but also after and even during the trial.

Discernment cannot be presumed.

As the nature and extent of the injuries were not sufficiently established, it was error for the lower
courts to conclude that the injuries were fatal and that Redoquerio would have died if not for the timely
medical assistance he received. In the final analysis, it was therefore error for the courts to conclude
that the crime committed was Frustrated Homicide instead of Attempted Homicide.

2. Dauden-Hernaez v. Delos Angeles [G.R. No. L-27010, April 30, 1969]

https://lawphil.net/judjuris/juri1969/apr1969/gr_l-27010_1969.html

https://lawyerly.ph/digest/c4a2f?user=8135

https://pdfcoffee.com/dauden-hernaez-v-de-los-angeles-pdf-free.html

https://lawyerly.ph/juris/view/c4a2f?user=gRnJOWm1sRFMxVjFzYnpLV056aTkybm1YelMxZWswcGJiMH
o5d0llQm1BMD0=

Marlene Dauden-Hernaez, a movie actress, filed a case against Hollywood Far East Productions for non
payment of her services as leading actress in two motion pictures.

Her case was dismissed mainly because her claim was not supported by an written document, public or
private.

ISSUE:

Whether or not the court abused its discretion in ruling that a contract for personal services involving
more than P500.00 was either Invalid, or unenforceable under the last paragraph of Article 1358 of the
Civil Code of the Philippines?

RULING:

We hold that there was abuse, since the ruling herein contested betrays a basic and lamentable
misunderstanding of the role of the written form in contracts, as ordained in the present Civil Code.

The contract sued upon by petitioner herein (compensation for services) does not come under either
exception. It is true that it appears included in Article 1358, last clause, providing that "all other
contracts where the amount involved exceeds five hundred pesos must appear in writing, even a private
one". But Article 1358 nowhere provides that the absence of written form in this case will make the
agreement invalid or unenforceable. On the contrary, Article 1357 clearly indicates that contracts
covered by Article 1358 are binding and enforceable by action or suit despite the absence of writing.

"ART. 1357. If the law requires a document or other special form, as in the acts and contracts
enumerated in the following article,2 the contracting parties may compel each other to observe that
form, once the contract has been perfected. This right may be exercised simultaneously with the action
upon the contracts."

Facts:

en Hernaez, a motion picture actress, had filed a complaint against herein private respondents,
Hollywood Far East Productions, Inc., an

Petitioner Marlene Dauden Hernaez, a motion picture actress, had filed a complaint against herein
private respondents, Hollywood Far East Productions, Inc., and its President and General Manager,
Ramon Valenzuela, to recover P14,700.00 representing a... balance allegedly due said petitioner for her
services as leading actress in two motion pictures produced by the company, and to recover damages.

Upon motion of defendants, the respondent court (Judge Walfrido delos

Angeles presiding) ordered the complaint dismissed, mainly because the "claim of plaintiff was not
evidenced by any written document, either public or private", and the complaint "was defective on its
face" for violating Articles 1356 and 1358 of the Civil Code of the

Philippines, as well as for containing defective allegations

Petitioner Marlene Dauden Hernaez, a motion picture actress, had filed a complaint against herein
private respondents, Hollywood Far East Productions, Inc., and its President and General Manager,
Ramon Valenzuela, to recover P14,700.00 representing a... balance allegedly due said petitioner for her
services as leading actress in two motion pictures produced by the company, and to recover damages.
Upon motion of defendants, the respondent court (Judge Walfrido delos

Angeles presiding) ordered the complaint dismissed, mainly because the "claim of plaintiff was not
evidenced by any written document, either public or private", and the complaint "was defective on its
face" for violating Articles 1356 and 1358 of the Civil Code of the
Philippines, as well as for containing defective allegations.

Issues:

Articles 1356 and 1358 of the Civil Code

Ruling:

claim of plaintiff was not evidenced by any written document, either public or private

HEREFORE, the order dismissing the complaint is set aside, and the case is ordered remanded to the
court of origin for further proceedings not at variance with this decision.

3. Spouses Delos Reyes v. Court of Appeals [G.R. No. 129103, September 3, 1999]

https://www.lawphil.net/judjuris/juri1999/oct1999/gr_129103_1999.html

https://pdfcoffee.com/delos-reyes-v-court-of-appeals-gr-no-129103-september-3-1999-digest-pdf-
free.html

Daluyong Gabriel owned a parcel of land in Tagum, Davao Del Norte that was managed by his sister
Maria Rita Gabriel de Rey acted as administrator of the said land and took charge in collecting the
rentals for those portions which has been leased to tenants/lessees because he was residing in
Mandaluyong, Metro Manila.

Lydia Delos Reyes lease a portion of the land for a term of 1 year. In 1985 Gabriel sent his son Renato to
take over as administrator. The lease of Reyes was executed and replaced the term from 1 year to 6
year with Renato's acknowledgement. Lydia Delos Reyes verbally agreed to buy 250sqm including the
176sqm leased by her and thereafter an additional of 50sqm or a total of 300sqm of Daluyong Gabriel’s
property at 300pesos per sqm. Receipt of payment of the purchase price made in several installments by
Lydia Delos Reyes was acknowledged by Renato Gabriel.

When Daluyong found out that the Delos Santos where constructing a building, he sent a cease and
desist of the contstruction and vacate the premises.

A case was filed and a consolidated decision ordering Daluyong and his children to execute a deed of
conveyance.

A reversed and set aside the decision of RTC and rendered a new one “Ordering spouses Delos Reyes to
immediately vacate the subject land.”
ISSUE:

Whether or not the verbal agreement which petitioners entered into with private respondent Renato
Gabriel in 1987 involving the sale of the three hundred (300) square meter portion of land registered in
the name of Renato's late father Daluyong Gabriel is a valid and enforceable contract of sale of real
property.

RULING:

The oral contract of sale entered into by Renato Gabriel of portion of the 5,010 square meter parcel of
land registered in the name of Daluyong Gabriel in favor of petitioners, null and void.

Renato Gabriel does not have authority to enter into contract of sale of the subject land. 2. Article1433
and 1434 of the Civil Code is not applicable, Renato Gabriel never acquired ownership of the subject
land. Before Daluyong Gabriel died, he donated the entire lot to his daughter Maria Rita Bartolome. If
there was no donation made by Daluyong Gabriel, Renato Gabriel will become the owner and acquired
title by way of hereditary succession.

4. Serrano vs. Central Bank of the Philippines, Et. Al. [G.R. No. L-30511, February 14, 1980]

https://lawphil.net/judjuris/juri1980/feb1980/gr_30511_1980.html

http://alwaysexpectamazing.blogspot.com/2017/01/serrano-vs-central-bank-of-philippines.html

https://cdizonblog.wordpress.com/2017/01/28/manuel-m-serrano-petitioner-vs-central-bank-of-the-
philippines-overseas-bank-of-manila-emerito-m-ramos-susana-b-ramos-emerito-b-ramos-jr-josefa-
ramos-dela-rama-horacio-dela-rama-anton/

On October 13, 1966 and December 12, 1966, petitioner made a time deposit, for one year with 6%
interest, of P150,000.00 with the respondent Overseas Bank of Manila. Concepcion Maneja also made a
time deposit, for one year with 6-½% interest, on March 6, 1967, of Two Hundred Thousand Pesos
(P200,000.00) with the same respondent Overseas Bank of Manila. On August 31, 1968, Concepcion
Maneja, married to Felixberto M. Serrano, assigned and conveyed to petitioner Manuel M. Serrano, her
time deposit of P200,000.00 with respondent Overseas Bank of Manila.

A series of demands for encashment of the aforementioned time deposits from the respondent
Overseas Bank of Manila, dating from December 6, 1967 up to March 4, 1968, not a single one of the
time deposit certificates was honored by respondent Overseas Bank of Manila.
Central Bank denies that it has the duty to exercise a most rigid and stringent supervision of banks,
implying that respondent Central Bank has to watch every move or activity of all banks, including
respondent Overseas Bank of Manila.

The Petitioner filed a petition for mandamus and prohibition, with preliminary injunction, that seeks the
establishment of joint and solidary liability to the amount of Three Hundred Fifty Thousand Pesos, with
interest, against the respondents, on the alleged failure of the Overseas Bank of Manila to return the
time deposits made by petitioner. The petition was dismissed because of lack of merit.

Issue:

Whether or not the central bank is liable for the failure of encashment worth 350,ooo including interest.

Held:

No, because there was no breach of trust from a bank’s failure to return the subject matter of the
deposit. Bank deposits are in nature of irregular deposits. They are really loans because they earn
interest. All kinds of bank deposits are to be treated as loans. The petitioner here in the making time
deposits that earn interests with respondent Overseas Bank of Manila was in reality a creditor of the
respondent bank and not a depositor. The respondent bank was in turn a debtor of petitioner. Failure of
the bank to honor the time deposit is failure to pay obligation as a debtor and not a breach of trust
arising from depository’s failure to return the subject matter of the deposit.

Note: Interest must be specified in writing

Sources of Obligations

Art. 1158. Obligations derived from law are not presumed. Only those expressly determined in this
Code or in special laws are demandable, and shall be regulated by the precepts of the law which
establishes them; and as to what has not been foreseen, by the provisions of this Book. (1090)

If the law merely recognizes it, it's only purpose is to regulate therefore the act gave rise to the
obligation, not the law

Art. 1159. Obligations arising from contracts have the force of law between the contracting parties
and should be complied with in good faith. (1091a)
Art. 1160. Obligations derived from quasi-contracts shall be subject to the provisions of Chapter 1,
Title XVII, of this Book. (n)

Quasi-Contract must be: Lawful, Unilateral, Voluntary

Presumptive consent

-the law accepts it, only applies if you have benefited from the agreement
-one cannot benefit at the expense of another

Negotiorum Gestio – in oficius manager

Requisites:

➢ One assumes the position

➢ Property was abandon
➢ No authorization from owner
➢ It was done in good faith

Does not exist if:

➢ If property is not neglected or abandon

➢ If manager was tacitly authorized by the owner

Art. 2144. Whoever voluntarily takes charge of the agency or management of the business or property
of another, without any power from the latter, is obliged to continue the same until the termination of
the affair and its incidents, or to require the person concerned to substitute him, if the owner is in a
position to do so. This juridical relation does not arise in either of these instances:

(1) When the property or business is not neglected or abandoned;

(2) If in fact the manager has been tacitly authorized by the owner.

In the first case, the provisions of Articles 1317, 1403, No. 1, and 1404 regarding unauthorized contracts
shall govern.
In the second case, the rules on agency in Title X of this Book shall be applicable. (1888a)

Difference from Implied contract:

-source of obligation is the contract itself

Solutio Indebiti

-payment in mistake
-the one who received that payment has the responsibility to return it
Accion in rem verso
- 1) that the defendant has been enriched, (2) that the plaintiff has suffered a loss, (3) that the
enrichment of the defendant is without just or legal ground, and (4) that the plaintiff has no other action
based on contract, quasi-contract, crime or quasi-delict.

Ex: If one has a debt but you have already paid it, but the receipt was lost. You paid again but with
reservation, stating that you will take back the money if the receipt is found again.

Art. 1161. Civil obligations arising from criminal offenses shall be governed by the penal laws, subject
to the provisions of Article 2177, and of the pertinent provisions of Chapter 2, Preliminary Title, on
Human Relations, and of Title XVIII of this Book, regulating damages. (1092a)

Art. 1162. Obligations derived from quasi-delicts shall be governed by the provisions of Chapter 2,
Title XVII of this Book, and by special laws. (1093a)

1. Navales vs. Rias, Et. Al [G.R. No. L-3489, September 7, 1907]

https://lawphil.net/judjuris/juri1907/sep1907/gr_l-3489_1907.html

https://edwinnesortado.wordpress.com/2017/01/30/case-digest-3/

https://cdizonblog.wordpress.com/2017/01/27/g-r-no-l-3489-september-7-1907-vicente-navales-
plaintiff-appellee-vs-eulogia-rias-et-al-defendants-appellants/

Facts:

Plaintiff, Vicente Navales built a house in the land owned by Eulogia Rias, defendant. By virtue of the
decision of the justice in the action instituted by Rias against Navales, the deputy sheriff, Luciano Bacayo
who carried the judgment into execution was obliged to destroy the house and remove it from the land,
according to the usual procedure in the action for ejectment.

18th of November, 1904, Vicente Navales filed a complaint with the Court of First Instance of Cebu
against Eulogia Rias and Maximo Requiroso, claiming that the defendants should be sentenced to pay
him the sum of 1,200 php and other damages. The defendant denied all allegations therein contained,
and asked that judgment to dismiss the complaint with costs against the plaintiff. The court rendered
judgment declaring that the decision entered by the justice of peace and the execution of the order by
the sheriff were illegal, that the defendants were thereby liable for damages.
Issue:

Whether or not the defendants liable for the charges.

Held:

No, because by reason of its not having been appealed from, had become final, and from the contents
of the same may be inferred that there had been an action for ejectment between the parties, and that
there was no reason why it should not be enforced when it had already become final.

2. Metropolitan Bank vs. Rosales and Yo Yuk To [G.R. No. 183204, January 13, 2014]

https://lawphil.net/judjuris/juri2014/jan2014/gr_183204_2014.html

https://arete.site123.me/on-law-and-jurisprudence/metropolitan-bank-v-rosales

http://lawtechworld.com/blog/blog/2014/07/metropolitan-bank-and-trust-company-vs-rosales/

3. Hospicio De San Jose De barili Cebu City vs. DAR [G.R. No. 140847, September 23, 2005]

https://lawphil.net/judjuris/juri2005/sep2005/gr_140847_2005.html

https://www.philstar.com/cebu-news/2005/09/30/299363/hospicio-loses-case-dar

Hospicio De San Jose, De Barili Cebu City vs. DAR

Facts: • Petitioner Hospicio de San Jose de Barili ("Hospicio") is a charitable organization created as a
body corporate in 1925 by Act No. 3239. The law was enacted in order to formally accept the offer made
by Pedro Cui and Benigna Cui to establish a home for the care and support, free of charge, of indigent
invalids and incapacitated and helpless persons. • Section 4 of Act No. 3239 provides that "[t]he
personal and real property donated to the [Hospicio] by its founders or by other persons shall not be
sold under any consideration."

On 10 October 1987, the Department of Agrarian Reform Regional Office (DARRO) Region VII issued an
order ordaining that two parcels of land owned by the Hospicio be placed under Operation Land
Transfer in favor of twenty-two (22) tillers thereof as beneficiaries. Presidential Decree (P.D.) No. 27, a
land reform law, was cited as legal basis for the order. The Hospicio filed a motion for the
reconsideration of the order with the Department of Agrarian Reform (DAR) Secretary, citing the
aforementioned Section 4 of Act No. 3239. It argued that Act No. 3239 is a special law, which could not
have been repealed by P.D. No. 27, a general law, or by the latter’s general repealing clause.
The Order of the DAR Secretary was assailed in a Petition for Certiorari filed with the Court of Appeals.

Issue: Whether a provision in the law prohibiting the sale of the properties donated to the charitable
organization that was incorporated by the same law bars the implementation of agrarian reform laws as
regards said properties.

Held: Section 4 of Act No. 3239 prohibits the sale "under any consideration" of the lands donated to the
Hospicio. But the land transfers mandated under P.D. No. 27 cannot be considered a conventional sale
under our civil laws. Generally, sale arises out of a contractual obligation. Thus, it must meet the first
essential requisite of every contract that is the presence of consent. Consent implies an act of volition in
entering into the agreement. The absence or vitiation of consent renders the sale either void or
voidable. In this case, the deprivation of the Hospicio’s property did not arise as a consequence of the
Hospicio’s consent to the transfer. There was no meeting of minds between the Hospicio, on one hand,
and the DAR or the tenants, on the other, on the properties and the cause which are to constitute the
contract that is to serve ultimately as the basis for the transfer of ownership of the subject lands.
Instead, the obligation to transfer arises by compulsion of law, particularly P.D. No. 27. Agrarian reform
is justified under the State’s inherent power of eminent domain that enables it to forcibly acquire
private lands intended for public use upon payment of just compensation to the owner. It has even been
characterized as beyond the traditional exercise of eminent domain, but a revolutionary kind of
expropriation. The twin process of expropriation of lands under agrarian reform and the payment of just
compensation is akin to a forced sale, which has been aptly described in common law jurisdictions as
"sale made under the process of the court, and in the mode prescribed by law," and "which is not the
voluntary act of the owner, such as to satisfy a debt, whether of a mortgage, judgment, tax lien, etc."20
The term has not been precisely defined in this jurisdiction, but reference to the phrase itself is made in
Articles 223, 232, 237 and 243 of the Civil Code, which uniformly exempt the family home "from
execution, forced sale, or attachment."21 Yet a forced sale is clearly different from the sales described
under Book V of the Civil Code which are conventional sales, as it does not arise from the consensual
agreement of the vendor and vendee, but by compulsion of law. Still, since law is recognized as one of
the sources of obligation, there can be no dispute on the efficacy of a forced sale, so long as it is
authorized by law.

Issue: Whether the sale prohibited under Section 4 of Act No. 3239 includes even a forced sale.

Held: Evidently, the word "sale," as contemplated by the framers of the law in 1925, pertains to its
concept in civil law, with the requisite of consent being present. It cannot refer to sales or dispositions
that arise by operation of law, such as through judicial execution, or, as in this case, expropriation.

Thus, we can hardly characterize the acquisition of the subject properties from the Hospicio for the
benefit of the tenants as a sale, within the contemplation of Section 4 of Act No. 3239. The transfer
arises from compulsion of law, and not the desire of any parties. Even if the Hospicio had voluntarily
offered to surrender its properties to agrarian reform, the resulting transaction would not be considered
as a conventional sale, since the obligation is created not out of the mandate of the parties, but the will
of the law. The DARRO Order did note that Section 4 of Act No. 3239 is not applicable in this case, since
the transfer is compulsory on the part of the landowner, unlike in ordinary sale. Regrettably, the DAR
Secretary and the Court of Appeals failed to apply that sound principle, preferring to rely instead on the
conclusion that Section 4 was repealed by P.D. No. 27 and the CARL. Nonetheless, even assuming for the
nonce that Section 4 contemplates even forced sales such as those through expropriation, we would
agree with the DAR Secretary and the Court of Appeals that Section 4 is deemed repealed by P.D. No. 27
and the CARL.

NOTE: Congress can amend or repeal a law. If a private individual comes into a contract, the Congress
cannot dissolve it if it was made before the repeal or amendment.

4. The Office of the Solicitor General vs. Ayala Land Incorporated, et. al. [G.R. No. 177056, September
18, 2009]

https://lawphil.net/judjuris/juri2009/sep2009/gr_177056_2009.html

https://jeffsarabusing.wordpress.com/2013/11/26/case-brief-office-of-the-solicitor-general-v-ayala-
land-incorporated/

https://lawyerly.ph/digest/cc346?user=138

Facts:

Respondents Ayala Land, Robinsons, and Shangri-la maintain and operate shopping malls in various
locations in Metro Manila. Respondent SM Prime constructs, operates, and leases out commercial
buildings and other structures, among which, are SM City, Manila; SM Centerpoint, Sta.

Mesa, Manila; SM City, North Avenue, Quezon City; and SM Southmall, Las Piñas.

The shopping malls operated or leased out by respondents have parking facilities for all kinds of motor
vehicles, either by way of parking spaces inside the mall buildings or in separate buildings and/or
adjacent lots that are solely devoted for use as parking spaces.

Respondents expend for the maintenance and administration of their respective parking facilities.

The parking tickets or cards issued by respondents to vehicle owners contain the stipulation that
respondents shall not be responsible for any loss or damage to the vehicles parked in respondents'
parking facilities.
Respondent SM Prime thereafter received information that, pursuant to Senate Committee Report No.
225, the DPWH Secretary and the local building officials of Manila, Quezon City, and Las Piñas intended
to institute, through the OSG, an action to enjoin respondent SM Prime and... similar establishments
from collecting parking fees, and to impose upon said establishments penal sanctions under Presidential
Decree No. 1096, otherwise known as the National Building Code of the Philippines (National Building
Code), and its Implementing Rules and Regulations

(IRR).

The RTC then held that there was no sufficient evidence to justify any award for damages.

The fallo of the 25 January 2007 Decision of the Court of Appeals reads:

WHEREFORE, premises considered, the instant appeals are DENIED. Accordingly, appealed Decision is
hereby AFFIRMED in toto.

Issues:

THE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING THE RULING OF THE LOWER COURT THAT
RESPONDENTS ARE NOT OBLIGED TO PROVIDE FREE PARKING SPACES TO THEIR CUSTOMERS OR THE
PUBLIC.

Ruling:

There is nothing therein pertaining to the collection (or non-collection) of parking fees by respondents.
In fact, the term "parking fees" cannot even be found at all in the entire National Building Code and its
IRR.

Without using the term outright, the OSG is actually invoking police power to justify the regulation by
the State, through the DPWH Secretary and local building officials, of privately owned parking facilities,
including the collection by the owners/operators of such facilities... of parking fees from the public for
the use thereof.
When there is a taking or confiscation of private property for public use, the State is no longer exercising
police power, but another of its inherent powers, namely, eminent domain. Eminent domain enables
the State to forcibly acquire private lands intended for public use upon... payment of just compensation
to the owner.

Although in the present case, title to and/or possession of the parking facilities remain/s with
respondents, the prohibition against their collection of parking fees from the public, for the use of said
facilities, is already tantamount to a taking or confiscation of their... properties.

The State is not only requiring that respondents devote a portion of the latter's properties for use as
parking spaces, but is also mandating that they give the public access to said parking spaces for free.

In conclusion, the total prohibition against the collection by respondents of parking fees from persons
who use the mall parking facilities has no basis in the National Building Code or its IRR. The State also
cannot impose the same prohibition by generally invoking police... power, since said prohibition
amounts to a taking of respondents' property without payment of just compensation.

WHEREFORE, the instant Petition for Review on Certiorari is hereby DENIED.

Principles:

Police power is the power of promoting the public welfare by restraining and regulating the use of
liberty and property. It is usually exerted in order to merely regulate the use and enjoyment of the
property of the owner. The power to regulate, however, does not include the... power to prohibit.

Police power does not involve the taking or confiscation of property, with the exception of a few cases
where there is a necessity to confiscate private property in order to... destroy it for the purpose of
protecting peace and order and of promoting the general welfare; for instance, the confiscation of an
illegally possessed article, such as opium and firearms.

NOTE: Obligations derived from the Law cannot be presumed

5. Spouses San Antonio vs. CA and Spouses Geronimo [G.R. No. 121810, December 7, 2001]

https://www.lawphil.net/judjuris/juri2001/dec2001/Gr_121810_2001.html

Mario and Gregoria Geronimo obtained a loan from the spouses Inocencio and Adoracion San Antonio.
To secure the loan, they mortgaged their two parcels of land.

Subsequently an additional loan was given with an interest of 3.33% per month, thus making their total
obligation in the amount of Two Million Nineteen Thousand Eight Hundred Fifty Nine Pesos.
Spouses Geronimo failed to pay the loan and the interest on the due date, hence, the mortgage was
extra-judicially foreclosed. During the auction sale, petitioners, being the highest bidder bought the two
parcels of land.

Before the one-year redemption period expired, spouses Geronimo filed a complaint for annulment of
extra-judicial foreclosure with preliminary mandatory injunction and a compromise agreement was
made.

In accordance with the stipulations in paragraph 1 of the Compromise Agreement, Spouses San Antonio
executed a Certificate of Redemption and Cancellation of Sale after a payment of Two Million Pesos.

Spouses Geronimo however, failed to transfer the ownership and deliver the titles of the three parcels
of land described in paragraph 2 of the agreement or to pay 2 Million Pesos within the six-month period
from August 25, 1993. It was only on March 4, 1994, after the lapse of six months that private
respondents delivered the three titles to petitioners. As the delivery was beyond the agreed six-month
period, petitioners refused to accept the same or execute an instrument for the resale, reconveyance or
redemption of the property covered by TCT No. RT-6652. Consequently, TCT No. RT-6652 was cancelled
and in lieu thereof, TCT No. T-47229 was issued in the names of petitioners.

Spouses Geronimo filed a motion for executio, which the court granted. Spouses San Antonion filed
Petition for Certiorari with application for a Temporary Restraining Order and/or Writ of Preliminary
Injunction with the Court of Appeals but the CA denied it.

ISSUE:

1. Did the trial court err in granting the writ to execute the compromise judgment?

2. Is Article 1191 of the New Civil Code applicable in this case?

RULING:

1. We find petitioners' petition impressed with merit. A compromise agreement, once approved by final
order of the court, has the force of res judicata between the parties and should not be disturbed except
for vices of consent or forgery.

In this case, the compromise agreement clearly provided spouses Geromimo six months. If after the
lapse of the said period and no delivery is yet made, ownership over the land would be transferred to
Spouses San Antonio

Both the trial court and the Court of Appeals attributed to the Register of Deeds private respondents'
delay in the delivery of the three titles. But as shown in their decisions, private respondents submitted
to the Register of Deeds the pertinent documents for registration of the three titles in petitioners' name
only on March 2, 1994, beyond the six-month period.
Private respondents could have done so earlier, but they did not. This only shows that private
respondents did not intend to truly comply with their obligations.

6. Metropolitan Bank vs. LARRY MARIÑAS [G.R. No. 179105, July 26, 2010]

https://lawphil.net/judjuris/juri2010/jul2010/gr_179105_2010.html

https://lexforiphilippines.files.wordpress.com/2009/12/metrobank-v-marinas.pdf

The bank is empowered to deduct as per the executed promissory note

7. PCIC vs. PNCC [G.R. No. 185066, October 2, 2009]

https://lawphil.net/judjuris/juri2009/oct2009/gr_185066_2009.html

https://pdfcoffee.com/pcic-vs-pncc-pdf-free.html

Phil. Charter Insurance Corp. VS. Phil. National Construction Corp. Facts: PNCC is engaged in the
construction business and tollway operations. On October 16, 1997, PNCC conducted a public bidding
for the supply of labor, materials, tools, supervision, equipment, and other incidentals necessary for the
fabrication and delivery of 27 tollbooths to be used for the automation of toll collection along the
expressways. Orlando Kalingo (Kalingo) won in the bidding and was awarded the contract On November
13, 1997, PNCC issued – in favor of Kalingo – Purchase Order (P.O.) No. 71024L for 25 units of tollbooths
for a total of P 2,100,000.00, and P.O. No. 71025L for two units of tollbooths amounting to P 168,000.00.
These issuances were subject to the condition, among others, that each P.O. shall be covered by a surety
bond equivalent to 100% of the total down payment (50% of the total cost reflected on the P.O.), and
that the surety bond shall continue in full force until the supplier shall have complied with all the
undertakings and covenants to the full satisfaction of PNCC. Kalingo, hence, posted surety bonds –
Surety Bond Nos. 27546 and 27547 – issued by the PCIC. Both surety bonds also contain the following
conditions: (1) the liability of PCIC under the bonds expires on March 16, 1998; and (2) a written
extrajudicial demand must first be tendered to the surety, PCIC, within 15 days from the expiration date;
otherwise PCIC shall not be liable thereunder and the obligee waives the right to claim or file any court
action to collect on the bond PNCC released two checks to Kalingo representing the down payment of
50% of the total project cost.Kalingo in turn submitted the two PCIC surety bonds securing the down
payments, which bonds were accepted by PNCC. On March 3, 4, and 5, 1998, Kalingo made partial/initial
delivery of four units of tollbooths under P.O. No. 71024L. However, the tollbooths delivered were
incomplete or were not fabricated according to PNCC specifications. Kalingo failed to deliver the other
23 tollbooths up to the time of filing of the complaint; despite demands, he failed and refused to comply
with his obligation under the POs. On March 9, 1998, six days before the expiration of the surety bonds
and after the expiration of the delivery period provided for under the award, PNCC filed a written
extrajudicial claim against PCIC notifying it of Kalingo’s default and demanding the repayment of the
down payment on P.O. No. 71024L as secured by PCIC Bond No. 27547, in the amount of P 1,050,000.00.
The claim went unheeded despite repeated demands. For this reason, on April 24, 2001, PNCC filed with
the Regional Trial Court (RTC), Mandaluyong City a complaint for collection of a sum of money against
Kalingo and PCIC. 10[10] PNCC's complaint against PCIC called solely on PCIC Bond No. 27547; it did not
raise or plead collection under PCIC Bond No. 27546 which secured the down payment of P 84,000.00
on P.O. No. 71025L. The RTC, by Decision of October 31, 2005, ruled in favor of PNCC and ordered PCIC
and Kalingo to jointly and severally pay the latter P 1,050,000.00, representing the value of PCIC Bond
No. 27547, plus legal interest from last demand, and P 50,000.00 as attorney's fees. Reconsideration of
the trial court's decision was denied. The trial court made no ruling on PCIC’s liability under PCIC Bond
No. 27546, a claim that was not pleaded in the complaint. On appeal, the CA, by Decision 11[11] of
January 7, 2008, held that the RTC erred in ruling that PCIC's liability is limited only to the payment of P
1,050,000.00 under PCIC Bond No. 27547 which secured the down payment on P.O. No. 71024L. The
appellate court held that PCIC, as surety, is liable jointly and severally with Kalingo for the amount of the
two bonds securing the two POs to Kalingo; thus, the CA also held PCIC liable under PCIC Bond No.
27546 which secured the P 84,000.00 down payment on P.O. No. 71025L

ISSUE: WHETHER THE PCIC SHOULD ALSO BE HELD LIABLE UNDER BOND NO. 27546, COLLECTION UNDER
WHICH WAS NOT SUBJECT OF RESPONDENT PNCC's COMPLAINT FOR COLLECTION OF SUM OF MONEY.

HELD: The fundamental rule is that reliefs granted a litigant are limited to those specifically prayed for in
the complaint; other reliefs prayed for may be granted only when related to the specific prayer(s) in the
pleadings and supported by the evidence on record. Necessarily, any such relief may be granted only
where a cause of action therefor exists, based on the complaint, the pleadings, and the evidence on
record Each of the surety bonds issued by PCIC created a right in favor of PNCC to collect the repayment
of the bonded down payments made on the two POs if contractor Kalingo defaults on his obligation
under the award to fabricate and deliver to PNCC the tollbooths contracted for. Concomitantly, PCIC, as
surety, had the obligation to comply with its undertaking under the bonds to repay PNCC the down
payments the latter made on the POs if Kalingo defaults. It must be borne in mind that each of the two
bonds is a distinct contract by itself, subject to its own terms and conditions. They each contain a
provision that the surety, PCIC, will not be liable for any claim not presented to it in writing within 15
days from the expiration of the bond, and that the obligee (PNCC) thereby waives its right to claim or file
any court action against the surety (PCIC) after the termination of 15 days from the time its cause of
action accrues. This written claim provision creates a condition precedent for the accrual of: (1) PCIC’s
obligation to comply with its promise under the particular bond, and of (2) PNCC's right to collect or sue
on these bonds. PCIC’s liability to repay the bonded down payments arises only upon PNCC's filing of a
written claim – notifying PCIC of principal Kalingo’s default and demanding collection under the bond –
within 15 days from the bond’s expiry date. PNCC’s failure to comply with the written claim provision
has the effect of extinguishing PCIC’s liability and constitutes a waiver by PNCC of the right to claim or
sue under the bond. Liability on a bond is contractual in nature and is ordinarily restricted to the
obligation expressly assumed therein. We have repeatedly held that the extent of a surety's liability is
determined only by the clause of the contract of suretyship and by the conditions stated in the bond. It
cannot be extended by implication beyond the terms of the contract. 20[20] Equally basic is the
principle that obligations arising from contracts have the force of law between the parties and should be
complied with in good faith. 21[21] Nothing can stop the parties from establishing stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good
customs, public order, or public policy PNCC complied with the written claim provision, but only with
respect to PCIC Bond No. 27547. PNCC filed an extrajudicial demand with PCIC informing it of Kalingo’s
default under the award and demanding the repayment of the bonded down payment on P.O. No.
71024L. Conversely, nothing in the records shows that PNCC ever complied with the provision with
respect to PCIC Bond No. 27546. Why PNCC complied with the written claim provision with respect to
PCIC Bond No. 27547, but not with respect to PCIC Bond No. 27546, has not been explained by PNCC.
Under the circumstances, PNCC’s cause of action with respect to PCIC Bond No. 27546 did not and
cannot exist, such that no relief for collection thereunder may be validly awarded

8. William Golangco Construction Corporation vs. PCIB [G.R. No. 142830, March 24, 2006]

https://lawphil.net/judjuris/juri2006/mar2006/gr_142830_2006.html

https://ciap.dti.gov.ph/content/can-contractor-be-held-liable-defects-or-inferior-work-after-final-
payment

FACTS:

William Golangco Construction Corporation (WGCC) and the Philippine Commercial International Bank
(PCIB) entered into a contract for the construction of the extension of PCIB Tower II, which included the
application of a granitite wash-out finish3 on the exterior walls of the building.

PCIB accepted the turnover with a guarantedd bond of 1 year in compliance with the construction
contract in 1992.

Portions of the granitite wash-out finish of the exterior of the building began peeling off and falling from
the walls in 1993 and WGCC made minor repairs after PCIB's request.

In 1994, PCIB entered into another contract with Brains and Brawn Construction and Development
Corporation to re-do the entire granitite wash-out finish after WGCC manifested that it was "not in a
position to do the new finishing work,"though it was willing to share part of the cost.

PCIB filed a request to reimbursement of its expenses for the repairs made by another contractor. It
complained of WGCC’s alleged non-compliance with their contractual terms on materials and
workmanship. WGCC was declared liable, to which they appealed but they were dismissed by the CA.

ISSUE:

Whether or not petitioner WGCC is liable for defects in the granitite wash-out finish that occurred after
the lapse of the one-year defects liability period as per construction contract.

RULING:

No, WGCC is not liable.

The contract did not specify a different period for defects in the granitite wash-out finish; hence, any
defect therein should have been brought to WGCC’s attention within the one-year defects liability
period in the contract.

The defects in the granitite wash-out finish were not the "obligation". The alleged defects occurred
more than a year from the final acceptance by PCIB.
An examination of Article 1719 of the Civil Code is enlightening:

Art. 1719. Acceptance of the work by the employer relieves the contractor of liability for any defect in
the work, unless:

(1) The defect is hidden and the employer is not, by his special knowledge, expected to recognize the
same; or

(2) The employer expressly reserves his rights against the contractor by reason of the defect.

Contrary to the CA’s conclusion, the contract should not be interpreted to favor the one who caused the
confusion

9. Domestic Petroleum Retailer Corp. v. Manila International Airport Authority, [G.R. No. 210641,
March 27, 2019]

https://lawyerly.ph/digest/cfe40?user=6565

https://pdfcoffee.com/domestic-petroleum-retailer-corporation-v-manila-international-airport-
authority-pdf-free.html

Facts:

[petitioner DPRC] and [respondent MIAA] entered into a Contract of Lease whereby the former leased
from the latter... parcel of land and... building

[Petitioner DPRC] was obliged to pay monthly rentals

[respondent MIAA] passed Resolution No. 98-30... increasing the rentals paid by its concessionaires and
lessees

[Petitioner] DPRC initially refused to pay the increased rentals which was decreed without prior notice
and hearing

[respondent MIAA] demanded its payment of... rental in arrears which was based on the increase
prescribed in Resolution No. 98-30 with 2% interest compounded monthly

[petitioner DPRC] protested in writing to [respondent MIAA] the increased rentals and the
computation[.] [H]owever, it also signified its intention to comply in good faith with the terms and
conditions of the lease contract by paying

In the said case, the Court nullified Resolution Nos. 98-30 and 99-11 issued by respondent MIAA for non-
observance of the notice and hearing requirements for the fixing rates required

[petitioner DPRC] advised [respondent] MIAA of its intention to stop paying the increased rental rate,
and on January 1, 2006, it stopped paying the increased rental rate[,] but continued paying the original
rental rate prescribed in the lease contract

[respondent] MIAA required the payment of P645,216.21 allegedly representing the balance of the
rentals from January up to June 2006
[petitioner DPRC] sent its reply to [respondent] MIAA denying the unpaid obligation, reiterating that the
rental could no longer be computed based on the nullified Resolution No. 98-30

[Respondent] MIAA ignored its demand[,] prompting [petitioner DPRC] to send a final written demand

[RTC] rendered [its Decision, ruling in favor of petitioner DPRC.

CA affirmed the RTC's Decision holding respondent MIAA liable to petitioner DPR

CA found that the liability of respondent MIAA to petitioner DPRC for overpaid monthly rentals was in
the nature of a quasi-contract of solutio indebiti.

CA held that "the claim of refund must be commenced within six (6) years from date of payment
pursuant to Article 1145(2)... of the Civil Code... he CA found that, despite the records showing that
petitioner DPRC made overpayment in monthly rentals from December 11, 1998 up to December 5,
2005, such claim could not be fully awarded to petitioner DPRC due to prescription.

the claim for refund must be made within six (6) years from date of payment. Since [petitioner] DPRC
demanded the refund of the increase in monthly rentals mistakenly paid only on July 27, 2006 and filed
this case before the [RTC] only on December 23, 2008, it can recover only those paid during the period
from January 9,2003 to December 5, 2005

Hence, the instant Petition.

Issues:

whether the CA was correct in amending the RTC's Decision, modifying the amount of respondent
MIAA's liability from the full amount of P9,593,179.87 to just P3,839,643.05 plus legal interest at 12%
per annum computed from the time of extra-judicial demand on July 27, 2006, on the basis of the
application of the six-year prescriptive period governing the quasi-contract of solutio indebiti.

Ruling:

The court finds that petitioner DPRC is entitled to the full amount of ₱9,593,179.87 plus legal interest at
12% per annum computed from the time of extrajudicial demand on July 27, 2006.

After petitioner DPRC made its written extrajudicial demand on July 27, 2006, it actually had until July
27, 2016 to file an action for the full recovery of the overpayment of monthly rentals.

According to Article 1155 of the Civil Code, the prescription of actions is interrupted when a written
extrajudicial demand is made. And so, when written extrajudicial demand for refund of overpayments
was made by petitioner DPRC on July 27, 2006, not only was the prescriptive period to file an action
suspended; jurisprudence holds that "[t]he interruption of the prescriptive period by written
extrajudicial demand means that the said period would commence anew from the receipt of the
demand[,] x x x written extrajudicial demand wipes out the period that has already elapsed and starts
anew the prescriptive period."

Instead of the prescriptive period of six years for quasi-contracts, it is Article 114435 of the Civil Code
that finds application in the instant case. This Article provides that an action based on a written contract
must be brought within 10 years from the time the right of action accrues.

Therefore, with the absence of the two essential requisites of solutio indebiti in the instant case,
petitioner DPRC's cause of action is not based on the quasi-contract of solutio indebiti.

Solutio indebiti applies when payment was made on the erroneous belief of facts or law that such
payment is due.

In the case at hand, petitioner DPRC's overpayment of rentals from 1998 to 2005 was not made by sheer
inadvertence of the facts or the misconstruction and misapplication of the law. Petitioner DPRC did not
make payment because it mistakenly and inadvertently believed that the increase in rentals instituted
by the subsequently voided Resolution No. 98-30 was indeed due and demandable. From the very
beginning, petitioner DPRC was consistent in its belief that the increased rentals were not due as
Resolution No. 98-30 was, in its view, void.

-----------------------------------

In the instant case, the Court finds that the essential requisites of solutio indebiti are not present.

it is undisputed by all parties that respondent MIAA and petitioner DPRC are mutually bound to each
other under a Contract of Lease

Hence, with respondent MIAA and petitioner DPRC having the juridical relationship of a lessor-lessee, it
cannot be said that in the instant case, the overpayment of monthly rentals was made when there
existed no binding juridical tie or relation between the pay or, i.e., petitioner DPRC, and the person who
received the payment, i.e., respondent MIAA.

the Court finds that the cause of action of petitioner DPRC is based on the violation of a contractual
stipulation in the parties' Contract of Lease, and not due to the existence of a quasi-contract.

Hence, by filing its Complaint, petitioner DPRC invoked the Contract of Lease and alleged that
respondent MIAA violated the aforementioned contractual stipulation, considering that the latter
imposed a price escalation of monthly rentals despite reneging on its contractual obligation to first issue
a valid Administrative Order and give petitioner DPRC prior notice.

Just because the Contract of Lease in itself may be silent as to petitioner DPRC's entitlement to a
refund does not mean that such claim for refund is not provided for in the contract and cannot be
asserted by petitioner DPRC.

It must be stressed that applicable laws form part of, and are read into, contracts without need for any
express reference thereto.
Furthermore, it cannot be said that petitioner DPRC's payments in monthly rentals from December 11,
1998 up to December 5, 2005 in observance with the subsequently nullified Resolution No. 98-30 were
made due to mistake on the part of petitioner DPRC.

petitioner DPRC deliberately made the payments in accordance with respondent MIAA's Resolution No.
98-30, albeit under protest.

petitioner DPRC also signified its intention to comply in good faith with the terms and conditions of the
lease contract by paying the amount charged in accordance with Resolution No. 98-30 despite
registering its objection to its validity.

Solutio indebiti applies when payment was made on the erroneous belief of facts or law that such
payment is due.[34] In the case at hand, petitioner DPRC's overpayment of rentals from 1998 to 2005
was not made by sheer inadvertence of the facts or the misconstruction and misapplication of the law.
Petitioner DPRC did not make payment because it mistakenly and inadvertently believed that the
increase in rentals instituted by the subsequently voided Resolution No. 98-30 was indeed due and
demandable. From the very beginning, petitioner DPRC was consistent in its belief that the increased
rentals were not due as Resolution No. 98-30 was, in its view, void.

Therefore, with the absence of the two essential requisites of solutio indebiti in the instant case,
petitioner DPRC's cause of action is not based on the quasi-contract of solutio indebiti.

WHEREFORE, premises considered, the instant Petition is hereby GRANTED. The Decision dated May 31,
2013 and Resolution dated November 29, 2013 promulgated by the Court of Appeals, Special Second
Division and Former Special Second Division, respectively in CA-G.R. CV No. 98378 are PARTIALLY
REVERSED and SET ASIDE insofar as the Court of Appeals reduced the total amount of liability of
respondent Manila International Airport Authority to P3,839,643.05, plus legal interest at 12% per
annum computed from the time of the extrajudicial demand on July 27, 2006. Accordingly, the Decision
dated August 15, 2011 of the Regional Trial Court, Pasay City, Branch 119 in Civil Case No. R-PSY-08-
08963, as clarified in its Order dated November 17, 2011, is REINSTATED. SO ORDERED.

Principles:

In order to establish the application of solutio indebiti in a given situation, two conditions must concur:
(1) a payment is made when there exists no binding relation between the payor who has no duty to pay,
and the person who received the payment, and (2) the payment is made through mistake, and not
through liberality or some other cause.

10. People vs. Sayo y Reyes [G.R. No. 227704, April 10, 2019]

https://lawphil.net/judjuris/juri2019/apr2019/gr_227704_2019.html

https://lawyerly.ph/digest/cfe6d?user=4703

FACTS:
The combined testimonies of AAA, BBB, and CCC known as the "plaza girls" disclosed thatthese "plaza
girls" have been under the control and supervision of SAYO as commercial sex workers, who were
minors.

Whenever they have customers, SAYO would bring them either to a motel or to ALFREDO ROXAS's
house to use a room and Roxa provided condoms for a fee.

The "Oplan Sagip Angel" operatives proceeded to the target area in Pasig City.

They were approached by SAYO who bluntly asked if they wanted women and she further inquired if
they wanted 15 year-old girls.

When an exchange of payment was made, the agents announced it wa a raid to which SAYO and ROXAS
were arrested.

Sayo was found guilty beyond reasonable doubt of Qualified Trafficking in Persons.

Roxas clained that on the night of the raid, he went out because of a commotion and saw Sayo with the
women. He was asked to rent one of his rooms but refused. er rejecting their request for several times,
the male persons forced him to accept the money which turned out to be dusted with ultra violet
powder.

RTC held that the prosecution was able to prove the guilt of accused-appellants beyond reasonable
doubt. The testimonies of AAA, BBB, and. CCC were clear, categorical, and corroborative of each other's
testimony. The testimony of the arresting officer, PO2 Anthony Ong (PO2 Ong), was also categorical and
straightforward regarding the investigation, pre-surveillance, entrapment procedure, and arrest of Sayo
and Roxas.

This was appealed. During the course of case, Sayo died.

ISSUE:

Whether the guilt of Roxas was proven beyond reasonable doubt.

RULING:

Roxas is found guilty of conviction of Qualified Trafficking in Persons and Trafficking in Person.

Based on the evidence adduced during trial, the prosecution was able to establish that Alfredo Roxas
owned a house/apartment; that said house/apartment had a room; that the room was offered for lease
for every paying customer of the complainants. zThat Roxas had knowledge of the fact that the
complainants engaged in sex for a fee as he cleaned the room after the complainant and her customer
finished using it and sold condoms to the male customers

In the instant case, while the Information alleged that Roxas "received and harbored" AAA, BBB, and
CCC, it was not proven during the trial that Roxas directly participated in their prostitution or solicited or
assigned customers for them. However, his act of renting out a room in his house promoted and
facilitated their prostitution. Roxas profited from the rental of the room and his actions are just as
deplorable. Thus, Roxas is liable to pay moral and exemplary damages to AAA, BBB, and CCC.

11. People vs. Democrito Paras [G.R. No. 192912, October 22, 2014]

https://lawphil.net/judjuris/juri2014/oct2014/gr_192912_2014.html

https://www.micvillamayor.com/people-v-paras/

FACTS:

Accused-appellant Democrito Paras was charged with rape against a 17-year-old minor. The RTC and the
CA convicted the accused. Hence, he appealed to the SC. Police Superintendent Roberto Rabo sent a
letter to the Court stating that the accused-appellant had died at the New Bilibid Prison Hospital on
January 24, 2013. The Court received the letter only on August 27, 2014.

ISSUE:

Is the Court’s Decision dated June 4, 2014 still valid in line with the accused-appellant’s death?

HELD:

NO, the Court’s Decision dated June 4, 2014 had been rendered ineffectual and therefore set aside.
Under Article 89, paragraph 1 of the Revised Penal Code, as amended, the death of an accused pending
his appeal extinguishes both his criminal and civil liability ex delicto. Thus, upon the death of the accused
pending appeal of his conviction, the criminal action is extinguished inasmuch as there is no longer a
defendant to stand as the accused; the civil action instituted therein for the recovery of civil liability ex
delicto is ipso facto extinguished, grounded as it is on the criminal action.

Art. 89. How criminal liability is totally extinguished. – Criminal liability is totally extinguished:

1. By the death of the convict, as to the personal penalties; and as to pecuniary penalties, liability
therefore is extinguished only when the death of the offender occurs before final judgment[.]

In this case, when the accused-appellant died on January 24, 2013, his appeal to this Court was still
pending. The Decision dated June 4, 2014 was thereafter promulgated as the Court was not immediately
informed of the accused-appellant's death.

The death of the accused-appellant herein, thus, extinguished his criminal liability, as well as his civil
liability directly arising from and based solely on the crime committed.

Accordingly, the Court's Decision dated June 4, 2014 had been rendered ineffectual and the same must
therefore be set aside. The criminal case against the accused-appellant must also be dismissed.

12. Bernardo vs. People [G.R. No. 182210, October 05, 2015]
https://lawyerly.ph/digest/cefaa?user=2432

https://pdfcoffee.com/36-bernardo-v-people-saysondocx-pdf-free.html

FACTS:

Bernardo obtained a loan from Bumanglag. That loan was evidenced by a promissory note. Prior to the
loan's maturity, Bernardo took back the title from Bumanglag to use as a collateral in another
transaction and instead issues five Far East Bank and Trust Company (FEBTC) checks.

When Bumanglag tried to cash in the checks in the agreed dates, it was found that the account was
closed and informed Bernardo.

In her testimony, Bernardo argued that she could not be held liable for violation of B.P. 22 because the
questioned checks were presented beyond the 90-day period provided under the law. She also denied
having received any notice of dishonor, which she insisted was essential to prove the material element
of knowledge of insufficiency of funds.

After Bernardo and her counsel again failed to appear in the hearing, the RTC considered her right to
present additional evidence waived.

Bernardo field a motion for reconsideration but failed to submit her formal offer of evidence. As a
result, the RTC declared that Bernardo had waived her right to submit her formal offer of evidence and
ruled that Bernardo be imprisoned and pay P460,000.00, plus 12% interest and 5% penalty charges.

Bernardo appealed but affirmed the conviction, however deleted the penalty of imprisonment.

In denying Bernardo's appeal, the CA noted that Bernardo failed to adduce sufficient evidence of
payment. The CA further held that the 90-day period within which to present a check under B.P. 22 is
not an element of the crime.

Bernardo moved for reconsideration but the CA denied her motion; hence, the present petition.

Bernardo died during the course and was now represented by her heirs.

ISSUE:

Did Bernardo's death extinguished her civil liability.

RULING.

Bernardo's civil liability may be enforced in the present case despite her death.

As a general rule, the death of an accused pending appeal extinguishes her criminal liability and the
corresponding civil liability based solely on the offense.

The independent civil liabilities, however, survive death and an action for recovery therefore may be
generally pursued but only by filing a separate civil action.
Bernardo's death pending appeal converted the present action to purely an enforcement of the civil
liability incurred. In particular, the focal issue in the present petition is no longer Bernardo's criminal
liability for violation of B.P. 22 but her civil liability, which is principally based on contract and the
corresponding damage Bumanglag suffered due to Bernardo's failure to pay. Under these
circumstances, Bernardo's B.P. 22 defense (that the checks were presented beyond the 90-day period
and that she never received a notice of dishonor) were no longer relevant.

Bumanglag's possession of the promissory note, coupled with the dishonored checks, strongly
buttresses her claim that Bernardo's obligation had not been extinguished.

13. Joaquin, et.al, vs. Felix Ancieto [G.R. No. L-18719, October 31, 1964]

https://lawphil.net/judjuris/juri1964/oct1964/gr_l-18719_1964.html

FACTS:

A taxicab driven by Aniceto, and owned by Rodelas bumped into Joaquin which resulted in physical
injuries.

Aniceto was found guilty with serious physical injuries through reckless imprudence. However, no ruling
was made on his civil liability to the offended party in view of the latter's reservation to file a separate
civil action for damages for the injuries suffered by her.

Aniceto appealed the case, and Joaquin filed a case for damages. Aniceto and Rodelas were made
defendants.

At the trial of this case, the plaintiff blocked all attempts of Rodelas to prove that, as employer, he had
exercised due diligence in the selection and supervision of his employee.

ISSUE:

May an employee's primary civil liability for crime and his employer's subsidiary liability therefor be
proved in a separate civil action even while the criminal case against the employee is still pending?

RULING:

Without the conviction of the employee, the employer cannot be subsidiarily liable.

Article 33 of the Civil Code authorizes a civil action that is "entirely separate, and distinct from the
criminal action,"

It cannot apply to an action against the employer to enforce his subsidiary civil liability as stated above,
because such liability arises only after conviction of the employee in the criminal case. Any action
brought against him before the conviction of his employee is premature.
14. Pacis vs. Morales [G.R. No. 169467, February 25, 2010]

https://lawphil.net/judjuris/juri2010/feb2010/gr_169467_2010.html

https://vbdiaz.wordpress.com/2013/03/28/pacis-vs-morales/

FACTS:

Alfred Dennis Pacis, then 17 years old, died due to a gunshot wound in the head which he sustained
while he was at the Top Gun Firearm[s] and Ammunition[s] Store located at Upper Mabini Street, Baguio
City. The gun store was owned and operated by defendant Jerome Jovanne Morales.

The bullet which killed Alfred Dennis Pacis was fired from a gun brought in by a customer of the gun
store for repair.

Morales was not in the store at the time and requested sales agents Matibag and Herbolario to look
after the gun store.

Matibag and Herbolario brought out the gun from the drawer, to which Alfred got hold of. When he
tried to give it back to Matibag, the gun went off with the bullet hitting the young Alfred in the head.

A criminal case for homicide was filed against Matibag. The judgment was in favor of the Spouses Pacis
and Morales was ordered to pay for compensation and damages,

This was appealed to the CA and the decision was reversed. Hence, this petition.

ISSUE:

Was Morales negligent?

RULING:

Yes, he was found negligent.

Art. 2176. 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 quasi-delict and is governed by the provisions of this Chapter.

As a gun store owner, respondent is presumed to be knowledgeable about firearms safety and should
have known never to keep a loaded weapon in his store to avoid unreasonable risk of harm or injury to
others. Morales has the duty to ensure that all the guns in his store are not loaded. For failing to insure
that the gun was not loaded, respondent himself was negligent. Furthermore, it was not shown in this
case whether respondent had a License to Repair which authorizes him to repair defective firearms to
restore its original composition or enhance or upgrade firearms.

15. Picart vs. Smith [G.R. No. L-12219, March 15, 1918]
https://lawphil.net/judjuris/juri1918/mar1918/gr_l-12219_1918.html

https://vbdiaz.wordpress.com/2011/03/26/picart-vs-smith-jr/

https://lawyereering.com/2021/09/20/case-digest-amado-picart-plaintiff-appellant-vs-frank-smith-jr-
defendant-appellee-g-r-no-l-12219-march-15-1918%EF%BF%BC/

FACTS:

On December 12, 1912, Picart was riding on his pony over said bridge. Before he had gotten half way
across, Smith approached from the opposite direction in an automobile. As Smith neared the bridge he
saw a horseman on it and blew his horn to give warning of his approach. He gave two more successive
blasts, as it appeared to him that the man on horseback before him was not observing the rule of the
road.

Picart saw the automobile coming and heard the warning signals. However, being perturbed by the
novelty of the apparition or the rapidity of the approach, he pulled the pony closely up against the
railing on the right side of the bridge instead of going to the left. He says that the reason he did this was
that he thought he did not have sufficient time to get over to the other side. As the automobile
approached, Smith guided it toward his left, that being the proper side of the road for the machine.
Smith assumed that Picart would move to the other side and when it appeared that he would hit the
horse, turned his car but it spooked the animal to which turned its body across the bridge, got hit by the
car and the limb was broken. The horse fell and its rider was thrown off. This resulted in the death of the
horse and injury for Picart.

ISSUE:

WON Smith was guilty of negligence such as gives rise to a civil obligation to repair the damage done

RULING:

Yes, he was negligent.

It will be noted that the negligent acts of the two parties were not contemporaneous, since the
negligence of Smith succeeded the negligence of the Picart by an appreciable interval. Under these
circumstances the law is that the person who has the last fair chance to avoid the impending harm and
fails to do so is chargeable with the consequences, without reference to the prior negligence of the
other party.

In view of the known nature of horses, there was an appreciable risk that, if the animal in question was
unacquainted with automobiles, he might get exited and jump under the conditions which here
confronted him. When the defendant exposed the horse and rider to this danger he was, in our opinion,
negligent in the eye of the law.
16. BPI Express vs. CA and Marasigan [G.R. No. 120639. September 25, 1998]

https://lawphil.net/judjuris/juri1998/sep1998/gr_120639_1998.html

https://lawyerly.ph/digest/c8dd1?user=6428

FACTS:

Atty. Marasigan has a BPI credit card with a limit of P3,000.00 and with a monthly billing every 27th of
the month. His membership was renewed for another year or until February 1990 and the credit limit
was increased to P5,000.00. He oftentimes exceeded his credit limits, but this was never taken against
him and his mode of paying his monthly bills in check was tolerated.

October 1989, a transaction of P8,987.84 was not paid in due time. He was informed that BPI was
requiring him to issue a check for P15,000.00 which would include his future bills, and was threatening
to suspend his credit card. Atty. Marasigan issued a check with the said amount, coming from a different
bank.

A notice was snet to inform Atty. Marasigan him of the temporary suspension of the privileges of his
credit card and the inclusion of his account number in their Caution List. He was also told to refrain from
further use of his credit card to avoid any inconvenience/embarrassment and that unless he settles his
outstanding account with the defendant within 5 days from receipt of the letter, his membership will be
permanently cancelled. There was no showing that he received the letter. Confident that his account
was settled, he made another transaction and found that his card was dishonored.

Atty Marasigan requested his bank to stop the check while requested to get the exact billing due from
BPI.

A complaint was filed against BPI for damages which ruled in favor of Marasigan.

BPI appealed to the CA hence the present petition.

ISSUE: Whether or not Marasigan can recover moral damages arising from the cancellation of his credit
card BPI

RULING:

No, he could not. By his own admission private respondent no payment within thirty days and the post
dated check was for a later date. Insofar, BPI could automatically suspend his credit card.

Finally, we find no legal and factual basis for private respondent's assertion that in canceling the credit
card of the private respondent, petitioner abused its right under the terms and conditions of the
contract.

It was petitioner's failure to settle his obligation which caused the suspension of his credit card and
subsequent dishonor at Café Adriatico. He can not now pass the blame to the petitioner for not
notifying him of the suspension of his card. As quoted earlier, the application contained the stipulation
that the petitioner could automatically suspend a card whose billing has not been paid for more than
thirty days. Nowhere is it stated in the terms and conditions of the application that there is a need of
notice before suspension may be affected as private respondent claims.

As it was private respondent's own negligence which was the proximate cause of his embarrassing and
humiliating experience, we find the award of damages by the respondent court clearly unjustified. We
take note of the fact that private respondent has not yet paid his outstanding account with petitioner.

17. VDM Trading, Inc. vs. Carungcong [G.R. No. 206709, February 6, 2019]

https://lawphil.net/judjuris/juri2019/feb2019/gr_206709_2019.html

https://pdfcoffee.com/tort-and-damges-vdm-trading-vs-carungcong-pdf-free.html

https://www.scribd.com/document/467461173/VDM-Trading-vs-Carungcong

FACTS:

VDM and Spouses Domingo were owner of a unit at Wack Wack Twin Towers Condominium. Spouses
Domingo are the actual occupants of the Unit.

While Sps. Domingo were in the United States, the wife's sister found that there was a leak on the
ceiling that persisted for several days and informed the spouse's lawyer, Atty. Villareal .

Atty. Villareal met with the property manager and found that the unit above them was owned by
Carungcong and leased to Tan.

Cruz allegedly explained that the unit's balcony, which was being utilized as a laundry area, had
unauthorized piping and plumbing works installed therein, which were in violation of respondent Wack
Wack's rules and regulations, as well as the building's original plans. Atty. Villareal conducted his own
inspection of the Unit in the presence of Lagman-Castillo and Cruz, and noted the damages.

For this reason, on behalf of the petitioners Sps. Domingo, Atty. Villareal sent a letter to Wack Wack;
and Carungcong make restoration works and/ or pay for the damages caused upon the Unit. No
response was receivedm so a complaint was lodged to the RTC

RTC granted the complaint and ordered Carungcong to pay for damages.

Carungcong appealed to the CA and was granted, hence this petition.

ISSUE: Whether there is negligence on the part of Carungcong.

RULING: NO. According to Article 2176 of the Civil Code, 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.
A quasi-delict has the following elements: a) the damage suffered by the plaintiff; b) the act or omission
of the defendant supposedly constituting fault or negligence ; and c) the causal connection between the
act and the damage

sustained by the plaintiff, or proximate cause. 32

A perusal of the evidence on record shows that the foregoing elements of a quasi-delict are absent
insofar as respondents Carungcong and Wack Wack are concerned.

The full extent of the damage caused to the petitioners' Unit was not sufficiently proven.

Aside from the purely self-serving testimony of Atty. Villareal, the sole witness of the petitioners who is
also the petitioners' counsel, there was no sufficient evidence presented to show the extent of the
damage caused to the Unit. Fault or negligence on the part of respondents Carungcong and Wack Wack
was not proven.

As regards the second element of a quasi-delict, a careful perusal of the evidence on record shows that
the petitioners failed to present even a shred of evidence that there was fault or negligence on the part
of the respondents Carungcong and Wack Wack.

The Court has held that in a cause of action based on quasi-delict, the negligence or fault should be
clearly established as it is the basis of the action.

The burden of proof is thus placed on the plaintiff, as it is the duty of a party to present evidence on the
facts in issue necessary to establish his claim or defense by the amount of evidence required by law.
Therefore, if the plaintiff alleged in his complaint that he was damaged because of the negligent acts of
the defendant, he has the burden of proving such negligence.

Applying the foregoing in the instant case, the burden of proving fault or negligence was clearly not
discharged by VDM and Spouses Domingo.

Proximate cause between the supposed damage caused and the plumbing works undertaken was not
established.
To constitute quasi-delict, the alleged fault or negligence committed by the defendant must be the
proximate cause of the damage or injury suffered by the plaintiff.

Proximate cause is that cause which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury and without which the result would not have occurred.

Stated in simple terms, it must be proven that the supposed fault or negligence committed by the
respondents, i. , the undertaking of plumbing works on Unit 2308B-1, was the cause of the damage to
the Unit.

Such was not proven by the petitioners.

============End 2/14/22===============

18. Dela Cruz v. Octaviano [G.R. No. 219649, July 26, 2017]

https://lawphil.net/judjuris/juri2017/jul2017/gr_219649_2017.html

https://sarimanoklawclinic.com/2021/03/25/al-dela-cruz-v-capt-renato-viano-and-wilma-viano-g-r-no-
219649-july-26-2017/

https://pdfcoffee.com/dela-cruz-vs-octaviano-2017-pdf-free.html

FACTS:

Renato Viano, Wilma Viano, and Janet Viano, rode a tricycle driven by Eduardo Padilla. While at the
tricycle, Renato was asking his mother for a change to complete his ten-peso bill when suddenly he saw
a light from an oncoming car which was going too fast, driven by Dela Cruz. The car hit the tricycle
where Renato was riding and was thrown from the vehicle.He was then treated at the Fort Bonifacio
Hospital.

A case was file for damages against Dela Cruz. The RTC however, dismissed the claims citing that Dela
Cruz version of events were more believable due to the was corroborated by Sgt. Martinez who
testified.

The CA reversed the decision and awarded the Viano's damages.

ISSUE:

Whether or not the court erred in holding Dela Cruz negligent for driving his car.
RULING:

No, it did not err in it's decision. In ruling that Dela Cruz was negligent, the CA correctly appreciated the
pieces of evidence presented.

There was no doubt that Renato suffered injury due to the accident and entitled to the award of moral
and exemplary damages.

It is extant in the records that defendants did not overturn or disprove the plaintiffs' claim for actual
damages such as the hospital bills/expenses which were duly supported by documentary evidence
(receipts). It was also duly proven that defendant Al Dela Cruz acted with gross disregard for the
suffering of his victims when he refused to board them in his car and only did so when forced by the by-
standers who assisted the victims, when he drove to his house first before driving to a clinic then to
[the] hospital when it was obvious that Renato Octaviano's wound was severe and needed immediate
professional attention. These insensitivity of defendant caused suffering to the plaintiffs that must be
compensated.

There is ample evidence to show that the defendant was negligent within the purview of Article 2176 of
the Civil Code. Hence, he cannot escape liability.

19. Phil. National Railways Corp. v. Vizcara, [G.R. No. 190022, February 15, 2012]

https://lawphil.net/judjuris/juri2012/feb2012/gr_190022_2012.html

https://lawyerly.ph/digest/c8128?user=1346

FACTS:

Reynaldo Vizcara was driving a passenger jeepney headed towards Bicol, along with Cresencio, Crispin,
Samuel, Dominador and Joel. While crossing the railroad track, the train operated by Japhet Estranas.
Suddenly turned up and rammed the passenger jeepney. The collision resulted to the instantaneous
death of Reynaldo, Cresencio, Crispin, and Samuel. On the other hand, Dominador and Joel, sustained
serious physical injuries.

At the time of the accident, there was no level crossing installed at the railroad crossing. Additionally,
the "Stop, Look and Listen" signage was poorly maintained. The "Stop" signage was already faded while
the "Listen" signage was partly blocked by another signboard.

The RTC ruled in favor of the victims.

This was appealed in the CA, hence this petition.

ISSUE:

THE CA ERRED IN FINDING THAT THE PROXIMATE CAUSE OF THE ACCIDENT WAS THE NEGLIGENCE OF
PNR and Estranas.
RULING:

The negligence of PNR, Estranas and Saga was the proximate cause of the accident.

Article 2176 of the New Civil Code prescribes a civil liability for damages caused by a person's act or
omission constituting fault or negligence. It states:

Article 2176. 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 was no pre-existing contractual
relation between the parties, is called quasi-delict and is governed by the provisions of this chapter.

Their failure to install adequate safety devices at the railroad crossing which proximately caused the
collision.

Aside from the absence of a crossing bar, the "Stop, Look and Listen" signage installed in the area was
poorly maintained, hence, inadequate to alert the public of the impending danger. A reliable signaling
device in good condition, not just a dilapidated "Stop, Look and Listen" signage, is needed to give notice
to the public. It is the responsibility of the railroad company to use reasonable care to keep the signal
devices in working order. Failure to do so would be an indication of negligence.

There was no contributory negligence on the part of the victims.

20. Orient Freight International, Inc. v. Keihin-Everett Forwarding Co., Inc., [G.R. No. 191937, August 9,
2017]

https://lawyerly.ph/digest/cf80f?user=9558

https://lawyerly.ph/juris/view/cf80f?user=gMjZlT3BwSElLMkt2MHp4SjYvZ1hsVkxUTlNBeUxpUVJLa2plZ2
QzdnVWYz0=

FACTS:

Keihin-Everett entered into a Trucking Service Agreement with Matsushita. Under the Trucking Service
Agreement, Keihin-Everett would provide services for Matsushita's trucking requirements. These
services were subcontracted by Keihin-Everett to Orient Freight, through their own Trucking Service
Agreement executed on the same day and would expire on December 31, 2001.

Keihin-Everett executed an In-House Brokerage Service Agreement for Matsushita's Philippine Economic
Zone Authority export operations. Keihin-Everett continued to retain the services of Orient Freight,
which sub-contracted its work to Schmitz Transport and Brokerage Corporation.

In April 2002, Matsushita called Rizada who was the Sales manager about a news column. It reported
that stolen truck filled with shipment of video monitors and CCTV systems owned by Matsushita. Orient
Freight stated that the tabloid report had blown the incident out of proportion, claiming that incident
simply involved the breakdown and towing of the truck and did not miss the closing time of the vessel
intended for the shipment.

Keihin-Everett directed Orient Freight to investigate the matter and Matsushita got a letter reporting
the same story.

When the shipment arrived in Yokohama, Japan it was discovered that some of the shipment were
missing.

Keihin-Everett independently investigated the incident and Orient Freight wrote back to admit that its
previous report was erroneous and that pilferage was apparently proven.

Matsushita terminated its In-House Brokerage Service Agreement with Keihin-Everet.

Keihin-Everett sent a letter to Orient Freight demanding compensation due to their mishandling of the
situation caused the termination of Keihin-Everett's contract with Matsushita.

This was not heeded by Orient Freight and a case was handled the the RTC which sided with Keihin-
Everett.

This was appealed, hence this petition.

ISSUE:

Second, whether the Court of Appeals, considering the existing contracts in this case, erred in applying
Article 2176 of the Civil Code.

Whether Orient Freight, Inc. was negligent for failing to disclose the facts surrounding the incident.

RULING:

Orient Freight was negligent in not reporting and not thoroughly investigating the incident despite
Keihin-Everett's instruction to do so.

It is governed by Article 2176 of the Civil Code:

ART. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done.

Negligence may either result in culpa aquiliana or culpa contractual. Culpa aquiliana is the "the wrongful
or negligent act or omission which creates a vinculum juris and gives rise to an obligation between two
persons not formally bound by any other obligation,"

The lower courts established that Orient Freight negligence resulted in Matsushita's cancellation of its
contract with Keihin-Everett

21. Spouses Estrada v. Philippine Rabbit Bus Lines, Inc. [G.R. No. 203902, July 19, 2017]
https://lawphil.net/judjuris/juri2017/jul2017/gr_203902_2017.html

https://lawyerly.ph/digest/cf6f3?user=8190

https://pdfcoffee.com/2017digestspsestrada-v-phil-rabbit-pdf-free.html

Clearly, moral damages are not recoverable in this case. The CA, therefore, did not err in deleting the
award for moral damages.

22. Torres-Madrid Brokerage, Inc. v. FEB Mitsui Marine Insurance Co., Inc., [G.R. No. 194121, July 11,
2016]

https://lawphil.net/judjuris/juri2016/jul2016/gr_194121_2016.html

https://lawyerly.ph/digest/cf2ae?user=2467

https://legallilies.wordpress.com/2021/06/26/case-digest-torres-madrid-brokerage-v-feb-mitsu-marine-
insurance-manalastas/

FACTS:

A shipment of various electronic goods from Thailand and Malaysia arrived at the Port of Manila for
Sony Philippines, Inc.

Sony had engaged the services of TMBI to facilitate, process, withdraw, and deliver the shipment from
the port to its warehouse in Biñan, Laguna.

TMBI – who did not own any delivery trucks – subcontracted the services of Benjamin Manalastas’
company, BMT Trucking Services (BMT), to transport the shipment and Sony was notified with no
objections.

Four BMT trucks picked up the shipment from the port

However, BMT could not immediately undertake the delivery because of the truck ban and because the
following day was a Sunday.

Four trucks left BMT’s garage for Laguna but only three trucks arrived at Sony’s Biñan warehouse.

The truck driven by Rufo Reynaldo Lapesura was found abandoned along the Diversion Road in Filinvest,
Alabang, Muntinlupa City. Both the driver and the shipment were missing.

BMT’s Operations Manager Melchor Manalastas and Victor Torres, TMBI’s General Manager, of the
development. went to Muntinlupa together to inspect the truck and to report the matter to the police.

Victor Torres also filed a complaint with the National Bureau of Investigation (NBI) against Lapesura for
"hijacking."9 The complaint resulted in a recommendation by the NBI to the Manila City Prosecutor’s
Office to prosecute Lapesura for qualified theft and Sony was informed of the loss.

Sony demanded payment for the lost shipment but BMT refused to pay.
Sony filed an insurance claim with the Mitsui, the insurer of the goods.

After being subrogated to Sony’s rights, Mitsui sent TMBI a demand letter, or payment of the lost goods.
TMBI refused to pay Mitsui’s claim and a complaint was filed.

TMBI, in turn, impleaded Benjamin Manalastas, the proprietor of BMT, as a third-party defendant. TMBI
alleged that BMT’s driver, Lapesura, was responsible for the theft/hijacking of the lost cargo and claimed
BMT’s negligence as the proximate cause of the loss. TMBI prayed that in the event it is held liable to
Mitsui for the loss, it should be reimbursed by BMT.

Another incident was found involving the same companies back in 1997 but neither Sony nor its insurer
filed a complaint.

The RTC held that TMBI and Manalastas were common carriers and had acted negligently.

ISSUE:

BMT is liable to TMBI for breach of their

contract of carriage.

RULING:

23. L.G. Foods Corp. v. Pagapong-Agraviador [G.R. No. 158995, September 26, 2006]

https://lawphil.net/judjuris/juri2006/sep2006/gr_158995_2006.html

https://lawyerly.ph/digest/ca7f7?user=573

https://pdfcoffee.com/15-lg-foods-v-pagapong-agraviador-pdf-free.html

FACTS:

Charles Vallereja, a 7-year old son of the spouses Florentino Vallejera and Theresa Vallejera, was hit by a
Ford Fiera van owned by LG Foods Corp, and driven by Vincent Yeneza. He died due as a result.

A case of Reckless Imprudence Resulting to Homicide was filed against Yeneza. He commited suicide
before the case was concluded. The criminal case was dismissed.

The spouses Vallejera filed a complaint for damages against LG Foods Corp. The company denied
liability claiming that they exercised the required due diligence in the selection and supervision of their
employees and filed a motion to dismiss.

The RTC ruled against LG Foods Corp. The CA also denied the certiorari. Hence this petition.
ISSUE:

Whether LG Foods Corporation is civilly liable for negligence/imprudence of its employee.

RULING:

The company is liable.

Under Article 2180 of the Civil Code, the liability of the employer is direct or immediate. It is not
conditioned upon prior recourse against the negligent employee and a prior showing of insolvency of
such employee.

Here, the complaint sufficiently alleged that the death of the couple's minor son was caused by the
negligent act of the petitioners' driver; and that the petitioners themselves were civilly liable for the
negligence of their driver for failing "to exercise the necessary diligence required of a good father of the
family in the selection and supervision of [their] employee, the driver, which diligence, if exercised,
would have prevented said accident."

24. Cancio, Jr. v. Isip, [G.R. No. 133978, November 12, 2002]

https://lawphil.net/judjuris/juri2002/nov2002/gr_133978_2002.html

https://lawyerly.ph/digest/cc9bf?user=7451

https://pdfcoffee.com/cancio-vs-isip-pdf-free.html

FACTS:

Jose Cancio, represented by Roberto Cancio, filed three cases of Violation of B.P. No. 22 and three cases
of Estafa against Emerenciana Isip for issuing checks without sufficient funds.

The Office of the Provincial Prosecutor dismissed Criminal Case No. 13356, for Violation of B.P. No. 22
covering check no. 25001151 on the ground that the check was deposited with the drawee bank after 90
days from the date of the check. The two other cases for Violation of B.P. No. 22 (Criminal Case No.
13359 and 13360) were filed with and subsequently dismissed by the Municipal Trial Court of Guagua,
Pampanga, Branch 1, on the ground of "failure to prosecute."

Meanwhile, the three cases for Estafa were filed with the RTC. After failing to present its second
witness, the prosecution moved to dismiss the estafa cases against Isip.

Cancio filed the instant case for collection of sum of money, Isip contended that Cancio should be held
in contempt of court for forum-shopping.

The trial court denied Cancio's motion for reconsideration, hence this instant petion.
ISSUE:

Whether the dismissal of the estafa cases against respondent bars the institution of a civil action for
collection of the value of the checks subject of the estafa cases; and 2) whether the filing of said civil
action violated the anti-forum-shopping rule.

FACTS:

The civil action can prosper.

The reservation for civil action was made by the prosecution on time. According to Section 1, Rule 111 of
the Rules on Criminal Procedure states that civil liability is deemed instituted with the criminal case
unless there is a reservation of the right to file a separate civil action. In the case at bar, the complaint is
clearly based on culpa contractual. The cause of action was the breach of the respondent’s breach of the
contractual obligation. Evidently, the petitioner was seeking to make good the value written on the
checks in exchange for cash. The case was not anchored the criminal aspect of estafa but on the civil
aspect of culpa contractual. As such, it is distinct and independent from the estafa case filed against the
offender and may proceed regardless of the result of the criminal proceedings.

25. Lim v. Kou Co Ping [G.R. Nos. 175256 & 179160, [August 23, 2012]

https://lawphil.net/judjuris/juri2012/aug2012/gr_175256_2012.html

https://jeffsarabusing.wordpress.com/2018/02/09/case-brief-lim-vs-kou-co-ping/

Read digest online

26. Rodriguez, Et. Al, vs. The Manila Railroad Company [G.R. No. L-15688, November 19, 1921]

https://lawphil.net/judjuris/juri1921/nov1921/gr_l-15688_1921.html

https://pdfcoffee.com/case-digest-torts-3rd-pdf-free.html

FACTS:

On January 29, 1918, as one of its trains passed over said line, a great quantity of sparks were emitted
from the smokestack of the locomotive, and fire was thereby communicated to four houses nearby
belonging to the four plaintiffs respectively, and the same were entirely consumed. All of these houses
were of light construction with the exception of the house of Remigio Rodrigueza, which was of strong
materials, though the roof was covered with nipa and cogon. The fire occurred immediately after the
passage of the train, and a strong wind was blowing at the time. It does not appear either in the
complaint or in the agreed statement whose house caught fire first, though it is stated in the appellant's
brief that the fire was first communicated to the house of Remigio Rodrigueza, from whence it spread to
the others.
The company was conspicuously negligent in relation to the origin of said fire, in the following respects,
namely, first, in failing to exercise proper supervision over the employees in charge of the locomotive;
secondly, in allowing the locomotive which emitted these sparks to be operated without having the
smokestack protected by some device for arresting sparks; thirdly, in using in its locomotive upon this
occasion Bataan coal, a fuel of known inferior quality which, upon combustion, produces sparks in great
quantity.

An action was instituted jointly by Remigio Rodrigueza and three others in the Court of First Instance of
the Province of Albay to recover a sum of money of the Manila Railroad Company as damages resulting
from a fire kindled by sparks from a locomotive engine.

The court endered judgment against the defendant company in favor of the plaintiffs and awarded to
them sums for damages.

The Company appealed citing that that the house of Remigio Rodrigueza stood partly within the limits of
the land owned by the defendant company, though exactly how far away from the company's track does
not appear. It further appears that, after the railroad track was laid, the company notified Rodrigueza to
get his house off the land of the company and to remove it from its exposed position. Rodrigueza did
not comply with this suggestion, though he promised to put an iron roof on his house, which he never
did.

ISSUE:

Whether or not the Railroad company is liable for the damages.

RULING:

The circumstance that Remigio Rodrigueza's house was partly on the property of the defendant
company and therefore in dangerous proximity to passing locomotives was an antecedent condition
that may in fact have made the disaster possible, but that circumstance cannot be imputed to him as
contributory negligence destructive of his right of action, because, first, that condition was not created
by himself; secondly, because his house remained on this ground by the toleration, and therefore with
the consent of the Railroad Company; and thirdly, because even supposing the house to be improperly
there, this fact would not justify the defendant in negligently destroying it.

The circumstance that the defendant company, upon planting its line near Remigio Rodrigueza's house,
had requested or directed him to remove it, did not convert his occupancy into a trespass, or impose
upon him any additional responsibility over and above what the law itself imposes in such situation. In
this connection it must be remembered that the company could at any time have removed said house in
the exercise of the power of eminent domain, but it elected not to do so.

27. Metro Manila Transit Corporation vs. Cuevas [G.R. No. 167797, June 15, 2015]

https://lawphil.net/judjuris/juri2015/jun2015/gr_167797_2015.html
https://lawyerly.ph/digest/ced6b?user=1170

https://allthingslegalandfun.wordpress.com/2016/01/25/metro-manila-transit-corp-vs-cuevas/

Read digest online

Nature and Effects of Obligations

Art. 1163. Every person obliged to give something is also obliged to take care of it with the proper
diligence of a good father of a family, unless the law or the stipulation of the parties requires another
standard of care. (1094a)

Real vs Actual Delivery

-actual placing of possession to the oblige

-no actual transfer but due to some acts done, there has already been delivert

Ex:

Traditio Instrumental – public document

Traditio Symbolica – keys to the house

Traditio Longa manu – point object to the buyer

Traditio Brevi manu -vendee is in possession of the property

Quasi – delivery – cannot be seen or touch, can just be certificate

Concept of Father taking care of the family

-only applicable to determinate objects

1. Repide vs. Afzelius [G.R. No. L-13438, November 20, 1918]

2. Bunge Corporation vs. Camenforte and Company [G.R. No. L-4440, August 29, 1952]

3. Norkis vs. CA and Nepales [G.R. No. 91029, February 7, 1991]

4. Co vs. CA and Broadway Motor Sales Corporation [G.R. No. 124922, June 22, 1998]

5. Cruzado vs. Bustos and Escaler [G.R. No. L-10244, February 29, 1916]

6. Gonzalez and Gomez vs. Haberer [G.R. No. L-22604, February 3, 1925]

Accessory Obligations in Real Obligations

1. Equatorial Realty Development and Carmelo & Bauermann, Inc. vs. Mayfair [G.R. NO. 106063,
November 21, 1996]
2. Roman Cahtolic Bishop of Jaro vs. Gregorio Dela Pena [G.R. No. L-6913, November 21, 1913]

===========================End of 2/24======================

3. Equatorial Realty vs. Mayfair [G.R. No. 133879, November 21, 2001]

Obligations to do

1. Pascua vs. G&G Real TV Corporation [G.R. No 196383, October 15, 2012]

2. Fajardo vs. Freedom to Build, Inc. [G.R. No. 134692, August 1, 2000]

Breach in the Performance of Obligations

1. Spouses Quisumbing vs. MERALCO [G.R. No. 142943, April 3, 2002]

2. Samar II Electric Cooperative, Inc. and Dacula vs. Quijano [G.R. No. 144474, April 27, 2007]

3. Orient Freight International, Inc. v. Keihin-Everett Forwarding Co., Inc., [G.R. No. 191937, August 9,
2017]

4. Valenzuela Hardwood and Inustrial Supply vs. CA and Seven Borthers Shipping Corporation [G.R.
No. 102316, June 30, 1997]

5. Heirs of Eduardo Manlapat vs. Court of Appeals [G.R. No. 125585, June 08, 2005]

6. RCPI vs. Verchez [G.R. No. 164349, January 31, 2006]

7. R.S. Tomas, Inc. vs. Rizal Cement Company, Inc. [G.R. No. 1731555, March 21, 2012]

8. Spouses Bonrostro vs. Spouses Luna [G.R. No. 172346, July 24, 2013]

9. Cruz and Ibias vs. Atty. Gruspe [G.R. No 191431, March 13, 2013]

10. DBP vs. Guarina Agricutlural [G.R. No. 160758, January 15, 2014]

11. University of Mindanao vs. Bangko Sentral ng Pilipinas [January 11, 2016, G.R. No. 194964-65]

12. Solar Harvest Incorporated vs. Davao Corrugated Carton Corporation [G.R. No. 176686, July 26,
2010]

13. SBMA vs. CCA and SIHC [G.R. No. 192885, July 4, 2012]

14. Consolidted Industrial Gases, Inc. vs. Alabang Medical Center [G.R. No. 181983, November 13,
2013]

15. BF Corp. v. Werdenberg International Corp., [G.R. No. 174387, December 9, 2015]

========= End of 1st Versrion=======

Fortuitous Events

1. Hernandez vs. Honorable Chairman [G.R. No. 71871, November 6, 1989]

https://lawphil.net/judjuris/juri1989/nov1989/gr_71871_1989.html

FACTS:

Teodoro M. Hernandez was the officer-in-charge and special disbursing officer of the Ternate Beach
Project of the Philippine Tourism Authority in Cavite encashed two checks covering the wages of the
employees and the operating expenses. The checks were delayed and completed by 3PM. He decided to
bring the money back to his home and leave for Ternate the following morning because of the delay.
During his bus ride home, 2 armed men boarded the bus and took off with the money. He was injured
when he attempted to fight off the assailant's and resulted in one of culprit's, Alvarez to be
apprehended. The money, however, was not recovered.

Hernandez filed a request for relief from money accountability, but was denied.

ISSUE:

Whether or not Hernandez should be held accountable for the stolen money.

RULING:

No, Hernandez should not be held liable for the stolen money.

Section 638 of the Revised Administrative Code reads as follows:

Section 638. Credit for loss occurring in transit or due to casualty — Notice to Auditor. — When a loss of
government funds or property occurs while the same is in transit or is caused by fire, theft, or other
casualty, the officer accountable therefor or having custody thereof shall immediately notify the Auditor
General, or the provincial auditor, according as a matter is within the original jurisdiction of the one or
the other, and within thirty days or such longer period as the Auditor, or provincial auditor, may in the
particular case allow, shall present his application for relief, with the available evidence in support
thereof. An officer who fails to comply with this requirement shall not be relieved of liability or allowed
credit for any such loss in the settlement of his accounts.
In the case at bar, Hernandez moved only by the best of motives when he encashed the check so he
could collect their salaries, which he did so on a non working day, and any delay would have resulted in
a 5-day wait for the payment of the said salaries and wages.

This was undoubtedly a fortuitous event covered by the said provisions, something that could not have
been reasonably foreseen although it could have happened, and did.

2. Metro Concast Steel Corp., Et Al. vs Allied Bank Corporation [G.R. No. 177921, December 4, 2013]

https://lawphil.net/judjuris/juri2013/dec2013/gr_177921_2013.html

https://thefunsizedintrovert.wordpress.com/2019/02/22/metro-concast-steel-corporation-vs-allied-
bank-corporation-g-r-no-177921-december-4-2013/

FACTS:

On various dates and for different amounts, Metro Concast obtained several loans from Allied Bank. By
way of security, the individual Metro Concast executed several Continuing Guaranty/Comprehensive
Surety Agreements. Metro Concast failed to settle their obligations after a promissory note, to which
Allied Bank send in demand letters. When these were not fulfilled, Allied Bank was prompted to file a
complaint for collection of sum of money.

Metro Concast offered their equipment for sale to pay for the obligations, but had no takers and had to
be reduced to scrap metal. Also citing that due to the economic suffering in 1998 the business failed.

In 2002, Peakstar Oil Corp expressed interest in buying the scrap metal. Unfortunately, Peakstar
defaulted on all its obligations under the MoA and regarded that their failure to pay their outstanding
loan obligations to Allied Bank must be considered as force majeure, and therefore extinguished.

ISSUE:

Whether or not the loan obligations incurred by the petitioners under the subject promissory note and
various trust receipts have already been extinguished.

RULING:

No. The loan obligation was not extinguished.

Article 1231 of the Civil Code states that obligations are extinguished either by payment or performance,
the loss of the thing due, the condonation or remission of the debt, the confusion or merger of the
rights of creditor and debtor, compensation or novation.

In the case at bar, fortuitous events by definition are extraordinary events not foreseeable or avoidable.
Peakstar’s breach of the MoA may have been unforseen by them, however it does not show that they
are impossible to pay the loan.

3. Fil-Estate Properties, Inc. and File Estate Network, Inc. vs. Spouses Ronquillo [G.R. NO. 185798,
JANUARY 13, 2014]

https://lawphil.net/judjuris/juri2014/jan2014/gr_185798_2014.html#fnt2

https://www.projectjurisprudence.com/2018/06/case-digest-fil-estate-vs-spouses.html

http://lawtechworld.com/blog/blog/2014/07/case-digest-fil-estate-properties-vs-spouses-ronquillo/

FACTS:

Fil-Estate Properties, Inc. is the owner and developer of the Central Park Place Tower, while Fil-Estate
Network, Inc. is its authorized marketing agent. Spouses Ronquillo purchased a unit in the tower, who
then executed and signed a Reservation Application Agreement and paid a deposit as a reservation fee.
They then paid the full downpayment and paid the monthly amortizations until 1998.

They stopped paying after the learned that construction has stopped.

Spouses Ronquillo demanded a full refund of their payment with interest. When it was not answered,
they filed a Complaint for Refund and Damages before the Housing and Land Use Regulatory Board for
reimbursement/refund and other cost and an Order of Default was issued.

Fil-Estate filed a motion to lift order of default and attached their position paper attributing the delay in
construction to the 1997 Asian financial crisis, stating that they did not commit fraud or
misrepresentation which could entitle respondents to an award of moral damages. HLURB rendered
judgment and awared Spouses Ronquillo costs and damages.

ISSUE:

Whether or not the Asian financial crisis constitute a fortuitous event which would justify delay by
petitioners in the performance of their contractual obligation.

RULING:
The Asian financial crisis was not a fortuitous event.

Article 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him.

The injured party may choose between the fulfillment and the rescission of the obligation, with payment
of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter
should become impossible.
The rulings were consistent that first, the Asian financial crisis is not a fortuitous event that would
excuse the company from performing their contractual obligation.

The breach of contract entitled Spouses Ronquillo to rescind the contract and to be refunded the
amount of amortizations paid including interest and damages.

4. Philippine Realty and Holding Corp. vs. Ley Const. and Devl. [G.R. No. 165548/G.R. No. 167879, June
13, 2011]

https://www.projectjurisprudence.com/2018/06/case-digest-philippine-realty-vs-ley.html

https://lawphil.net/judjuris/juri2011/jun2011/gr_165548_2011.html

FACTS:

Ley Construction and Development Corporation (LCDC) was the project contractor for the construction
of several buildings for Philippine Realty & Holdings Corporation (PRHC), the project owner. Engineer
Dennis Abcede (Abcede) was the project construction manager of PRHC, while Joselito Santos (Santos)
was its general manager and vice-president for operations.

The two corporations entered into four major construction projects, evidenced by four duly notarized
"construction agreements." LCDC committed itself to the construction of the buildings needed by PRHC,
which in turn committed itself to pay the contract price agreed upon.

The terms embodied in the afore-listed construction agreements were almost identical. Each agreement
provided for a fixed price to be paid by PRHC for every project.

Additional escalation agreements were sent out but was not given a reply.

In the course of the construction, delays occured and it seemed that LCDC would not be able to finish
the project within the agreed period. LCDC explained that the unanticipated delay in construction was
due mainly to the sudden, unexpected hike in the prices of cement and other construction materials. It
claimed that, without a corresponding increase in the fixed prices found in the agreements, it would be
impossible for it to finish the construction.

In their analysis, it showed that even if the balance were to be collected by LCDC, it would still not be
sufficient to purcahse the materials needed.

Seeking to recover all the above-mentioned amounts, LCDC filed a Complaint with Application for the
Issuance of a Writ of Preliminary Attachment.

ISSUE:

Whether or not LCDC is not liable for liquidated damages for delay in the construction of the buildings
for PRHC.

RULING:
No, they are not liable.

Article 1174 of the Civil Code provides: "Except in cases expressly specified by the law, or when it is
otherwise declared by stipulation or when the nature of the obligation requires the assumption of risk,
no person shall be responsible for those events which could not be foreseen, or which though foreseen,
were inevitable." A perusal of the construction agreements shows that the parties never agreed to make
LCDC liable even in cases offorce majeure. Neither was the assumption of risk required. Thus, in the
occurrence of events that could not be foreseen, or though foreseen were inevitable, neither party
should be held responsible.

There is no question that LCDC was not able to fully construct the Tektite Building and Projects 1, 2, and
3 on time. It reasons that it should not be made liable for liquidated damages, because its rightful and
reasonable requests for time extension were denied by PRHC.

The practice of the parties is that each time LCDC requests for more time, an extension agreement is
executed and signed by both parties to indicate their joint approval of the number of days of extension
agreed upon.

Further, PRHC is barred by the doctrine of promissory estoppel from denying that it agreed, and even
promised, to hold LCDC free and clear of any liquidated damages.

5. Alberta Yubido vs. CA [GR No. 113033, October 17, 1997]

https://lawphil.net/judjuris/juri1997/oct1997/gr_113003_1997.html

https://lawreviewhurjaelubag.wordpress.com/2017/01/26/yobido-v-court-of-appeals-281-scra-1-g-r-
no-113003-october-17-1997/

https://lawyerly.ph/juris/view/c89d5

https://emirvmendoza.wordpress.com/2017/02/20/case-digest-yobido-v-ca-g-r-no-113003-october-
17-1997/

FACTS:

Spouses Tumboy, along with their minor children, boarded a Yobido Liner bus bound for Davao City.
During their travel, the left front tire of the bus exploded and the bus fell into a ravine.

The incident resulted in the death of 28-year-old Tito Tumboy and physical injuries to other passengers.

A complaint for breach of contract of carriage, damages and attorney's fees was filed against the bus
owner. The widowed Tumboy claims the driver's failure to exercise the diligence required when the bus
was full of passengers had cargoes on top.

The defendants raised that it was of caso fortuito. They claim that they had done the necessary steps to
ensure the competence of their driver and vehicles.

The complaint was dismissed, but Tumboy appealed. The Court of Appeals rendered judgement of the
court a quo is set aside and that Tumboy be paid for damages. Hence this petition.
ISSUE:

Whether or not the explosion of a newly installed tire of a passenger vehicle is a fortuitous event that
exempts the carrier from liability for the death of a passenger.

RULING:

No, they are not exempt from liability.

When a passenger is injured or dies while travelling, the law presumes that the common carrier is
negligent. Thus, the Civil Code provides:

Art. 1756. In case of death or injuries to passengers, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary diligence as
prescribed in articles 1733 and 1755.

In the case at bar, the explosion of the new tire may not be considered a fortuitous event.

There are human factors involved in the situation. The fact that the tire was new did not imply that it
was entirely free from manufacturing defects or that it was properly mounted on the vehicle. Neither
may the fact that the tire bought and used in the vehicle is of a brand name noted for quality, resulting
in the conclusion that it could not explode within five days' use. Be that as it may, it is settled that an
accident caused either by defects in the automobile or through the negligence of its driver is not a caso
fortuito that would exempt the carrier from liability for damages.

The common carrier must still prove that it was not negligent in causing the death or injury resulting
from an accident.

6. Virginia Real vs. Sisenando H. Belo [G.R. NO. 146224, January 26, 2007]

https://lawphil.net/judjuris/juri2007/jan2007/gr_146224_2007.html

https://lawyerly.ph/digest/c9f4f?user=4737

https://pdfcoffee.com/2-real-vs-belo-pdf-free.html

FACTS:

Viginia Real owned and operated the Wasabe Fastfood stall located at the Food Center of the Philippine
Women's University (PWU). A fire broke out at petitioner's Wasabe Fastfood stall, which spread to other
stalls. It was revealed that the fire broke out due to the leaking fumes of LPG from Real's stall.

For the loss of his fastfood stall due to the fire, respondent demanded compensation from petitioner
and filed a complaint for damages.

The MeTC ruled in favor of Belo and awarded him damages, to which Real appealed.
ISSUE:

Whether the herein petitioner could be held liable for damages as a result of the fire that razed not only
her own food kiosk but also the adjacent foodstalls at the Food Center premises of the Philippine
Women's University, including that of Belo?

RULING:

Real is liable for the damages.

Article 1174 of the Civil Code provides that no person shall be responsible for a fortuitous event which
could not be foreseen, or which, though foreseen, was inevitable. In other words, there must be an
entire exclusion of human agency from the cause of injury or loss.

It is established by evidence that the fire originated from leaking fumes from the LPG stove and tank
installed at petitioner's fastfood stall and her employees failed to prevent the fire from spreading and
destroying the other fastfood stalls, including respondent's fastfood stall. Such circumstances do not
support petitioner's theory of fortuitous event.

Real failed to show that she submitted proof that the LPG stove and tank in her fastfood stall were
maintained in good condition and periodically checked for defects but she also failed to submit proof
that she exercised the diligence of a good father of a family in the selection and supervision of her
employees. For failing to prove care and diligence in the maintenance of her cooking equipment and in
the selection and supervision of her employees, the necessary inference was that petitioner had been
negligent.

7. GAISANO CAGAYAN, INC. vs. INSURANCE COMPANY OF NORTH AMERICA (G.R. No. 147839, June 8,
2006)

https://lawphil.net/judjuris/juri2006/jun2006/gr_147839_2006.html

https://legalopinion854088452.wordpress.com/2019/08/05/gaisano-cagayan-inc-v-insurance-company-
of-north-america-g-r-no-147839-june-8-2006-523-phil-677-694/

http://thedigester.blogspot.com/2012/07/gaisano-v-insurance-gr-no-147839-june-8.html

https://lawyerly.ph/digest/ca1c4?user=4984

FACTS:

Intercapitol Marketing Corporation (IMC) is the maker of Wrangler Blue Jeans. Levi Strauss (Phils.) Inc.
(LSPI) is the local distributor of products bearing trademarks owned by Levi Strauss & Co.. IMC and LSPI
separately obtained from respondent fire insurance policies with book debt endorsements. The
insurance policies provide for coverage on "book debts in connection with ready-made clothing
materials which have been sold or delivered to various customers and dealers of the Insured anywhere
in the Philippines."
The policies defined book debts as the "unpaid account still appearing in the Book of Account of the
Insured 45 days after the time of the loss covered under this Policy."

It provides that the Company shall not be liable for any unpaid account in respect of the merchandise
sold and delivered by the Insured which are outstanding at the date of loss for a period in excess of six
(6) months from the date of the covering invoice or actual delivery of the merchandise whichever shall
first occur and that the Insured shall submit to the Company within twelve (12) days after the close of
every calendar month all amount shown in their books of accounts as unpaid and thus become
receivable item from their customers and dealers.

A fire broke out in the department store and the items lost or destroyed in the fire were stocks of ready-
made clothing materials sold and delivered by IMC and LSPI.

A complaint for damages was filed against Gaisano. Gaisano answered that it could not be held liable
because the property covered by the insurance policies were destroyed due to fortuities event or force
majeure.

The RTC dismissed the complaint and was an appeal was denied by the CA, hence this petition.

ISSUE:

Whether or not CA erred in construing a fire insurance policy on book debts as one covering the unpaid
accounts of IMC and LSPI since such insurance applies to loss of the ready-made clothing materials sold
and delivered to petitioner.

RULING:

No, the CA did not err in their decision.

ART. 1504. Unless otherwise agreed, the goods remain at the seller's risk until the ownership therein is
transferred to the buyer, but when the ownership therein is transferred to the buyer the goods are at
the buyer's risk whether actual delivery has been made or not, except that:

(1) Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in pursuance of
the contract and the ownership in the goods has been retained by the seller merely to secure
performance by the buyer of his obligations under the contract, the goods are at the buyer's risk from
the time of such delivery; (Emphasis supplied)

Thus, when the seller retains ownership only to insure that the buyer will pay its debt, the risk of loss is
borne by the buyer. Accordingly, petitioner bears the risk of loss of the goods delivered.

Is petitioner liable for the unpaid accounts?

Yes, they are liable. petitioner bears the loss under Article 1504 (1) of the Civil Code.
Thus, whether fire is a fortuitous event or petitioner was negligent are matters immaterial to this case.
What is relevant here is whether it has been established that petitioner has outstanding accounts with
IMC and LSPI.

Usurious Transacations

1. Gozales-Saldana vs. Spouses Niamatali [G.R. NO. 226587, November 21, 2018]

https://www.lawyerly.ph/juris/view/cfcd8?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09

https://pdfcoffee.com/agency-digest-2-pdf-free.html

2. Nacar vs. Gallery Frames [G.R. No. 189871, August 13, 2013]

https://lawphil.net/judjuris/juri2013/aug2013/gr_189871_2013.html

https://www.projectjurisprudence.com/2018/06/case-digest-nacar-v-gallery-frames.html

Rights of Creditors

(Artilcle 1176)

1. Rizal Commercial Banking Corporation vs. Buenaventura (G.R. No. 1764789, October 6, 2010)

https://lawphil.net/judjuris/juri1950/jul1950/gr_l-2478_1950.html

(Article 1177)

1. Siguan vs. Lim (G.R. No. 134685, November 18, 1999)

https://lawphil.net/judjuris/juri1999/nov1999/gr_134685_1999.html

https://lawreviewhurjaelubag.wordpress.com/2017/01/30/siguan-v-lim-318-scra-725-g-r-no-134685-
november-19-1999/

2. UPSUMCO vs. CA, PNB, and APT (G.R. No. 126890, July 11, 2007)

3. UPSUMCO vs. CA, PNB, and APT (G.R. No 126890, March 9, 2010)