E-SCRA

I. OBLIGATIONS:
A. Definition
● Makati Stck exchange, Inc. v. Campos, G.R. No. 138814, April 16, 2009
Actions; Causes of Action; Obligations; Motion to Dismiss; If a defendant moves to
dismiss the complaint on the ground of lack of cause of action, he is regarded as having
hypothetically admitted all the averments thereof.—A cause of action is the act or
omission by which a party violates a right of another. A complaint states a cause of action
where it contains three essential elements of a cause of action, namely: (1) the legal right
of the plaintiff, (2) the correlative obligation of the defendant, and (3) the act or omission
of the defendant in violation of said legal right. If these elements are absent, the
complaint becomes vulnerable to dismissal on the ground of failure to state a cause of
action. If a defendant moves to dismiss the complaint on the ground of lack of cause of
action, he is regarded as having hypothetically admitted all the averments thereof. The
test of sufficiency of the facts found in a complaint as constituting a cause of action is
whether or not admitting the facts alleged, the court can render a valid judgment upon
the same in accordance with the prayer thereof. The hypothetical admission extends to
the relevant and material facts well pleaded in the complaint and inferences fairly
deducible therefrom. Hence, if the allegations in the complaint furnish sufficient basis by
which the complaint can be maintained, the same should not be dismissed regardless of
the defense that may be assessed by the defendant. Makati Stock Exchange, Inc. vs.
Campos, 585 SCRA 120, G.R. No. 138814 April 16, 2009

● Ang Yu Asuncion v. CA, G.R. No. 109125., December 2, 1994

ANG YU ASUNCION, ARTHUR GO AND KEH TIONG, petitioners, vs. THE HON.
COURT OF APPEALS and BUEN REALTY DEVELOPMENT CORPORATION,
respondents.

Obligations; Essential elements of an obligation.—An obligation is a juridical necessity to

give, to do or not to do (Art. 1156, Civil Code). The obligation is constituted upon the
concurrence of the essential elements thereof, viz: (a) The vinculum juris or juridical tie
which is the efficient cause established by the various sources of obligations (law,
contracts, quasi-contracts, delicts and quasi-delicts); (b) the object which is the
prestation or conduct, required to be observed (to give, to do or not to do); and (c) the
subject-persons who, viewed from the demandability of the obligation, are the active
(obligee) and the passive (obligor) subjects.

Same; Contracts; Various stages of a contract.—Among the sources of an obligation is a

contract (Art. 1157, Civil Code), which is a meeting of minds between two persons
whereby one binds himself, with respect to the other, to give something or to render
some service (Art. 1305, Civil Code). A contract undergoes various stages that include its
negotiation or preparation, its perfection, and, finally, its consummation. Negotiation
covers the period from the time the prospective contracting parties indicate interest in
the contract to the time the contract is concluded (perfected). The perfection of the
contract takes place upon the concurrence of the essential elements thereof. A contract
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

which is consensual as to perfection is so established upon a mere meeting of minds, i.e.,

the concurrence of offer and acceptance, on the object and on the cause thereof. A
contract which requires, in addition to the above, the delivery of the object of the
agreement, as in a pledge or commodatum, is commonly referred to as a real contract. In
a solemn contract, compliance with certain formalities prescribed by law, such as in a
donation of real property, is essential in order to make the act valid, the prescribed form
being thereby an essential element thereof. The stage of consummation begins when the
parties perform their respective undertakings under the contract culminating in the
extinguishment thereof. Ang Yu Asuncion vs. Court of Appeals, 238 SCRA 602, G.R. No.
109125 December 2, 1994

● PSBA, et al; v. CA, et al., G.R. No. 84698, Feb. 4, 1992

G.R. No. 84698. February 4,1992.*

PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION, JUAN D. LIM, BENJAMIN

P. PAULINO, ANTONIO M. MAGTALAS, COL. PEDRO SACRO, AND LT. M. SORIANO,
petitioners, vs. COURT OF APPEALS, HON. REGINA ORDOÑEZ-BENITEZ, in her
capacity as Presiding Judge of Branch 47, Regional Trial Court, Manila, SEGUNDA R.
BAUTISTA, and ARSENIA D. BAUTISTA, respondents.
Civil Law; Quasi-Delicts; Article 2180 of the Civil Code provides that the damage should
have been caused by pupils or students of the educational institution.—Article 2180, in
conjunction with Article 2176 of the Civil Code, establishes the rule of in loco parentis.
This Court discussed this doctrine in the afore-cited cases of Exconde, Mendoza, Palisoc,
and, more recently, in Amadora vs. Court of Appeals. In all such cases, it had been
stressed that the law (Article 2180) plainly provides that the damage should have been
caused or inflicted by pupils or students of the educational institution sought to be held
liable for the acts of its pupils or students while in its custody. However, this material
situation does not exist in the present case for, as earlier indicated, the assailants of
Carlitos were not students of the PSBA, for whose acts the school could be made liable.

Same; Contracts; An academic institution enters into a contract when it accepts students
for enrollment; The contract between the school and student is one "imbued with the
public interest".—Institutions of learning must also meet the implicit or "built-in"
obligation of providing their students with an atmosphere that promotes or assists in
attaining its primary undertaking of imparting knowledge. Certainly, no student can
absorb the intricacies of physics or higher mathematics or explore the realm of the arts
and other sciences when bullets are flying or grenades exploding in the air or where there
looms around the school premises a constant threat to life and limb. Necessarily, the
school must ensure that adequate steps are taken to maintain peace and order within the
campus premises and to prevent the breakdown thereof.

B. Sources
● Swedish East Asia Co. v. Manila Port Service, 25 SCRA 639
No. L-26332. October 26, 1968.

OBLIGATIONS AND CONTRACTS : Group 2

DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

THE SWEDISH EAST ASIA Co., LTD., petitioner, vs. MANILA PORT SERVICE
AND/OR MANILA RAILROAD COMPANY, respondents.

Arrastre service; Management contract; When third parties are bound thereby; Case at
bar.—True it is that this Court has held in a number of cases that it is not only the parties
to a management contract that are bound thereby, but also third parties who have
availed themselves of the services 01 the arrastre operator, taking delivery therefrom in
pursuance of a permit and a pass issued by the latter (Northern Motors, Inc. v. Prince
Line, et al., L-13884, Feb. 29, 1960; Mendoza v. Phil. Air Lines, Inc L-3678, Feb. 29,
1962; Freixas & Co. v. Pacific Mail Steamship' Co., 42 Phil. 199; GSIS v. MRR, et al.,
L-13276, Feb. 25, 1961). The disparate facts of the present case, however, do not warrant
the application of this doctrine. For it is not disputed that the petitioner had no intention
of availing itself of the services of the Manila Port Service, nor did it seek to derive
benefit therefrom, in so far as the cargo in question is concerned. On the contrary, its
intention was to have the sixteen bundles discharged in Hongkong, pursuant to its
contract with the consignee, the Welmore Trading Co., to deliver the cargo to that place.
Discharge of the goods in Manila was made through mistake, in good faith.

The petitioner not being bound by the management contract either as a party thereto or
as one who has taken advantage of the provisions thereof, it follows that its right to bring
an action to recover the value of the missing goods can not be limited by the
pre-conditions as to time set forth in the said management contract.

Same; Delivery of goods by mistake; Obligation to return; Case at bar.—In the case at
bar, the respondents who had no right to the sixteen bundles delivered to them by
mistake, had actually received them, thereby giving rise to an obligation on their part to
return them to the one who delivered them by mistake, which, by virtue of this
circumstance, acquired the character of a creditor of the receiver, remaining at the same
time answerable to the consignee thereof. It results that the petitioner having acquired
the right to demand in its own capacity the return of the shipment delivered by mistake
to the respondents, this Court may grant relief to it not as subrogee of the consignee, but
as creditor in its own right, in which capacity the petitioner has brought this action as
shown by the allegations of the complaint considered as a whole.

Same; Action for recovery of value of missing goods delivered by mistake; Prescriptive
period of action upon an injury to property rights; Case at bar.—The complaint in the
case at bar having been filed on March 13, 1961, less than four years from the date the
petitioner's right of action accrued, that is, from December 3, 1957, when the missing
cargo was admittedly landed unto the custody of the defendants, the action of the
petitioner has not prescribed, whether we apply article 1146 of the new Civil Code which
provides for a prescriptive period of four years for an action "upon an injury to the rights
of the plaintiff," or article 1149 of the same Code which provides that "all other actions
whose periods are not fixed in this Code or in other laws must be brought within five
years from the time the right of action accrues."

OBLIGATIONS AND CONTRACTS : Group 2

DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

● Power Commercial & Industrial Corp. v. CA 274 SCRA 597

G.R. No. 119745. June 20, 1997.*

POWER COMMERCIAL AND INDUSTRIAL CORPORATION, petitioner, vs. COURT OF

APPEALS, SPOUSES REYNALDO, and ANGELITA R. QUIAMBAO and PHILIPPINE
NATIONAL BANK, respondents.

Civil Law; Obligations and Contracts; Sales; Any obscurity in a contract must be
construed against the party who caused it.—By his own admission, Anthony Powers,
General Manager of petitioner-corporation, did not ask the corporation’s lawyers to
stipulate in the contract that Respondent Reynaldo was guaranteeing the ejectment of
the occupants, because there was already a proviso in said deed of sale that the sellers
were guaranteeing the peaceful possession by the buyer of the land in question. Any
obscurity in a contract, if the above-quoted provision can be so described, must be
construed against the party who caused it. Petitioner itself caused the obscurity because
it omitted this alleged condition when its lawyer drafted said contract.

● UP v. Philab Industries, Inc., G.R. No. 152411, September 29, 2004

G.R. No. 152411. September 29, 2004.*

UNIVERSITY OF THE PHILIPPINES, petitioner,

vs. PHILAB INDUSTRIES, INC., respondent.

Remedial Law; Appeals; The doctrinal rule is that pure questions of facts may not be the
subject of an appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as
this mode of appeal is generally restricted to questions of law—however, this rule is not
absolute—the Court may review the factual findings of the Court of Appeals should they
be contrary to those of the trial court; Correspondingly, this Court may review findings of
facts when the judgment of the Court of Appeals is premised on a misapprehension of
facts.—The doctrinal rule is that pure questions of facts may not be the subject of an
appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as this mode of
appeal is generally restricted to questions of law. However, this rule is not absolute. The
Court may review the factual findings of the CA should they be contrary to those of the
trial court. Correspondingly, this Court may review findings of facts when the judgment
of the CA is premised on a misapprehension of facts.

Contracts; Parties to a Contract; There is no dispute that the respondent is not privy to
the Memorandum of Agreement (MOA) executed by the petitioner and Ferdinand E.
Marcos Foundation (FEMF), hence it is not bound by the said agreement; Contracts take
effect only between the parties and their assigns; A contract cannot be binding upon and
cannot be enforced against one who is not a party to it, even if he is aware of such
contract and has acted with knowledge thereof.—Contracts take effect only between the
parties and their assigns. A contract cannot be binding upon and cannot be enforced
against one who is not a party to it, even if he is aware of such contract and has acted
with knowledge thereof. Likewise admitted by the parties, is the fact that there was no
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

written contract executed by the petitioner, the respondent, and FEMF relating to the
fabrication and delivery of office and laboratory furniture to the BIOTECH. Even the CA
failed to specifically declare that the petitioner and the respondent entered into a
contract of sale over the said laboratory furniture. The parties are in accord that the
FEMF had remitted to the respondent partial payments via checks drawn and issued by
the FEMF to the respondent, through Padolina, in the total amount of P2,288,573.74 out
of the total cost of the project of P2,934,068.90 and that the respondent received the said
checks and issued receipts therefor to the FEMF. There is also no controversy that the
petitioner did not pay a single centavo for the said furniture delivered by the respondent
that the petitioner had been using ever since.

Same; Implied-in-Fact Contracts; A contract implied-in-fact is one implied from facts

and circumstances showing as mutual intention to contract—it arises where the intention
of the parties is not expressed, but an agreement in fact creating an obligation; An
implied-in-fact contract will not arise unless the meeting of minds is indicated by some
intelligent conduct, act, or sign.—A contract implied in fact is one implied from facts and
circumstances showing a mutual intention to contract. It arises where the intention of
the parties is not expressed, but an agreement in fact creating an obligation. It is a
contract, the existence and terms of which are manifested by conduct and not by direct
or explicit words between parties but is to be deduced from conduct of the parties,
language used, or things done by them, or other pertinent circumstances attending the
transaction. To create contracts implied in fact, circumstances must warrant the
inference that one expected compensation and the other to pay. An implied-in-fact
contract requires the parties’ intent to enter into a contract; it is a true contract. The
conduct of the parties is to be viewed as a reasonable man would view it, to determine
the existence or not of an implied-in-fact contract. The totality of the acts/conducts of
the parties must be considered to determine their intention. An implied-in-fact contract
will not arise unless the meeting of minds is indicated by some intelligent conduct, act or
sign.

Same; Principle of “Solutio Indebiti”; Unjust enrichment claims do not lie simply
because one party benefits from the efforts or obligations of others, but instead must be
shown that a party was unjustly enriched in the sense that the term unjustly could mean
illegally or unlawfully.—Unjust enrichment claims do not lie simply because one party
benefits from the efforts or obligations of others, but instead it must be shown that a
party was unjustly enriched in the sense that the term unjustly could mean illegally or
unlawfully.

Same; Restitution or “Accion In Rem Verso”; In order that an “accion in rem verso” may
prosper, the essential elements must be present: (1) that the defendant has been
enriched, (2) that plaintiff has suffered a loss, (3) that the enrichment of the defendant is
without just or legal ground, (4) and that plaintiff has no other action based on contract,
quasi-contract, crime or quasi-delict.—In order that accion in rem verso may prosper,
the essential elements must be present: (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
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

or legal ground, and (4) that the plaintiff has no other action based on contract,
quasi-contract, crime or quasi-delict. An accion in rem verso is considered merely an
auxiliary action, available only when there is no other remedy on contract,
quasi-contract, crime, and quasi-delict. If there is an obtainable action under any other
institution of positive law, that action must be resorted to, and the principle of accion in
rem verso will not lie.

● Occena v. Icamina, 181 SCRA 328

G.R. No. 82146. January 22, 1990.*

EULOGIO OCCENA, petitioner, vs. HON. PEDRO M. ICAMINA, Presiding Judge,

Branch X of the Regional Trial Court, Sixth Judicial Region, San Jose, Antique; THE
PEOPLE OF THE PHILIPPINES, represented by the Honorable Provincial Fiscal of
Antique; and CRISTINA VEGAFRIA, respondents.

Criminal Procedure; Appeal; Two (2) appeals may be taken from a judgment of
conviction; Private respondent’s theory that in actively intervening in the criminal
action, petitioner waived his right to appeal from the decision that may be rendered
therein is incorrect and inaccurate.—In the case of People vs. Coloma, 105 Phil. 1287, we
categorically stated that from a judgment convicting the accused, two (2) appeals may,
accordingly, be taken. The accused may seek a review of said judgment, as regards both
civil and criminal actions; while the complainant may appeal with respect only to the
civil action, either because the lower court has refused to award damages or because the
award made is unsatisfactory to him. The right of either to appeal or not to appeal in the
event of the conviction of the accused is not dependent upon the other. Thus, the private
respondent’s theory that in actively intervening in the criminal action, the petitioner
waived his right to appeal from the decision that may be rendered therein, is incorrect
and inaccurate. Petitioner may, as he did, appeal from the decision on the civil aspect
which is deemed instituted with the criminal action and such appeal, timely taken,
prevents the decision on the civil liability from attaining finality.

Criminal Law; Damages; Dual character of a crime; What gives rise to the civil liability is
really the obligation of everyone to repair or to make whole the damage caused to
another by reason of his act or omission, whether done intentionally or negligently and
whether or not punishable by law.—Underlying the legal principle that a person who is
criminally liable is also civilly liable is the view that from the standpoint of its effects, a
crime has a dual character: (1) as an offense against the state because of the disturbance
of the social order; and as (2) an offense against the private person injured by the crime
unless it involves the crime of treason, rebellion, espionage, contempt, and others
wherein no civil liability arises on the part of the offender either because there are no
damages to be compensated or there is no private person injured by the crime. In the
ultimate analysis, what gives rise to civil liability is really the obligation of everyone to
repair or to make whole the damage caused to another by reason of his act or omission,
whether done intentionally or negligently and whether or not punishable by law.

OBLIGATIONS AND CONTRACTS : Group 2

DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

Same; Same; Same; The offense of which private respondent was found guilty is not one
of those felonies where no civil liability results because either there is no offended party
or no damage was caused to a private person.—In the case at bar, private respondent was
found guilty of slight oral defamation and sentenced to a fine of P50.00 with subsidiary
imprisonment in case of insolvency, but no civil liability arising from the felonious act of
the accused was adjudged. This is erroneous. As a general rule, a person who is found to
be criminally liable offends two (2) entities: the state or society in which he lives and the
individual member of the society or private person who was injured or damaged by the
punishable act or omission. The offense of which a private respondent was found guilty is
not one of those felonies where no civil liability results because either there is no
offended party or no damage was caused to a private person. There is here an offended
party, whose main contention precisely is that he suffered damages in view of the
defamatory words and statements uttered by the private respondent, in the amount of
Ten Thousand Pesos (P10,000.00) as moral damages and the further sum of Ten
Thousand Pesos (P10,000) as exemplary damages.

Same; Same; Moral damages recoverable in case of libel, slander or any other form of
defamation.—Article 2219, par. (7) of the Civil Code allows the recovery of moral
damages in case of libel, slander, or any other form of defamation. This provision of law
establishes the right of an offended party in a case for oral defamation to recover from
the guilty party damages for injury to his feelings and reputation. The offended party is
likewise allowed to recover punitive or exemplary damages.

● Banal v. Tadeo, Jr., 156 SCRA 325

Nos. L-78911-25. December 11, 1987.*

CHARMINA B. BANAL, petitioner, vs. THE HON. TOMAS V. TADEO, JR., Presiding
Judge, RTC-Quezon City, Branch 105 and Rosario Claudio, respondents.

Criminal Procedure; Civil Liability; Basis of civil liability arising from crime; Criminal
Liability will give rise to civil liability only if the same felonious act or omission results in
damages or injury to another and is the direct and proximate cause thereof.—Generally,
the basis of civil liability arising from crime is the fundamentalpostulate of our law that
"Every man criminally liable is also civilly liable" (Art. 100, The Revised Penal Code).
Underlying this legal principle is the traditional theory that when a person commits a
crime he offends two entities namely (1) the society in which he lives or the political
entity called the State whose law he had violated; and (2) the individual member of that
society whose person, right, honor, chastity or property was actually or directly injured
or damaged by the same punishable act or omission. However, this rather broad and
general provision is among the most complex and controversial topics in criminal
procedure. It can be misleading in its implications especially where the same act or
omission may be treated as a crime in one instance and as a tort in another or where the
law allows a separate civil action to proceed independently of the course of the criminal
prosecution with which it is intimately intertwined. Many legal scholars treat as a
misconception or fallacy the generally accepted notion that the civil liability actually
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

arises from the crime when, in the ultimate analysis, it does not. While an act or
omission is felonious because it is punishable by law, it gives rise to civil liability not so
much because it is a crime but because it caused damage to another. Viewing things
pragmatically, we can readily see that what gives rise to the civil liability is really the
obligation and the moral duty of everyone to repair or make whole the damage caused to
another by reason of his own act or omission, done intentionally or negligently, whether
or not the same be punishable by law. In other words, criminal liability will give rise to
civil liability only if the same felonious act or omission results in damage or injury to
another and is the direct and proximate cause thereof. Damage or injury to another is
evidently the foundation of the civil action. Such is not the case in criminal actions for, to
be criminally liable, it is enough that the act or omission complained of is punishable,
regardless of whether or not it also causes material damage to another. (See Sangco,
Philippine Law on Torts and Damages, 1978, Revised Edition, pp. 246-247). Article 20 of
the New Civil Code provides: "Every person who, contrary to law, wilfully or negligently
causes damage to another, shall indemnify the latter for the same." Regardless,
therefore, of whether or not a special law so provides, indemnification of the offended
party may be had on account of the damage, loss, or injury directly suffered as a
consequence of the wrongful act of another. The indemnity which a person is sentenced
to pay forms an integral part of the penalty imposed by law for the commission of a crime
(Quemel v. Court of Appeals, 22 SCRA 44, citing Bagtas v. Director of Prisons, 84 Phil.
692). Every crime gives rise to a penal or criminal action for the punishment of the guilty
party, and also to civil action for the restitution of the thing, repair of the damage, and
indemnification for the losses.

Same; Same; Private party who suffered the offenses committed against her cannot be
disregarded; Case at bar.—Indeed one cannot disregard the private party in the case at
bar who suffered the offenses committed against her. Not only the State but the
petitioner too is entitled to relief as a member of the public which the law seeks to
protect. She was assured that the checks were good when she parted with money,
property, or services. She suffered with the State when the checks bounced. In Lozano v.
Hon. Martinez (G.R. No. 63419, December 18, 1986) and the cases consolidated
therewith, we held that "The effects of a worthless check transcend the private interests
of the parties directly involved in the transaction and touch the interests of the
community at large." Yet, we too recognized the wrong done to the private party
defrauded when we stated therein that "The mischief it creates is not only a wrong to the
payee or the holder, but also an injury to the public." Civil liability to the offended private
party cannot thus be denied. The payee of the check is entitled to receive the payment of
money for which the worthless check was issued. Having been caused the damage, she is
entitled to recompense.

● Manantan v. CA, 350 SCRA 387

G.R. No. 107125. January 29, 2001.*

GEORGE MANANTAN, petitioner, vs. THE COURT OF APPEALS, SPOUSES

MARCELINO NICOLAS and MARIA NICO-LAS, respondents.
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

Criminal Procedure; Double Jeopardy; Elements; Appeals; There is no double jeopardy

where, from a judgment of acquittal, an appeal was brought to the Court of Appeals by
the private complainant, elevating the civil aspect of the criminal case.—Preliminarily,
petitioner’s claim that the decision of the appellate court awarding indemnity placed him
in double jeopardy is misplaced. The constitution provides that “no person shall be twice
put in jeopardy for the same offense. If an act is punished by a law and an ordinance,
conviction or acquittal under either shall constitute a bar to another prosecution for the
same act." When a person is charged with an offense and the case is terminated either by
acquittal or conviction or in any other manner without the consent of the accused, the
latter cannot again be charged with the same or identical offense. This is double
jeopardy. For double jeopardy to exist, the following elements must be established: (a) a
first jeopardy must have attached prior to the second; (2) the first jeopardy must have
terminated; and (3) the second jeopardy must be for the same offense as the first. In the
instant case, petitioner had once been placed in jeopardy by the filing of Criminal Case
No. 066 and the jeopardy was terminated by his discharge. The judgment of acquittal
became immediately final. Note, however, that what was elevated to the Court of Appeals
by private respondents was the civil aspect of Criminal Case No. 066. Petitioner was not
charged anew in CA-G.R. CV No. 19240 with a second criminal offense identical to the
first offense. The records clearly show that no second criminal offense was being imputed
to petitioner on appeal. In modifying the lower court’s judgment, the appellate court did
not modify the judgment of acquittal. Nor did it order the filing of a second criminal case
against petitioner for the same offense. Obviously, therefore, there was no second
jeopardy to speak of. Petitioner’s claim of having been placed in double jeopardy is
incorrect.

Same; Civil Liability; Damages; Our law recognizes two kinds of acquittal, with different
effects on the civil liability of the accused—(a) first is an acquittal on the ground that the
accused is not the author of the act or omission complained of and this instance closes
the door to civil liability, and, (b) second is an acquittal based on reasonable doubt on the
guilt of the accused, in which case even if the guilt of the accused has not been
satisfactorily established, he is not exempt from civil liability which may be proved by
preponderance of evidence only.—Our law recognizes two kinds of acquittal, with
different effects on the civil liability of the accused. First is an acquittal on the ground
that the accused is not the author of the act or omission complained of. This instance
closes the door to civil liability, for a person who has been found to be not the
perpetrator of any act or omission cannot and can never be held liable for such act or
omission. There being no delict, civil liability ex delicto is out of the question, and the
civil action, if any, which may be instituted must be based on grounds other than the
delict complained of. This is the situation contemplated in Rule 111 of the Rules of Court.
The second instance is an acquittal based on reasonable doubt on the guilt of the
accused. In this case, even if the guilt of the accused has not been satisfactorily
established, he is not exempt from civil liability which may be proved by a
preponderance of evidence only. This is the, situation contemplated in Article 29 of the
Civil Code, where the civil action for damages is “for the same act or omission.” through
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

the two actions have different purposes, the matters discussed in the civil case are similar
to those discussed in the criminal case. However, the judgment in the criminal
proceeding cannot be read in evidence in the civil action to establish any fact there
determined, even though both actions involve the same act or omission. The reason for
this rule is that the parties are not the same and secondarily, different rules of evidence
are applicable. Hence, notwithstanding herein petitioner’s acquittal, the Court of Appeals
in determining whether Article 29 applied, was not precluded from looking into the
question of petitioner’s negligence or reckless imprudence.

● Manliclic v. Calaunan, 512 SCRA 642

G.R. No. 150157. January 25, 2007.*

MAURICIO MANLICLIC and PHILIPPINE RABBIT BUS LINES, INC., petitioners, vs.
MODESTO CALAUNAN, respondent. Manliclic vs. Calaunan, 512 SCRA 642, G.R. No.
150157 January 25, 2007

Quasi-Delicts; Extinction of Civil Liability; The extinction of civil liability referred to

Section 2(b) of Rule 111, refers exclusively to civil liability founded on Article 100 of the
Revised Penal Code, whereas the civil liability for the same act considered as a
quasidelict only and not as a crime is not extinguished even by a declaration in the
criminal case that the criminal act charged has not happened or has not been committed
by the accused.—From the foregoingdeclaration of the Court of Appeals, it appears that
petitioner Manliclic was acquitted not on reasonable doubt, but on the ground that he is
not the author of the act complained of which is based on Section 2(b) of Rule 111 of the
Rules of Criminal Procedure which reads: (b) Extinction of the penal action does not
carry with it extinction of the civil, unless the extinction proceeds from a declaration in a
final judgment that the fact from which the civil might arise did not exist. In spite of said
ruling, petitioner Manliclic can still be held liable for the mishap. The afore-quoted
section applies only to a civil action arising from crime or ex delicto and not to a civil
action arising from quasi-delict or culpa aquiliana. The extinction of civil liability
referred to in Par. (e) of Section 3, Rule 111 [now Section 2 (b) of Rule 111], refers
exclusively to civil liability founded on Article 100 of the Revised Penal Code, whereas
the civil liability for the same act considered as a quasi-delict only and not as a crime is
not extinguished even by a declaration in the criminal case that the criminal act charged
has not happened or has not been committed by the accused.

Same; Same; Same; A quasi-delict or culpa aquiliana is a separate legal institution under
the Civil Code with a substantivity all its own, and individuality that is entirely apart and
independent from a delict or crime—a distinction exists between the civil liability arising
from a crime and the responsibility for quasi-delicts or culpa extracontractual; It is now
settled that acquittal of the accused, even if based on a finding that he is not guilty, does
not carry with it the extinction of the civil liability based on quasi-delict.—A quasi-delict
or culpa aquiliana is a separate legal institution under the Civil Code with a substantivity
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

all its own, and individuality that is entirely apart and independent from a delict or
crime—a distinction exists between the civil liability arising from a crime and the
responsibility for quasi-delicts or culpa extra-contractual. The same negligence causing
damages may produce civil liability arising from a crime under the Penal Code, or create
an action for quasi-delicts or culpa extra-contractual under the Civil Code. It is now
settled that acquittal of the accused, even if based on a finding that he is not guilty, does
not carry with it the extinction of the civil liability based on quasi delict. In other words,
if an accused is acquitted based on reasonable doubt on his guilt, his civil liability arising
from the crime may be proved by preponderance of evidence only. However, if an
accused is acquitted on the basis that he was not the author of the act or omission
complained of (or that there is declaration in afinal judgment that the fact from which
the civil might arise did not exist), said acquittal closes the door to civil liability based on
the crime or ex delicto. In this second instance, there being no crime or delict to speak of,
civil liability based thereon or ex delicto is not possible. In this case, a civil action, if any,
may be instituted on grounds other than the delict complained of.

● Padilla v. CA, 129 SCRA 558

No. L-39999. May 31, 1984.

ROY PADILLA, FILOMENO GALDONES, ISMAEL GONZALGO and JOSE FARLEY

BEDEÑA, petitioners, vs. COURT OF APPEALS, respondent.

Criminal Procedure; Damages; Civil liability is not extinguished where acquittal is based
on reasonable doubt that accused is guilty of the crime charged.—The judgment of
acquittal extinguishes the liability of the accused for damages only when it includes a
declaration that the facts from which the civil might arise did not exist. Thus, the civil
liability is not extinguished by acquittal where the acquittal is based on reasonable doubt
(PNB v. Catipon, 98 Phil. 286) as only preponderance of evidence is required in civil
cases; where the court expressly declares that the liability of the accused is not criminal
but only civil in nature (De Guzman v. Alvia, 96 Phil. 558; People v. Pantig, supra) as, for
instance, in the felonies of estafa, theft, and malicious mischief committed by certain
relatives who thereby incur only civil liability (See Art. 332, Revised Penal Code); and,
where the civil liability does not arise from or is not based upon the criminal act of which
the accused was acquitted (Castro v. Collector of Internal Revenue, 4 SCRA 1093; See
Regalado, Remedial Law Compendium, 1983 ed, p. 623).

Same; Same; Court may acquit an accused on reasonable doubt and still order payment
of civil damages in the same case. No separate civil action is necessary.—There appear to
be no sound reasons to require a separate civil action to still be filed considering that the
facts to be proved in the civil case have already been established in the criminal
proceedings where the accused was acquitted. Due process has been accorded the
accused. He was, in fact, exonerated of the criminal charged. The constitutional
presumption of innocence called for more vigilant efforts on the part of prosecuting
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

attorneys and defense counsel, a keener awareness by all witnesses of the serious
implications of perjury, and a more studied consideration by the judge of the entire
records and of applicable statutes and precedents. To require a separate civil action
simply because the accused was acquitted would mean needless clogging of court dockets
and unnecessary duplication of litigation with all its attendant loss of time, effort, and
money on the part of all concerned. Same; Same; Same.—We see no need to amend
Article 29 of the Civil Code in order to allow a court to grant damages despite a judgment
of acquittal based on reasonable doubt. What Article 29 clearly and expressly provides is
a remedy for the plaintiff in case the defendant has been acquitted in a criminal
prosecution on the ground that his guilt has not been proved beyond reasonable doubt. It
merely emphasizes that a civil action for damages is not precluded by an acquittal for the
same criminal act or omission. The Civil Code provision does not state that the remedy
can be availed of only in a separate civil action. A separate civil case may be filed but
there is no statement that such separate filing is the only and exclusive permissible mode
of recovering damages.

Same; Same; While civil damages may be awarded in the criminal case despite acquittal,
this rule does not preclude the filing of a separate civil action under certain
circumstances.—A separate civil action may be warranted where additional facts have to
be established or more evidence must be adduced or where the criminal case has been
fully terminated and a separate complaint would be just as efficacious or even more
expedient than a timely remand to the trial court where the criminal action was decided
for further hearings on the civil aspects of the case. The offended party may, of course,
choose to file a separate action. These do not exist in this case. Considering moreover the
delays suffered by the case in the trial, appellate, and review stages, it would be unjust to
the complainants in this case to require at this time a separate civil action to be filed.

● Dayap v. Sendiong, 577 SCRA 134

Note.—The words “fraud” or “deceit” need not be used in an information for the
allegations therein to sufficiently allege the offense of estafa. (Flores vs. Layosa, 436
SCRA 337 [2004])

G.R. No. 177960. January 29, 2009.*

JEFFREY RESO DAYAP, petitioner, vs. PRETZY-LOU SENDIONG, GENESA

SENDIONG, ELVIE SY and DEXIE DURAN, respondents.

Criminal Law; Reckless Imprudence; Article 365 of the Revised Penal Code punishes any
person who, by reckless imprudence, commits any act which, had it been intentional,
would constitute a grave felony.—Article 365 of the Revised Penal Code punishes any
person who, by reckless imprudence, commits any act which, had it been intentional,
would constitute a grave felony, with the penalty of arresto mayor in its maximum period
to prision correccional in its medium period. When such reckless imprudence the use of
a motor vehicle, resulting in the death of a person attended the same article imposes
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

upon the defendant the penalty of prision correccional in its medium and maximum
periods.

Same; Civil Liability; The civil action based on delict may be deemed extinguished if
there is a finding on the final judgment in the criminal action that the act or omission
from which the civil liability may arise did not exist or where the accused did not commit
the acts or omission imputed to him.—The acquittal of the accused does not
automatically preclude a judgment against him on the civil aspect of the case. The
extinction of the penal action does not carry with it the extinction of the civil liability
where: (a) the acquittal is based on reasonable doubt as only preponderance of evidence
is required; (b) the court declares that the liability of the accused is only civil; and (c) the
civil liability of the accused does not arise from or is not based upon the crime of which
the accused is acquitted. However, the civil action based on delict may be deemed
extinguished if there is a finding on the final judgment in the criminal action that the act
or omission from which the civil liability may arise did not exist or where the accused did
not commit the acts or omission imputed to him.

Same; Same; Due Process; Demurrer; If demurrer is granted and the accused is
acquitted by the court, the accused has the right to adduce evidence on the civil aspect of
the case unless the court also declares that the act or omission from which the civil
liability may arise did not exist.—If demurrer is granted and the accused is acquitted by
the court, the accused has the right to adduce evidence on the civil aspect of the case
unless the court also declares that the act or omission from which the civil liability may
arise did not exist. This is because when the accused files a demurrer to evidence, he has
not yet adduced evidence both on the criminal and civil aspects of the case. The only
evidence on record is the evidence for the prosecution. What the trial court should do is
issue an order or partial judgment granting the demurrer to evidence and acquitting the
accused, and set the case for continuation of trial for the accused to adduce evidence on
the civil aspect of the case and for the private complainant to adduce evidence by way of
rebuttal. Thereafter, the court shall render judgment on the civil aspect of the case.

C. Nature and Effects of Obligations

D. Kinds of Obligations
1. Civil and Natural Obligations
Cases:

Picart v. Smith, 37 Phil. 809

[No. 12219. March 15, 1918.]

AMADO PICART, plaintiff and appellant, vs. FRANK SMITH, jr., defendant and appellee.
1.NEGLIGENCE; CRITERION FOR DETERMINING EXISTENCE OF NEGLI-GENCE.—The
test for determining whether a person is negligent in doing an act whereby injury or damage
results to the person or property of another is this: Would a prudent man, in the position of the
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

person to whom negligence is attributed, foresee harm to the person injured as a reasonable
consequence of the course about to be pursued. If so, the law imposes a duty on the actor to
refrain from that course or to take precaution against its mischievous results, and the failure to
do so constitutes negligence. Reasonable foresight of harm, followed by the ignoring of the
admonition born of this prevision, is the constitutive f act in negligence.

2.ID.; CONTRIBUTORY NEGLIGENCE; SUCCESSIVE NEGLIGENT ACTS.—Where both

parties are guilty of negligence, but the negligent act of one succeeds that of the other by an
appreciable interval of time, the one who has the last reasonable opportunity 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.

3.ID.; ID.; ID.; CASE AT BAR.—The plaintiff was riding a pony on a bridge, Seeing an
automobile ahead he improperly pulled his horse over to the railing on the right. The driver of
the automobile, however, guided his car toward the plaintiff without diminution of speed until
he was only a few feet away. He then turned to the right but passed so closely to the horse that
the latter being frightened, jumped around and was killed by the passing car. Held: That
although the plaintiff was guilty of negligence in being on the wrong side of the bridge, the
defendant was nevertheless civilly liable for the legal damages resulting from the collision, as he
had a fair opportunity to avoid the accident af ter he realized the situation created by the
negligence of the plaintiff and failed to avail himself of that opportunity; while the plaintiff could
by no means then place himself in a position of greater safety.

Ongsiako v. IAC, 152 SCRA 627

No. L-69901. July 31, 1987.*

ANTONIO RAMON ONGSIAKO, petitioner, vs. INTERMEDIATE APPELLATE COURT and

THE PEOPLE OF THE PHILIPPINES, respondents.
Criminal Law; Evidence; Simple Negligence; Although the Supreme Court is not a trier of facts,
it has the authority to review and reverse the factual findings of the lower courts if it finds that
they do not conform to the evidence on record.—While this Court is ordinarily not a trier of
facts, it has the authority to review and reverse the factual findings of the lower court if it finds
that they do not conform to the evidence of record. We so find in this case, for reasons to be
discussed presently.

Same; Same; Same; Trial court's finding of negligence that the accused had enough opportunity
to avoid the collision because the jeep had still about 150 meters away from the bus to avoid the
collision with the oncoming bus, not correct, as the actual distance is 150 feet; Case at bar.—The
trial court held, and the respondent court affirmed, that "the jeep was still about 150 meters
away from the Philippine Rabbit bus when the accused drove his car toward the road shoulder to
avoid the collision with the oncoming bus. In other words, there was sufficient time for Antonio
Ramon Ongsiako to avail of a feasible time to avert hitting the jeep." The judge should have been
more careful in reaching this conclusion for it is not founded on the facts as established. The
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

evidence of record is that the distance was not 150 meters but 150 feet, which makes quite a
difference, indeed. The correct distance, incidentally, was established by no less than the trial
court itself which, in its examination of Robert Ha, the principal prosecution witness, elicited
from him the said information. x x x The Court considers this discrepancy important because the
finding of negligence by the trial court is based on whether or not the accused had enough
opportunity to avoid the collision. And that opportunity depended on the distance between the
two vehicles. If the trial judge had carefully considered the evidence and discovered that the
distance was 150 feet and not meters, it is doubtful that he would have concluded as he did that
the accused was negligent. The distance of 150 feet is less than one-third of 150 meters, which
means that the sufficient time imagined by the trial judge would have been
correspondingly—and significantly—reduced by two-thirds of the actual period. The time as
shortened could not have, if we apply the trial judge's own calculations, prevented the petitioner
from avoiding the collision.

Same; Same; Same; Civil Liability; While the quantum of proof for conviction has not been
established, there is preponderance of evidence to hold petitioner liable in damages from the
injuries sustained by the victims; Moral damages, not awarded.—While the quantum of proof
necessary for conviction has not been established, there is, in our view, a preponderance of
evidence to hold the petitioner liable in damages for the injuries sustained by the victims of this
accident. Although it is really doubtful that he was criminally negligent, we find there is enough
evidence to sustain the conclusion that a little more caution and discretion on his part in
reacting to the threat of a head-on collision with the oncoming bus, could have avoided the
unfortunate accident. For this shortcoming, we hold him liable for the hospitalization expenses
and unearned salaries of the victims as itemized by the trial court and affirmed by the
respondent court. We absolve him, however, from the payment of moral damages and so reduce
his total civil liability to P46,131.04.

Real and Personal Obligations

2. Breach of Obligations
Cases: Barzaga v. CA, et al., 268 SCRA 105

G.R. No. 115129. February 12, 1997.*

IGNACIO BARZAGA, petitioner, vs. COURT OF APPEALS and ANGELITO ALVIAR,

respondents.
Civil Law; Obligations; Damages; Respondent Angelito Alviar was negligent and incurred delay
in the performance of his contractual obligation.—An assiduous scrutiny of the record convinces
us that respondent Angelito Alviar was negligent and incurred in delay in the performance of his
contractual obligation. This sufficiently entitles petitioner Ignacio Barzaga to be indemnified for
the damage he suffered as a consequence of delay or a contractual breach. The law expressly
provides that those who in the performance of their obligation are guilty of fraud, negligence, or
delay and those who in any manner contravene the tenor thereof, are liable for damages.

OBLIGATIONS AND CONTRACTS : Group 2

DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

Same; Same; Same; Case is clearly one of non-performance of a reciprocal obligation.—This case
is clearly one of non-performance of a reciprocal obligation. In their contract of purchase and
sale, petitioner had already complied fully with what was required of him as purchaser, i.e., the
payment of the purchase price of P2,110.00. It was incumbent upon respondent to immediately
fulfill his obligation to deliver the goods otherwise delay would attach.

Same; Same; Same; Award of moral damages sustained.—We therefore sustain the award of
moral damages. It cannot be denied that petitioner and his family suffered wounded feelings,
mental anguish and serious anxiety while keeping watch on Christmas day over the remains of
their loved one who could not be laid to rest on the date she herself had chosen. There is no
gainsaying the inexpressible pain and sorrow Ignacio Barzaga and his family bore at that
moment caused no less by the ineptitude, cavalier behavior and bad faith of respondent and his
employees in the performance of an obligation voluntarily entered into. Barzaga vs. Court of
Appeals, 268 SCRA 105, G.R. No. 115129 February 12, 1997

NPC v. CA, L-473479, May 16, 1988 (Fortuitous Event [FE]) 161 SCRA 334

No. L-47379. May 16,1988 *

NATIONAL POWER CORPORATION, petitioner, vs. HONORABLE COURT OF APPEALS and

ENGINEERING CONSTRUCTION, INC., respondents.
No. L-47481. May 16, 1988.*

ENGINEERING CONSTRUCTION, INC., petitioner, vs. COURT OF APPEALS and NATIONAL

POWER CORPORATION, respondents.
Civil Law; Torts and Damages; Negligence; NPC cannot escape liability because its negligence
was the proximate cause of the loss and damage even though the typhoon was an act of God.—It
is clear from the appellate court’s decision that based on its findings of fact and that of the trial
court’s, petitioner NPC was undoubtedly negligent because it opened the spillway gates of the
Angat Dam only at the height of typhoon “Welming” when it knew very well that it was safer to
have opened the same gradually and earlier, as it was also undeniable that NPC knew of the
coming typhoon at least four days before it actually struck. And even though the typhoon was an
act of God or what we may call force majeure, NPC cannot escape liability because its negligence
was the proximate cause of the loss and damage. As we have ruled in Juan F. Nakpil & Sons v.
Court of Appeals (144 SCRA 596, 606–607): Thus, if upon the happening of a fortuitous event or
an act of God, there concurs a corresponding fraud, negligence, delay or violation or
contravention in any manner of the tenor of the obligation as provided for in Article 1170 of the
Civil Code, which results in loss or damage, the obligor cannot escape liability. The principle
embodied in the act of God doctrine strictly requires that the act must be one occasioned
exclusively by the violence of nature and human agencies are to be excluded from creating or
entering into the cause of the mischief. When the effect, the cause of which is to be considered, is
found to be in part the result of the participation of man, whether it be from active intervention
or neglect, or failure to act, the whole occurrence is thereby humanized, as it was, and removed
from the rules applicable to the acts of God. (1 Corpus Juris, pp. 1174–1175). Thus, it has been
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

held that when the negligence of a person concur s with an act of God in producing a loss, such
person is not exempt from liability by showing that the immediate cause of the damage was the
act of God. To be exempt from liability for loss because of an act of God, he must be free from
any previous negligence or misconduct by which the loss or damage may have been occasioned.
(Fish & Elective Co. v. Phil. Motors, 55 Phil. 129; Tucker v. Milan, 49 O.G. 4379; Limpangco &
Sons v. Yangco Steamship Co., 34 Phil. 594, 604; Lasam v. Smith, 45 Phil. 657)."

Same; Same; Same; Same; The question of whether or not there was negligence on the part of
NPC is a question of fact which falls within the jurisdiction of the CA.—Furthermore, the
question of whether or not there was negligence on the part of NPC is a question of fact which
properly falls within the jurisdiction of the Court of Appeals and will not be disturbed by this
Court unless the same is clearly unfounded, Thus, in Tolentino v. Court of Appeals, (150 SCRA
26, 36) we ruled: “Moreover, the findings of fact of the Court of Appeals are generally final and
conclusive upon the Supreme Court (Leonardo v. Court of Appeals, 120 SCRA 890 [1983]. In
fact it is settled that the Supreme Court is not supposed to weigh evidence but only to determine
its substantially (Nunez v. Sandiganbayan, 100 SCRA 433 [1982] and will generally not disturb
said findings of fact when supported by substantial evidence (Aytona v. Court of appeals, 113
SCRA 575 [1985]; Collector of Customs of Manila v. Intermediate Appellate Court, 137 SCRA 3
[1985]. On the other hand substantial evidence is defined as such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion (Philippine Metal Products,
Inc. v. Court of Industrial Relations, 90 SCRA 135 [1979]; Police Commission v. Lood, 127 SCRA
757 [1984]; Canete v. WCC, 136 SCRA 302 [1985])."

Same; Same; Same; Same; Exemplary Damages; Appellate court is correct in eliminating
exemplary damages since there was no bad faith and gross negligence on the part of NPC.—As to
the question of exemplary damages, we sustain the appellate court in eliminating the same since
it found that there was no bad faith on the part of NPC and that neither can the latter’s
negligence be considered gross. In Dee Hua Liong Electrical Equipment Corp. v. Reyes, (145
SCRA 713, 719) we ruled: “Neither may private respondent recover exemplary damages since he
is not entitled to moral or compensatory damages, and again because the petitioner is not shown
to have acted in a wanton, fraudulent, reckless or oppressive manner.

“Thus, if upon the happening of a fortuitous event or an act of God, there concurs a
corresponding fraud, negligence, delay or violation or contravention in any manner of the tenor
of the obligation as provided for in Article 1170 of the Civil Code, which results in loss or
damage, the obligor cannot escape liability.

“The principle embodied in the act of God doctrine strictly requires that the act must be one
occasioned exclusively by the violence of nature and human agencies are to be excluded from
creating or entering into the cause of the mischief. When the effect, the cause of which is to be
considered, is found to be in part the result of the participation of man, whether it be from active
intervention or neglect, or failure to act, the whole occurrence is thereby humanized, as it was,
and removed from the rules applicable to the acts of God. (1 Corpus Juris, pp. 1174–1175).

OBLIGATIONS AND CONTRACTS : Group 2

DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

“Thus, it has been held that when the negligence of a person concurs with an act of God in
producing a loss, such person is not exempt from liability by showing that the immediate cause
of the damage was the act of God. To be exempt from liability for loss because of an act of God,
he must be free from any previous negligence or misconduct by which the loss or damage may
have been occasioned. (Fish & Elective Co. v. Phil. Motors, 55 Phil. 129; Tucker v. Milan, 49 O.G.
4379; Limpangco & Sons v. Yangco Steamship Co., 34 Phil. 594, 604; Lasam v. Smith, 45 Phil.
657)."

Sons et al. v. CA, et al., G.R. No. 47851, Oct. 3, 1986 )Requisites of FE

No. L-47851. October 3, 1986.*

JUAN F. NAKPIL & SONS, and JUAN F. NAKPIL, petitioners, vs. THE COURT OF APPEALS,
UNITED CONSTRUCTION COMPANY, INC., JUAN J. CARLOS, and the PHILIPPINE BAR
ASSOCIATION, respondents.
No. L-47863. October 3, 1986.*

THE UNITED CONSTRUCTION CO., INC., petitioner, vs. COURT OF APPEALS, ET AL.,
respondents.
No. L-47896. October 3, 1986.*

PHILIPPINE BAR ASSOCIATION, ET AL., petitioners, vs. COURT OF APPEALS, ET AL.,

respondents.
Obligations and Contracts; Damages; Requisites for exemption from liability due to an “act of
God.”—To exempt the obligor from liability under Article 1174 of the Civil Code, for a breach of
an obligation due to an “act of God,’ the following must concur: (a) the cause of the breach of the
obligation must be independent of the will of the debtor; (b) the event must be either
unforseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor
to fulfill his obligation in a normal manner; and (d) the debtor must be free from any
participation in, or aggravation of the injury to the creditor.

Same; Same; Having made substantial deviations from plans and specifications, having failed to
observe requisite workmanship in construction, and the architect made plans that contain
defects and inadequacies, both contractor and architect cannot escape liability for damages
sustained by the building that collapsed in the wake of an earthquake on Aug. 2, 1968.—The
negligence of the defendant and the third-party defendants petitioners was established beyond
dispute both in the lower court and in the Intermediate Appellate Court. Defendant United
Construction Co., Inc. was found to have made substantial deviations from the plans and
specifications, and to have failed to observe the requisite workmanship in the construction as
well as to exercise the requisite degree of supervision; while the third-party defendants were
found to have inadequacies or defects in the plans and specifications prepared by them. As
correctly assessed by both courts, the defects in the construction and in the plans and
specifications were the proximate causes that rendered the PBA building unable to withstand
the earthquake of August 2, 1968. For this reason the defendant and third-party defendants
cannot claim exemption from liability.
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

Same; Same; Fact that all other buildings withstood the earthquake, except the one at bar,
cannot be ignored.—In any event, the relevant and logical observations of the trial court as
affirmed by the Court of Appeals that “while it is not possible to state with certainty that the
building would not have collapsed were those defects not present, the fact remains that several
buildings in the same area withstood the earthquake to which the building of the plaintiff was
similarly subjected,” cannot be ignored.

Same; Same; One who creates a dangerous condition cannot escape liability although an act of
God may have intervened.—Relative thereto, the ruling of the Supreme Court in Tucker v. Milan
(49 O.G. 4379, 4380) which may be in point in this case, reads: “One who negligently creates a
dangerous condition cannot escape liability for the natural and probable consequences thereof,
although the act of a third person, or an act of God for which he is not responsible, intervenes to
precipitate the loss.” As already discussed, the destruction was not purely an act of God. Truth to
tell hundreds of ancient buildings in the vicinity were hardly affected by the earthquake. Only
one thing spells out the fatal difference; gross negligence and evident bad faith, without which
the damage would not have occurred.

Same: Same; Liability of architect and contractor for collapse of building is

solidary.—WHEREFORE, the decision appealed from is hereby MODIFIED and considering the
special and environmental circumstances of this case, We deem it reasonable to render a
decision imposing, as We do hereby impose, upon the defendant and the third-party defendants
(with the exception of Roman Ozaeta) a solidary (Art. 1723, Civil Code, Supra, p. 10) indemnity
in favor of the Philippine Bar Association of FIVE MILLION (P5,000,000.00) Pesos to cover all
damages (with the exception of attorney’s fees) occasioned by the loss of the building (including
interest charges and lost rentals) and an additional ONE HUNDRED THOUSAND
(P100,000.00) Pesos as and for attorney’s fees, the total sum being payable upon the finality of
this decision. Upon failure to pay on such finality, twelve (12%) per cent interest per annum
shall be imposed upon afore-mentioned amounts from finality until paid. Solidary costs against
the defendant and third-party defendants (except Roman Ozaeta).

RCPI v. CA, L-44748, August 29, 1946 (Corporation acting through

Employees)

Radio Communications of the Philippines, Inc. vs. Court of Appeals

No. L-44748. August 29, 1986.*

RADIO COMMUNICATIONS OF THE PHILS., INC. (RCPI), petitioner, vs. COURT OF

APPEALS and LORETO DIONELA, respondents.
Civil Law; Damages; Breach of contract; Inclusion of extraneous and libelous matter in
telegraphic message constitutes breach of contract.—Petitioner is a domestic corporation
engaged in the business of receiving and transmitting messages. Everytime a person transmits a
message through the facilities of the petitioner, a contract is entered into. Upon receipt of the
rate or fee fixed, the petitioner undertakes to transmit the message accurately. There is no
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

question that in the case at bar, libelous matters were included in the message transmitted,
without the consent or knowledge of thesender. There is a clear case of breach of contract by the
petitioner in adding extraneous and libelous matters in the message sent to the private
respondent.

Same; Same; Same; Same; Telegraph corporation, as employer is liable directly for the acts of its
employees; Action based on Arts. 19 and 20 of the Civil Code, not on subsidiary liability of
corporation under Article 1161, New Civil Code.—As a corporation, the petitioner can act only
through its employees. Hence the acts of its employees in receiving and transmitting messages
are the acts of the petitioner. To hold that the petitioner is not liable directly for the acts of its
employees in the pursuit of petitioner’s business is to deprive the general public availing of the
services of the petitioner of an effective and adequate remedy. The action for damages was filed
in the lower court directly against respondent corporation not as an employer subsidiarily liable
under the provisions of Article 1161 of the New Civil Code in relation to Art. 103 of the Revised
Penal Code. The cause of action of the private respondent is based on Arts. 19 and 20 of the New
Civil Code (supra). As well as on respondent’s breach of contract thru the negligence of its own
employees.

Same; Same; Same; Same; Res ipsa loquitur; Since negligence may be hard to substantiate in
some cases, the application of the doctrine of res ipsa loquitur is proper; Case at bar.—In most
cases, negligence must be proved in order that plaintiff may recover. However, since negligence
may be hard to substantiate in some cases, we may apply the doctrine of RES IPSA LOQUITUR
(the thing speaks for itself), by considering the presence of facts or circumstances surrounding
the injury.

NPC v. EIN Chemical Corp., L-248565, Nov. 14, 1986 145 SCRA 529

No. L-248565. November 14,1986.*

NATIONAL POWER CORPORATION, plaintiff-appellant, vs. EIN CHEMICAL CORPORATION

and PHILIPPINE INTERNATIONAL SURETY CO., defendants-appellees.

CivilLaw; Contracts; Contract freely entered into by the parties in good faith; No relationship
between the delivery date and the opening of the letter of credit Extensions of the expiry dates
cannot be interpreted as extensions of delivery date.—A review of the records shows that the
contract was freely entered into by both parties in good faith, The provisions of the contract,
however, indicate that there is no relationship between the delivery date and the opening of the
letter of credit which was anyway opened within a reasonable time after the signing of the
contract. The extensions of the expiry dates of the letter of credit cannot, by any means, be
interpreted as extensions of the delivFjry date. If this was the intention of the parties, then a
corresponciing date or deadline could have been provided. As the terms show, no other delivery
date can even be inferred. The claim that the intention of the parties for the EIN to ship the
goods upon notice of the opening of the letter of credit is without merit.
OBLIGATIONS AND CONTRACTS : Group 2
DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

Same; Same; Same; Same; Imputation ofmalicious delay against petitioner, absent proof of such
delay.—The imputation of malicious delay on the part of NPC is groundless, there being no proof
to that effect. On the contrary, NPC has been very lenient by extending the expiry date of the
letter of credit thrice despite the failure of EIN to fully deliver on the contract. The problem of
bottoms is one that is well-known and anticipated by suppliers and shippers, and NPC cannot be
faulted for such problem since it opened the letter of credit within a reasonable time after the
signing of the contract. The NPC, in fact, had no duty to inform EIN of the shipping time
between the US Atlantic ports and the Philippines since all shippers and suppliers are presumed
to know this as part of their business.

Same; Same; Breach ofcontract; Failure ofa contractingparty to completely deliveron its contract
inspite ofleniency ofthe otherparty in enforcing its rights constitutes breach of contract; Laxity
ofcontracting party in enforcing its rights does not diminish its rights.—Evidently the EIN
clearly committed a breach of contract by f ailing to completely deliver on its contract inspite of
the leniency of the NPC in enforcing its rights. Laxity of a contracting party in the enforcement
of its rights under the contract does not in any manner diminish its rights.

Arrieta v. National Rice and Corn Corp., 10 SCRA 79

No. L-15645. January 31, 1964.

PAZ P. ARRIETA and VITALIADO ARRIETA, plaintiffs-appellees, vs. NATIONAL RICE AND
CORN CORPORATION, defendant-appellant, MANILA UNDERWRITERS INSURANCE CO.,
INC., defendant-appellee.
Obligations and contracts; Liability for non-performance; Failure to put up letter of credit
within agreed period.—One who assumes a contractual obligation and fails to perform the same
on account of his inability to meet certain bank requirements which inability he knew and was
aware of when he entered into the contract, should be held liable in damages for breach of
contract.
Under Article 1170 of the Civil Code, not only debtors guilty of fraud, negligence or default but
also every debtor, in general, who fails in the performance of his obligations is bound to
indemnify for the losses and damages caused thereby.

Same; Same; Meaning of phrase "in any manner contravene the tenor" of the obligation in Art.
1170, Civil Code.—The phrase "in any manner contravene the tenor" of the obligation in Art.
1170, Civil Code, includes any illicit task which impairs the strict and faithful fulfillment of the
obligation, or every kind of defective performance.

Same; Same; Waiver of breach of contract not presumed.—Waivers are not presumed, but must
be clearly and convincingly shown, either by express stipulation or acts admitting no other
reasonable explanation.

OBLIGATIONS AND CONTRACTS : Group 2

DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

Same; Payment of award; Philippine currency.—In view of Republic Act 527 which specifically
requires the discharge of obligations only "in any coin or currency which at the time of payment
is legal tender for public and private debt", the award of "damages in U S. dollars made by the
lower court in the case at bar is modified by converting it into Philippine pesos at the rate of
exchange prevailing at the time the obligation was incurred, or when the contract in question
was executed.

Magat v. Medialdea, L-37120, April 20, 1983

Magat vs. Medialdea, 121 SCRA 418, April 20, 1983

No. L-37120. April 20, 1983.*

VICTORINO D. MAGAT, petitioner, vs. HON. LEO D. MEDIALDEA and SANTIAGO A.

GUERRERO, respondents.
Action; Contracts; A complaint that alleges that the defendant violated his prestations under a
contract such that by reason thereof the plaintiff will suffer damages, sufficiently states a valid
cause of action.—After a thorough examination of the complaint at bar, We find the test of legal
sufficiency of the cause of action adequately satisfied. In a methodical and logical sequence, the
complaint recites the circumstances that led to the perfection of the contract entered into by the
parties. It further avers that while petitioner had fulfilled his part of the bargain [paragraph 8 of
the Complaint], private respondent failed to comply with his correlative obligation by refusing to
open a letter of credit to cover payment of the goods ordered by him [paragraphs 11 & 12 of the
Complaint], and that consequently, petitioner suffered not only loss of his expected profits, but
moral and exemplary damages as well. From these allegations, the essential elements of a cause
of action are present, to wit: [1] the existence of a legal right to the plaintiff; [2] a correlative
duty of the defendant and [3] an act or omission of the defendant in violation of the plaintiff’s
right, with consequent injury or damage to the latter for which he may maintain an action for
recovery of damages or other appropriate relief.

Same; Same; Same.—Indisputably, the parties, both businessmen, entered into the aforesaid
contract with the evident intention of deriving some profits therefrom. Upon breach of the
contract by either of them, the other would necessarily suffer loss of his expected profits. Since
the loss comes into being at the very moment of breach, such loss is real, “fixed and vested” and,
therefore, recoverable under the law.

Same; Same; Damages; Damages cover not only actual loss (daño emergente), but also profits
that may be lost (lucro cesante). An averment that plaintiff stand, to lose expected profits,
goodwill, etc. due to defendant’s breach of contract sufficiently states a cause of action.—The
damages which the obligor is liable for includes not only the value of the loss suffered by the
obligee [daño emergente] but also the profits which the latter failed to obtain [lucro cesante]. If
the obligor acted in good faith, he shall be liable for those damages that are the natural and
probable consequences of the breach of the obligation and which the parties have foreseen or
could have reasonably foreseen at the time the obligation was constituted; and in case of fraud,

OBLIGATIONS AND CONTRACTS : Group 2

DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU
E-SCRA

bad faith, malice or wanton attitude, he shall be liable for all damages which may be reasonably
attributed to the non-performance of the obligation.

OBLIGATIONS AND CONTRACTS : Group 2

DANO, DE JESUS, DE VENECIA, DE VERA, DUQUE, GABRIEL, GARCIA, IGNACIO, LAO, LU