Facts: There was a plane crash that involved PAL’s planes, the route of which was

fromIloilo-Romblon-Manila. It crashed at Mt. Baco, Mindoro, one hour and fifteen

minutesafter take-off. All passengers and crew of the said plane died. The plane
in this case was a DC-3 type of aircraft, manufactured in 1942 andacquired by the
defendant in 1948. It had flown almost 18,000 hours at the time of its ill-fated flight.
Despite its age, however, it had been certified as airworthy by theCivil Aeronautics
Administration. The petitioners of this case are the parents of Pedro Avila Jr. who was
one of thepassengers of this flight. At the time of his death, he was single and 30 years of age.
His life expectancy was 25 years. The route prescribed by the Civil Aeronautics
Administration for the flight of theplane in the afternoon of November 23, 1960 was
Iloilo-Romblon-Manila, the latterstage, denominated as airway "Amber I," being
a straight lane from Romblon toManila. The prescribed elevation of the flight was
6,000 ft. The plane reported itsposition after take-off and again when it was abeam
the Roxas homer. However, itdid not intercept airway "Amber I" over Romblon as it
was supposed to do, and thepilot did not give his position then although Romblon
was a compulsory checkingpoint. The fact was that the plane had deviated from the
prescribed route by 32miles to the west when it crashed at Mt. Baco. The reading of
the altimeter of theplane when its wreckage was found was 6,800 ft.It was suggested that
in the course of the flight between Romblon and Mindoro theaircraft was drifted
westward by the cross-winds then blowing in the region. Thedefendant, however,
has not given a definite explanation as to why, if such was thecase, the pilot failed to
make the necessary correction in his flight to compensatefor the drift. According to
the defendant's witness, Maj. Mijares, Chief of the AviationSafety Division of the Civil
Aeronautics Administration and Chairman of the CAAInvestigating Committee, there
was a navigational error, to which several factorscontributed: "the weather
observation at that time from the Weather Bureau wasnot so good between Mt.
Baco and Romblon and the wind aloft was quite strong,which would be also one of
the causes for the drifting of the aircraft; and the otherstrong probability, I would
say, would be the malfunction of the aircraft'snavigational instrument." He further
explained that "a cross-wind can drift the planeif the pilot will not make the
necessary correction, if his navigational instrument is

malfunctioning and the visual reference outside the aircraft could not make
thenecessary corrections." There is nothing in the testimony of Maj. Mijares to show
just how strong the cross-winds were in the region at the time, although in the
investigation of the accidentby the Senate Committee on transportation there was
testimony that the cross-winds had a velocity of either 20 to 25 knots or 25 to 35
knots an hour. Consideringthe relatively short distance from Romblon to Mt. Baco
and the brief span of time itwould take to fly that distance, cross-winds with the
velocity stated could not havepossibly deviated the plane by as much as 32
miles.What is undisputed therefore is that the pilot did not follow the route prescribed forhis
flight, at least between Romblon and Manila. Since up to that point overRomblon,
where he was supposed to intersect airway "Amber I" the weather wasclear, the
most reasonable conclusion is that his failure to do so was intentional,and that he
probably wanted to fly on a straight line to Manila. It was a violation of air-craft
traffic rules to which, under the circumstances, the accident
may bedirectly attributable.So, the Davila spouses filed an action for damages
against PAL for the death of theirson, and the CFI – Iloilo awarded the spouses the
following sums:(1) For the death of Pedro T. Davila, Jr. the amount of P6,000.00;(2)
For the loss of the earning capacity of the deceased at the rate of P12,000.00per
annum for five (5) years in the amount of Sixty Thousand Pesos. (P60,000.00);(3) For
moral damages in favor of the plaintiffs Ten Thousand Pesos (P10,000.00);(4) For
exemplary damages in the amount of Ten Thousand Pesos (P10,000.00);(5) For
actual damages the amount of Five Thousand Pesos (P5,000.00) brokendown to as
follows: A rolex watch valued at P600.00; a pistol worth P300.00; burialexpenses
P600.00; for the lot and the mausoleum P3,500.00;(6) For Attorney's fees the
amount of Ten Thousand Pesos (P10,000.00) or a totalamount of One Hundred and
One Thousand Pesos (P101,000.00) To pay the costs of this proceedings.

The Davila spouses appealed this ruling directly to the Supreme Court asking for
anincrease in the indemnity awarded for the death of their son, while PAL asked
forexoneration, if not mitigation, of such liability.Issue: How much should be
awarded to the Davila spouses, if any?Held: According to Article 2206, paragraph (1),
of the Civil Code, "the defendantshall be liable for the loss of the earning capacity of
the deceased and indemnityshall be paid to the heirs of the latter." This Article,
while referring to "damages fordeath caused by crime or quasi-delict," is expressly
made applicable by Article 1764"to the death of a passenger caused by the breach of
contract by a commoncarrier." The deceased, Pedro Davila, Jr., was single and 30
years of age when he died. Atthat age one's normal life expectancy is 33-1/3 years,
according to the formula (2/3x [80-30]) adopted by this Court in the case of Villa
Rey Transit, Inc. vs. Court of Appeals on the basis of the American Expectancy Table
of Mortality or the Actuarialof Combined Experience Table of Mortality. However,
although the deceased was inrelatively good health, his medical history shows that
he had complained of andbeen treated for such ailments as backaches, chest pains
and occasional feelings of tiredness. It is reasonable to make an allowance for these
circumstances andconsider, for purposes of this case, a reduction of his life
expectancy to 25 years.In the same case of Villa Revenue Transit this Court stated:"...
earning capacity, as an element of damages to one's estate for his death bywrongful
act is necessarily his net earning capacity or his capacity to acquiremoney, less the necessary
expense for his own living. Stated otherwise, the amountrecoverable is not loss of
the entire earnings, but rather the loss of that portion of the earnings which the
beneficiary would have received. In other words, only netearnings, not gross
earnings, are to be considered, that is, the total of the earningsless expenses
necessary in the creation of such earnings or income and less livingand other
incidental expenses."Considering the fact that the deceased was getting his income
from three (3)different sources, namely from managing a radio station, from law
practice andfrom farming, the expenses incidental to the generation of such income
werenecessarily more than if he had only one source. Together with his living
expenses,a deduction of P600.00 a month, or P7,200.00 a year, seems to Us
reasonable,leaving a net yearly income of P7,800.00. This amount, multiplied by 25
years, orP195,000.00 is the amount which should be awarded to the plaintiffs in
thisparticular respect.
 Jose MENDOZA vs. PAL
No. L-3678, Feb 29, 1952
J. Montemayor
DOCTRINE:

Common carriers are not obligated by law to carry and to deliver merchandise, and persons are not
vested with the right of prompt delivery, unless such common carriers previously assume the obligation.
Said rights and obligations are created by a specific contract entered into by the parties.

FACTS:

Jose Mendoza was the owner of the Cita Theater in Naga, Camarines Sur. Appellant, taking
advantage of the fiesta or town holiday of the City of Naga, held on September 17 and 18, yearly, which
was usually attended by many people, decided to exhibit a film which would fit the occasion and have a
special attraction and significance to the people attending said fiesta. A month before the holiday, he
contracted with the LVN pictures, Inc., a movie producer in Manila for him to show during the town fiesta
the Tagalog film entitled "Himala ng Birhen" or Miracle of the Virgin. He made extensive preparations
including advertisements.

On September 17, 1948, LVN pictures delivered to the defendant Philippine Airlines (PAL a can
containing the film "Himala ng Birhen" consigned to the Cita Theater. However, For reasons not explained
by the defendant, but which would appear to be the fault of its employees or agents, this can of film was
not unloaded at Pili Air Port a little after four o'clock in the afternoon of September 17th and it was brought
back to Manila. Mendoza received it on September 20 and exhibited the film but he had missed his
opportunity to realize a large profit as he expected for the people after the fiesta had already left for their
towns.

Consequently, Mendoza brought this action against the PAL. The lower court held that PAL is
not liable.

ISSUES:

(1) WON Mendoza, PAL, and LVN Pictures entered into a contract of transportation.

(2) WON PAL may be held liable for damages.

RULING:

(1) Yes, they entered into a contract of transportation.

Common carriers are not obligated by law to carry and to deliver merchandise, and persons are not
vested with the right of prompt delivery, unless such common carriers previously assume the obligation.
Said rights and obligations are created by a specific contract entered into by the parties. In the present
case, the findings of the trial court which as already stated, are accepted by the parties and which we
must accept are to the effect that the LVN Pictures Inc. and Jose Mendoza on one side, and the
defendant company on the other, entered into a contract of transportation.

Here, the contract of carriage between the LVN Pictures Inc. and the defendant carrier contains the
stipulations of the delivery to Mendoza as consignee. His demand for the delivery of the can of film to him
at the Pili Air Port may be regarded as a notice of his acceptance of the stipulation of the delivery in his
favor contained in the contract of carriage, such demand being one of the fulfillment of the contract of
carriage and delivery. In this case he also made himself a party to the contract, or at least has come to
court to enforce it. His cause of action must necessarily be founded on its breach.
(2) No, PAL may not be held liable for damages. The trial court correctly found that the defendant
company could not have foreseen the damages that would be suffered by Mendoza upon failure to deliver
the can of film on the 17th of September, 1948 for the reason that the plans of Mendoza to exhibit that
film during the town fiesta and his preparations, specially the announcement of said exhibition by posters
and advertisement in the newspaper, were not called to the defendant's attention.

In the similar case of Chapman vs. Fargo, a New York case,it was held: "but before defendant
could be held to special damages, such as the present alleged loss of profits on account of clelay or
failure of delivery, it must have appeared that he had notice at the time of delivery to him of the particular
circumstances attending the shipment, and which probably would lead to such special loss if he
defaulted."

The decision appealed from is affirmed.

Marchan vs. Mendoza
G.R. No. L-24471

FACTS

A passenger bus of the Philippine Rabbit Bus Lines, driven by Silverio

Marchan, fell into a ditch while travelling on its way to Manila. As a result of
which respondents Arsenio Mendoza, his wife and child, passengers of the
said bus were thrown out to the ground resulting in their multiple injuries. It
was proven that the bus was traveling at high speed without due regard to
the safety of its passengers and that passengers complained and asked
Machan, the driver to slow down. On the contrary, Marchan increased its
speed while approaching a truck which was then parked, apparently to avoid
collision with the incoming vehicle from the opposite direction. The rear tires
of the bus skidded because of its high speed which caused the bus to fall into
a ditch. Subsequently, Marchan was convicted for physical injuries through
reckless imprudence.

ISSUE

Whether or not Marchan and Philippine Rabbit Bus Lines are liable for the
injuries suffered by its passengers.

RULING

The Supreme Court held that the proximate cause of the accident was the
gross negligence of Marchan who when driving is expected to have employed
the highest degree of care. He should have been assiduously prudent in
handling his vehicle to insure the safety of his passengers. There is no reason
why he shouldn’t stop the vehicle upon noticing a parked truck in front of
him. He must have taken precautionary measures in securing the safety of
his passengers. Philippine Rabbit is also liable because common carriers
cannot escape liability for the death or injuries to passengers through the
negligence and willful acts of the former's employees, although such
employees may have acted beyond the scope of their authority or in
violation of the orders. The awarding of compensatory damages is
reasonable because Arsenio Mendoza had suffered paralysis on the lower
extremities, which will incapacitate him to engage in his customary
occupation throughout the remaining years of his life. The awarding of
exemplary damages likewise is found just although the plaintiffs did not
specify such claim. The court is called upon the exercise and can use its
discretion in the imposition of punitive or exemplary damages even though
not expressly prayed or pleaded in the plaintiffs' complaint.
Northwest Airlines, Inc. vs. Cuenca
FACTS:
 Respondent Nicolas L. Cuenca (Cuenca) was the Commissioner of Public
Highways; he was the official delegate of the Philippines to a conference
in Tokyo and, thus, he purchased a first class ticket from petitioner
Northwest Airlines, Inc. (Northwest). His ticket was marked “W/L”
meaning he was waitlisted but his attention was never called thereto and
he wasn’t advised what it meant.
 Cuenca was given first class accommodation upon boarding the plane
in Manila but, upon arrival at Okinawa, he was transferred to the tourist
class. Although he revealed that he was traveling in his official capacity,
an agent of Northwest rudely compelled him in the presence of other
passengers to move, over his objection, to the tourist class, under threat
of otherwise leaving him in Japan.
 Cuenca brought suit in the CFI in Manila which held Northwest liable for
damages; this was affirmed by the CA.
ISSUES:
1. Whether Cuenca have a cause of action against Northwest? – YES
2. Whether the award of nominal damages proper? – YES.
HELD:
1. Petitioner argues that pursuant to those provisions, an air "carrier is liable
only" in the event of death of a passenger or injury suffered by him, or of
destruction or loss of, or damage to any checked baggage or any goods, or of
delay in the transportation by air of passengers, baggage or goods. This
pretense is not borne out by the language of said Articles. The instances
specified in Arts. 17-19 of the Warsaw Convention merely declare the carrier
liable for damages in the enumerated cases, if the conditions therein
specified are present.
 Neither said provisions nor others in the aforementioned Convention
regulate or exclude liability for other breaches of contract by the carrier.
Otherwise, an air carrier would be exempt from any liability for damages
in the event of its absolute refusal, in bad faith, to comply with a contract
of carriage.
 Thus, Cuenca has a cause of action for breach of contract against
Northwest.
2. The award of nominal damages is proper considering that the CA has
adjudicated no compensatory, moral, and exemplary damages to Cuenca.
 Also, it is proper considering the following circumstances:
o Cuenca was never advised that he was merely waitlisted;
o After having been given first class accommodation in Manila, Cuenca
was entitled to believe that his first class reservation was confirmed
and would continue until his ultimate destination, Tokyo;
o Notwithstanding this, Northwest rudely breached the contract, even
with full knowledge of the fact that Cuenca was an official
representative of the Philippines; Northwest never explained that the
person to whom Cuenca’s first class seat was given had a better right
thereto.
 At any rate, considering the Northwest’s agent had acted in a wanton,
reckless, and oppressive manner, said award may also be considered as
one for exemplary damages.
Arts. 17-19 of the Warsaw Convention
ART. 17. The carrier shall be liable for damages sustained in the event of the
death or wounding of a passenger or any other bodily injury suffered by a
passenger, if the accident which caused the damage so sustained took place
on board the aircraft or in the course of any of the operations of embarking
or disembarking.
ART. 18. (1) The carrier shall be liable for damage sustained in the event of
the destruction or loss of, or of damage to, any checked baggage, or any
goods, if the occurrence which caused the damage so sustained took place
during the transportation by air.
(2) The transportation by air within the meaning of the preceding paragraph
shall comprise the period during which the baggage or goods are in charge of
the carrier, whether in an airport or on board an aircraft, or, in the case of a
landing outside an airport, in any place whatsoever.
(3) The period of the transportation by air shall not extend to any
transportation by land, by sea, or by river performed outside an airport. If,
however, such transportation takes place in the performance of a contract
for transportation by air, for the purpose of loading, delivery, or
transhipment, any damage is presumed, subject to proof to the contrary, to
have been the result of an event which took place during the transportation
by air.
ART. 19. The carrier shall be liable for damage occasioned by delay in the
transportation by air of passengers, baggage, or goods.
8 People v Oandasan Jr.
G.R. No. 194605 | June. 14, 2016 | J. Bersamin
Topic: Concept of Actual or Compensatory Damages
Summary: The defendant murdered 3 people. He presented an
alibi that was overturned by positive identification of a witness. The
Court also appreciated the aggravating circumstance of treachery
which the lower court did not do. In deciding on the damages to be
imposed to the defendant, the Court outlined the jurisprudential
history of the value of death indemnity. The Court also outlines
pertinent provisions in determining the value of death indemnity.
Doctrine: The Court can change the value of death indemnity
according to the value of the currency at the time the judgement is
rendered. Also please read the Court’s spiel about death indemnity
at the lower part of the digest.
Facts:
As gathered by the Court of Appeals
1. Edgardo Tamanu, Danilo Montegrico, and Mario Paleg were
shot by Oandasan while they were having a drinking spree
with witness Ferdinand Cutaran.
2. Danilo Montegrico and Edgardo Tamanu (murder) died while
Mario Paleg survived (frustrated murder due to timely
medical intervention).
3. Two other witnesses were present during the commission of
the crime.
As alibi presented by defendant Oandasan
1. During the day of the murder, Oandasan was in Cavite and
reported to work from 7AM to 5PM. To bolster this, he
presented a time record sheet and an employment
certificate.
2. Oandasan said that he and Cutaran had a misunderstanding
when he worked in Navarro Construction, the same
company that the Cutaran worked in.
3. Oandasan said that he caught Cutaran stealing sacks of
cement and prevented them from doing so. Then, Cutaran
plotted to kill him.
4. Another alleged witness, Escobar, stated that the man who
shot the victims was shorter in stature than defendant
Oandasan.
Issues:
1. Whether or not the alibi of Oandasan overcomes the
witness’ positive identification of him?
2. Whether or not treachery was an attendant circumstance in
each murder?
3. Important: What is the amount of damages that is
proper for the indemnification of the victims and their
heirs?
Ratio:
1. No.
a. As stated by the Court of Appeals: In the case at bar,
appellant failed to prove the element of physical
impossibility for him to be at the scene of the crime
at the time it took place. His alibi that he was in
Cavite and the employment certificate and time
record sheet which he presented cannot prevail over
 the positive and categorical testimonies of the
prosecution witnesses.
b. Alibi is the weakest defense not only because it is
inherently weak and unreliable, but also because it
is easy to fabricate. It is generally rejected when
the accused is positively identified by a witness.
2. Yes.
a. The following requisites for the appreciation of the
aggravating circumstance treachery is present in the
case. These requisites are a) that the means of
execution employed gave the person attacked no
opportunity to defend themselves, and b) that such
means of execution were deliberately adopted by
the accused without danger to his person.
b. Even though it is contested that the witnesses did
not directly see the shooting of the two other victims,
it is sufficiently established by circumstantial
evidence. The court decides on the sufficientness of
the quantity of circumstances for every case1.
3. Keep reading.
In determining the value of damages with regard to
crimes of murder, the following provisions is
considered by the Court.
1) Art. 2206 of the Civil Code
2) Art. 2202 of the Civil Code preceded by Section 1 of
Commonwealth Act 284
(reproduced below)
1 Jurisprudential basis
The following amounts were determined by the court.
1) To the heirs of Danilo Montegrico, civil indemnity of
P75,000.00; moral damages of P75,000.00; exemplary
damages of P75,000.00; and temperate damages of
P50,000.00;
2) To the heirs of Edgardo Tamanu, civil indemnity of
P75,000.00; moral damages of P75,000.00; exemplary
damages of P75,000.00; and temperate damages of
P50,000.00; and
3) To Mario Paleg, civil indemnity of P50,000.00; moral
damages of P50,000.00; exemplary damages of
P50,000.00; and temperate damages of P25,000.00.
This is justified by the following arguments.
1) Historically, the threshold of death indemnity was set at
P3,000 as the least amount and P75,000 pesos as the most
amount. In recent times, the Court had set death indemnity
at P50,000 and P75,000 in different instances.
(reproduced below)
a) This is due to the consideration of the difference of
the value of currency between the time of
promulgation of the Civil Code and the modern times
as stated in People v Pantoja.
2) Temperate damages should be awarded to the heirs of the
murdered for the interment of the deceased, and to the
injured for hospitalization fees (basis: People v Jugueta).
3) Moral damages are awarded even without proof or
allegation if the victim dies as a result of the crime (basis
missing, the case says it is a “matter of law”)
 4) Art 2230 authorizes the award of exemplary damages if an
aggravating circumstance is present.
Addendum
Article 2206. The amount of damages for death caused by a crime
or quasi-delict shall be at least three thousand pesos, even though
there may have been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning
capacity of the deceased, and the indemnity shall be paid to the
heirs of the latter; such indemnity shall in every case be assessed
and awarded by the court, unless the deceased on account of
permanent physical disability not caused by the defendant, had
no earning capacity at the time of his death;
(2) If the deceased was obliged to give support
according to the provisions of article 291, the recipient who is not
an heir called to the decedent's inheritance by the law of testate or
intestate succession, may demand support from the person causing
the death, for a period not exceeding 6ve years, the exact duration
to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants
and ascendants of the deceased may demand moral damages for
mental anguish by reason of the death of the deceased.
Article 2202. In crimes and quasi-delicts, the defendant shall be
liable for all damages which are the natural and probable
consequences of the act or omission complained of. It is not
necessary that such damages have been foreseen or could have
reasonably been foreseen by the defendant.
Court’s spiel about death indemnity (please read)
It is again timely to raise the civil indemnity for death arising
from crime or quasi-delict. We start by reminding that human life,
which is not a commodity, is priceless.The value of human life is
incalculable, for no loss of life from crime or quasi-delict canever be
justly measured. Yet, the law absolutely requires every injury,
especially loss of life, to be compensated in the form of damages.
For this purpose, damages may be defined as the pecuniary
compensation, recompense, or satisfaction for an injury
sustained, or, as otherwise expressed, the pecuniary
consequences that the law imposes for the breach of some
duty or the violation of some right. As such,damages refer to
the amount in money awarded by the court as a remedy for
the injured. 61 Although money has been accepted as the most
frequently used means of punishing, deterring, compensating and
regulating injury throughout the legal system, it has been
explained that money in the context of damages is not
awarded as are placement for other money, but as substitute
for that which is generally more important than money; it is the
best thing that a court can do. Regardless, the civil indemnity for
death, being compensatory in nature, must attune to
contemporaneous economic realities; otherwise, the desire to
justly indemnify would be thwarted or rendered meaningless.
This has been the legislative justification for pegging the
minimum, but not the maximum, of the indemnity.
  

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ht ea  maku
makulo loetethr
hryy ov`m
ov`moeoeko
ko whs
whs pros prosoe
oeto
tomm ta prav
pravoo tfo
tfo hlau
hlauet et.. ]fo
]fo h pors
porsae ae,,  Hphr
Hphrrhrh tf
tfoe
oe ca
cast
st kaet
kaetraracc ag tf
tfoo tr
truk
ukii hem
hem `t go
gocc
cc
khso
khso tftfoe
oe  woet
woet up ta [K hem hem [K fo focmtfh
cmtfhtt tfotfo hwhr
hwhrm m aghkt
aghktuhuhcc mh
mhlh lhjo
joss gar 
gar  agg tfo wfhrg.
ca
cass
ss ag  oh ohre
re`e
`ejj kh
khp p hhk`
k`ty
ty sfsfaau cm
cm d o hw hwhr
hrm m oom
m dokokhu
huso
so tfo
tfo tost
tost`l`la aee`h
`hcc m. Ta
Tamamacg cga
a hem
hem  La
Laehehc`c`sh
sh m`m`om
om wf`c
wf`coo Nafh
Nafhee
eehh hem
hem Hdoc
Hdocch
cheh
eh
ov`m
ov`moe
oekoko `e  tftfoo garl
garl ag Ta Tamamacg
cga‐
a‐ss olp
olpca cayo
yor‐
r‐ss to
tost
st`l
`lae
aeyy wh
whss sugg
sugg`k`k`o
`oet
et ta woro `enurom.
 pravo tfo  hlauet tfht kaucm do hwhrmom. ]fo [K hcsa prav`mom gar tfo 4. 4 khs
khsos
os wo
wororo g`
g`co com>
m>
ga
garl
rluc
uchh ga
garr  ca
cass
ss ag oh
ohrere`e
`ejj kh
khph
phk` ty>>   Y4/; x (62 - hjo ht t`lo ag mohtf)
k`ty h. KrKr`l`l`e `ehc
hc ka
kalp
lpch ch`e
`ett  ga
garr Toki
Tokicocoss
ss @l
@lpr
prum
umoe
oeko
ko rosu
rosuct
ct`e
`ej
j ta
x (jrass heeuhc `ekalo - ro hsaehdco hem eokosshry c`v`ej oxpoesos)\ maud
maudco co fal`
fal`k` k`mo
mo  hem
hem Lu Luctct`p
`pco
co @e
@enu
nur`
r`os
os hem
hem Mhlh
Mhlhjo jo ta
Maktr`eo> Chki Chki  a g m a akukulo
loe ethry
thry ovov`m
`moe oeko
ko `s e at at ghth
ghthcc ta h. Kc
Kch`
h`l l gar
gar tfo
tfo Rraporty hjh`est Hphrrh hem Khdhccos.
moko
mokohshsom
om‐s‐s cast
cast  ohre
ohre`e`ej j khph
khphk`k`ty
ty.. ]ost
]ost`l `lae
aey y gral
gral h kalpkalpot otoe
oett w`te
w`teos osss  d. Kalpch`et gar  mhlhjos hjh`est Hpphrh, Khdhccos, hem
gh
ghl`
l`c`
c`hr
hr w`tf
w`tf  f`s
f`s sh
shchchry
ry `s h su sugg
gg`k
`k`o
`oet et dh
dhs`
s`ss ta momototorl
rl`e
`eoo tf
tfoo mo
mokokohs
hsom
om‐s‐s [`lacmo
`ekalo dogaro f`s mohtf.   ;. T]K fo cm cm  h cccc tfroo c`hdco gar hktuhc mh l lhhjos, l ararhc mhlhjos,
c`
c`t`
t`jh
jht`
t`ae
ae oxpo
oxpoes esos,
os,  ht
htty
tyss goos
goos hehem m oxolp
oxolpch chry
ry mh
mhlhj
lhjosos.. He hp
hppo
pohc
hc

whs g`com.
h. JrJras
assc
scy
y eo
eojc
jc`j
`joe
oett do
dokhu
khuso
so Khdh
Khdhcc
ccos
os nu
nust
st hc
hcca
cawo
wom
m Hphrr
Hphrrhh ta
GHK][> tfo `ek`moet fhppoeom 8060 ph
mr
mr`v
`voo tf
tfoo  tr
truk
ukii mosp
mosp`t
`too ieaw
ieaw`e `ej
j tf tfht
ht tf
tfoo ra
rahm
hm whs
whs rarauj
ujff
8. W`v`
W`v`hehe‐s
‐s fu
fusdsdhe
hem,
m,  Tama
Tamacgcga,
a, hehemm mh
mhuj
ujft
ftor
orss Laeh
Laehc` c`sh
sh he
hemm Nafh
Nafheeeeh,
h, hem tfht Hphrrh aecy fhm h stumoet‐s porl`t
hr
hrr`
r`vo
vom
m w`tf
w`tf  go goca
cal`
l`eh
eh Hdoc
Hdocchcheh
eh ht tfo
tfo lue`
lue`k` k`ph
phcc wf
wfhrhrgg ag NoNoth
thgo
go..  d. [`lacmo whs  c`hdco hs olpcayor gar gh`c`ej ta oxork`so
]foy khlo gral Kodu hdahrm h latardaht aweom dy [`lacmo. MM[[
h. Hgt
Hgtor tfoy
tfoy  m `so
`sold
ldhrhri iom
om,, tfoy
tfoy woro
woro wh`t
wh`t`e`ej
j ga r h v oof f`kco
`kco =. KH hgg`
hgg`rl
rlom
om  tf
tfoo nu
nummj loe
loett w`tf
w`tf tftfoo la
lam m ``g`
g`kh
kht`
t`a
a e ag m oco
ocot`
t`e
ej tftfoo
tfht
tfht wauc
waucm m  trhe
trhesp
spar
artt tfol
tfol ta tfo
tfo padc
padchk
hk`a`ae
e ag No Noth
thgo
go dut
dut hktuhc mhlhjos gar Tamacga‐s cass ag ohre`ej khphk`ty.
sa
saa a e gau
gau em
em  au t tf hhtt tfo
tfo kh
khrj
rja
a tru
tru ki
ki a we
weom dy [ ``la laccm o h. Hkka
Hkkarmrm``e j ta  tf o KH
KH,, m aaku
kuloloeethry
thry ov`m
ov`moe
oeko
ko sfa
sfau ccm
m do
whs
whs tfo tfo  ae cy
cy vofof`k
`kco
co tfht
tfht wau
wau cm
cm oet
oetor tfo
tfo wfhr
wfhrgg. ]f ]foy
oy  prosoetom ta  sudsthet`hto h kch`l gar cass ag ohre`ej
tf ooe
e ol
old dhri
hri oom
m  a e tfo
tfo wfhr
wfhrgg mos
osp p`to
`to tfo
tfo ghkt
ghkt tfht
tfht `t whs
whs khp
khphk`
hk`ty
ty.. @e  tf
tf``s khso
khso,, ae ccy
y tf
tfoo tost`
ost`la
lae e y a g Ta
Tamma ccga
ga‐s
‐s
avorkr
orkraawmom
wmom he hem
m  tfht
tfht tfor
tforoo woro
woro ea prap rap oorr so
sohthtss ht tfo
tfo olpcayor hs ta f`s shchry whs sudl`ttom `eta ov`moeko.
 

 d. Foeko tf`s Rot`t`ae. h.

]fo shlo  rucos ae mhlhjos hro hppc`khdco wfotfor  
@[[_O> ar eat  tfo mohtf akkurrom hs h rosuct ag h kr`lo ar h
8. Z/E hktuhc  mhlhjos gar cass ag ohre`ej khphk`ty sfaucm do quhs`-moc`kt.
hwhrmom - PO[ ;. ]a sullhr`zo
sullhr`zo,, tfo fo`rs hro oet`tco oet`tcomm ta rokavor>
rokavor>
h. @e
@emo
mole le`t`ty gar  tf
y gar tfoo mohtmohtff   - R84i
R84i w`
w`tf
tfau
autt tf
tfoo eo
eoom
om aghey
T_C@EJ>   La m mg`
g`om
om..  ATMO
ATMOTO TOMM ta p hhyy sa
sac`
c`m
mhr`c
hr`cy
y pot`t
ot`t`a
`ae
eor W`v
W`v ``he
he D. ov`moeko ar  praag ag mhlhjos, ovoe tfaujf w`tf
]arroae tfo hlaue
hlauets ts l`t`jht`ej k`rkulsthekos. (Eaw R?2i)
H. R?2,222.22  hs k`v`c `emole`ty gar tfo mohtf ag Tamacga d. @e
@em
mole
ole `ty`ty gar  tfo
tfo c ass ass ag ohre
ohre``e j khp
khphk ty - hl
hk`` ty hlau
auet
et ta
]arroae9  do xom  dy tfo kaurt hkkarm`ej ta tfo k`rkulsthekos ag 
D. R?2,222.22 hs  k`v`c `emole`ty gar tfo mohtf ag Laehc`sh tfo mok oohhsom  ro cchh ttoom ta f`s hktuh c `ekalo ht tfo t`lo
]arroae9 ag mohtf  hem f`s pradhdco c`go oxpoktheky, tfo sh`m
K. R8,080,:22.22 hs  hk tu tuhc mh l
lhhjos gar Tamacga ]arroae' s cast `emole`ty ta  do hssossom hem hwhrmom dy tfo kaurt
ohre`ej khphk`ty9 hs h  lhttor ag muty, uecoss tfo mokohsom fhm ea
M. R822,222.22 hs  larhc mhl hj hjo s kalpasom ag R?2,222.22 gar   ohr
ohre ``e
ej khp
khphk`
hk`ty  ht sh`m sh`m t`lo
t`lo a e hk
hkka
kauue t ag porlh
orlheeoet
oet
Tama
Tamacgcga
a ]arr
]arroaoae'
e'ss  fo
fo`r
`rss hem
hem R?2,
R?2,22
222.
2.22
22 gar
gar Laeh
Laehc` c`sh
sh ]a
]arr
rroaoae'
e'ss m`sh d
d``c`ty eat  khusom dy tfo hk kku uso m.
m. @g tfo mokoh ssoom
fo`rs9 whs adc`jom  ta j`vo suppart, uemor Hrt. 408, K`v`c
O. R82,222.22 h s  o x xool p
pcchry mh llhhjos9 R822,222. 22
22 hs httareoy Kamo, tfo  rok`p`oet wfa `s eat he fo`r, lhy molhem
goos9 hem suppart gral  tfo h kkkkus om
om gar eat laro tfh e vo yoh rs
rs,
G. R?2,22
R?2,222.2
2.22
2 hs c`t`jht`
c`t`jht`ae
ae oxp
oxpoes
oesos.
os. tfo oxhkt murht`ae ta do g`xom dy tfo kaurt.
He `etorost  ht tfo cojhc rhto ag s`x porkoet (7%) por heeul k. Larhc mhlhjos  gar lo e etthc h e
ej
ju`sf, ” he hlauet ta
sfhc
sfhccc hcsa
hcsa  d o `l
`lppa
aso
som
m a e tfo
tfo ta tthc
hc num
numjloe
loet hwhr
hwhrm
m kalp
kalpu uto
tom
m gr
gra
al tf
tfoo  do g`xom  dy tfo kaurt. ]f`s lhy do rokavorom ovoe
ehc`ty ag tf`s mok`s`ae uet`c `ts hktuhc phyloet. [A ATM  dy tfo  `ccoj`t`lhto moskoemhets hem hskoemhets ag tfo
mokohsom.
TH]@A> m. Oxo l lp
pchry mh lh
lh j joos,  wfoe tfo kr`lo `s httoemom dy
 Hktuhc mhlhjos gar cass ag ohre`ej khphk`ty
khphk`ty whs w`tf sugg`k`oet dhs`s. ae o a r  larohj
larohjjj rrhv
hvht
ht`e
`ejj k`k`rk
rku
ulsth
lstheekos,
kos, ” he hl
hla
au et
et
K`v`c @emole`ty ta do  g`xom `e tfo m`skrot`ae ag tfo kaurt, tfo shlo ta
8. Hrt.
Hrt. 48:7
48:7  pr
prav
av`m
`mos
os tfht
tfht tfas
tfasoo ka
kall`
ll`tt
tt`e
`ej
j hkts
hkts kaes
kaestr
truk
ukt`
t`ej
ej h qu
quhs
hs``  do kaes`morom sophrhto gral g`eos.

4. moc`kt
]fo Khro
`v`cc`hdco
  Kamotafphy
acmsmhlhjos.
[`lacmo c`hdco gar tfo mhlhjos tfht f`s o. h ttta
hkt
hk urhhce
c ohla
y'sau e
hl gto  otsf ooro
et haegg,
roa m, (d
ouxtpoaeecy
(du escy
os wfoe
wfaoe
g ch`t`sop
so hr eo- k`
jhpthrht
`ahto tvf``coc
k`v
hkt`aes fhvo  k huhus om
om. Hrt`kco 4427 spok`khccy h p
pp
pc`o s wfo e h hkt`ae ta  rokavor k`v`c c`hd`c`ty fhs dooe g`com ar  
mohtf akkurs hs h rosuct ag h kr`lo ar h quhs`-moc`kt.8 wfoe oxolpchry mhlhjos hro hwhrmom).
g. @etorosts `e  tfo prapor khsos. @t lust lust d o olpolpf hhs`
s`zo
zom m
tfht tfo `emole`t`os gar cass ag ohre`ej
8
 Hrt`kco  4427.  ]fo hlauet ag mhlhjos gar mohtf hlauet ag mhlhjos gar   j. @t lust  do olpfhs`zom tfht tfo   `emo `emole
le`t`t`o
`oss ga
garr ca
cass
ss
mohtf khusom  dy h kr`lo ar quhs`-moc`kt sfhcc do ht cohst ]froo tfaushem ag o h hrre`ej  k h hp phk `t `ty ag tfo mokoh ssoom hem gar   larhc
hem gar 
posa
posas,s, ovoe
ovoe  tfau
tfaujf
jf tfor tforoo lhy
lhy fhvodoo
fhvodooe e l`t`
l`t`jh
jht`
t`ej
ej k`rk
k`rkul
ulststhe
heko
kos.
s. @e hmm`
hmm`t`
t`ae
ae mh l lhhjos hro    rokavorhdco   sophrhtocy gral hem `e
(8) ]fo  mogoemhet sfhcc do c`hdco gar tfo cass ag tfo ohre`ej k h hp
phk`ty ag tfo
mokohsom khphk`ty  ag tfo mokohsom, hem tfo `emole`ty sfhcc do ph`m ta tfo
fo`rs ag  tfo chttor9 sukf `emole`ty sfhcc `e ovory khso do hssossom hem m`shd `c`c`ty e at
at  khu so
so m dy tf o mogoe mh
mhe t,t, fh m e a oh re
re`e j khph k
k``ty h t tfo t`lo ag  
h wh
wh rm
rm om
om d y  tf o k au
au rrtt , u ec
ec os
os s tf o m ok
ok oh
oh so
so m a e h kk
kka ue
ue t a g p or
or l
lh
heeo
o et
et p fy
fys ``k
k hc
hc f`s mohtf9
 

hm
hmm`
m`t`
t`ae
ae ta  tfo
tfo g`g`xo
xom
m su
sul
l ag R84,
R84,22
222.
2.22kar
22karro rosp
spae
aem`
m`ej
ej sfaucm do  hppc`om `e tfo hdsoeko ag praag `e torls ag  
ta tfo  `emole`ty gar tfo saco ghkt ag mohtf h e em
m tfht stht`st`ks hem hktuhr`hc prosoetom dy tfo pch`et`gg.
tfoso mhlhjos  lhy, fawovor, do rospokt`vocy 84 FOTO,, tf
84.. FOTO tfoo  hwhrm
hwhrm ag hkt hktuh
uhcc mh
mhlhj
lhjos os ga
garr ca
cass
ss ag oh
ohrere`e
`ejj kh
khphphk`
k`ty
ty `s
`ekroh ssoom ar  cossoeom hkkarm`ej ta tfo l ``tt`jh tt``ej ar    prapor dokhuso  W`v`he whs hdco ta osthdc`sf for kch`l dy h
hjjrhvht`ej k`rkulsthekos,  oxkopt `tols 8 hem =  propaemorheko ag  ov`moeko tfru tfo tost`lae`hc ov`moeko prosoetom
hdavo, gar adv`aus rohsaes. `e tf
tfoo  ga
garl
rl ag Ta Tamamacgcga‐
a‐ss ol
olpcpcay
ayor
or‐s
‐s to
tost
st`l
`lae
aeyy hs ta Tama Tamacg cga‐
a‐ss
=. K`v`c ar  mohtf `emole`ty `s lhemhtary hem jrhetom ta tfo shchry.
fo`rs ag  tfo v`kt`l w`tfaut eoom ag praag atfor tfhe tfo h. [K pr prov
ov`a`aus
uscy
cy hkk
hkkopopto
tomm h ka
kalplpot otoe
oett w`
w`te
teos
oss‐s‐ to
tost
st`l
`laeaeyy ta
kall`ss`ae ag tfo kr`lo. moto
motorlrl`e`eoo tf
tfoo  moko
mokohshsom
om‐s
‐s `e
`eka
kalo
lo.. @e aeo
aeo kh khso
so,, `t wh
whss tftfoo
?. FOTO, tftfoo  rosp
rospae
aemo
moet
etss hro
hro c`hd
c`hdco
co ta phy
phy Tama
Tamacg
cga‐
a‐ss fo
fo`r
`rss R?2i
R?2i he
hem
m w`
w`mamaww ag  tf tfoo moko
mokohs hsom
om,, `e heheatatfo
for,
r, tf
tfoo kaka-w
-warario
iors
rs.. [K
heatfor R?2i ta heswor gar tfo mohtf ag Laehc`sh. sh
sh`m
`m,, `g  ka
ka-w
-warario
iors
rs‐‐ to
tost
st`l
`lae
aey y wa
waucucmm hppc
hppcy, y, hc
hccc tf
tfoo laro
laro
sfaucm he opcayor‐s.
Hktuhc Mhlhjos gar Cass ag Ohre`ej Khphk`ty  d. ]ost`lae`hc ov`moeko,  `g eat quost`aeom gar krom`d`c`ty,
   Rosthøa, tfo Kaurt
7. @e  Rosthøa, Kaurt hpp
hppc`o
c`om
m Hrt.
Hrt. 4427
4427 hem hwhrmom
hwhrmom kal
kalpoe
poesht`
sht`ae
ae  dohrs tfo  shlo wo`jft hs makuloethry ov`moeko.
ga
garr tftfoo  moko
mokohs
hsom
om‐s
‐s cast
cast oh
ohre
re`e
`ej
j khph
khphk`
k`ty
ty `e hm
hmm`
m`t`
t`ae
ae t tf
tfoo hw
hwhr
hrm
m ag  ]ost
]ost`l`la aee`o
`oss j`v`voe
oe  d y tf tfoo mokoh
okohsosomm's   spauso,
spauso, phrophroet,
et,
k`v`c `emole`ty. ar kf`cm  sfaucm do j`voe wo`jft dokhuso tfoso
h. ]fo `emole`ty  gar tfo mokohsom's cast ohre`ej `em`v`muhcs hro  prosulom ta ieaw tfo `ekalo ag  
khphk`ty `s  lohet ta kalpoeshto tfo fo`rs gar tfo tfo`r spauso, kf`cm, ar phroet.
`e kal
kaloo tfoy
tfoy  wa wau u ccm
m f hvo
hvo roroko
ko`` vom
vom f hm hm tftfoo m oko
okohs
hsom
om 8;. ]f`s `s  h   st
stop
op-d
-dy-
y-st
stop
op juju`` mo
mo ta kal
kalp u uto
to he hw
hwhr
hrm
m gar
gar c a
ass
ss
kaet`euom ta c`vo. ag o hr
hre`ej khphk`ty>
:. Ghk
hkta
tars
rs tf
tfht
ht  sf
sfau
aucc m do thi
thioe ` eeta
ta hk
hkka
kauue ett ` e m ooto
torl
rl`` e`
e` ej
ej tf
tfoo `. [udt
[udtrhk
rhktt tf
tfoo hj
hjoo ag tf
tfoo mokoh
mokohso
som
m gral
gral 62.
62.
kalpoeshdco hlauet ag cast ohre`ejs> ``. Luct`pcy tfo  heswor `e (8) dy 4, hem m`v`mo
h. Euldor ag  yohrs gar w f f``kf tfo v`kt`l waucm atforw`so `t dy ; (tfoso aporht`aes, hro `etorkfhejohdco).
fhvo c`vom9 ```. Luct`pcy ?2%  ta tfo heeuhc jrass `ekalo ag  
 d. ]fo rhto ag cass susth`eom dy tfo fo`rs ag tfo mokohsom. tfo mokohsom.
6. Nu
Nur`
r`sp
spru
rum
moeko
oeko pravrav `m
`mos  tfhttf
tfhttfoo rsrstt ghkt
ghkta
a r, `.o.,,   c`go
r, `.o. c`go oxpokth
oxpokthekyeky, `v. Luct`pcy tfo  heswor `e (4) dy tfo heswor `e
`s kalputom  dy hppcy`ej tfo garluch (4/; x YY6 62 - hjo ht (;). ]f`s  `s tfo cass ag ohre`ej khphk`ty ta do

mohtf\). hwhrmom.
0. Hs ta  tfo   sokaem ghktar, `t `s kal p pu
uto m dy luct`pcy`ej tfo  d. Zfoe tfo   ov`moeko ae rokarm aecy sfaws laetfcy
c`go o x
xp
poktheky  dy tfo eot oh re re`ejs ag tfo mo kokohs oom
m, `.o., tfo jrass `ekalo,  heeuhc jrass `ek a al
lo `s mor`vom gral
ta thc
thc ohre
ohre``e j
jss  coss
coss oxp
oxpoeso
oesoss eokos
okossh
shrry `e tfo
tfo kroh
kroht`
t`a
a e ag susukf
kf luct`pcy`ej tfo  laetfcy jrass `ekalo dy 84. Zfoe
ohre`ejs ar  `ekalo hem coss c`v`ej hem atfor `ek`moethc tfo mh`cy  whjo `s tfo aecy `egarlht`ae prav`mom
oxpoes ooss. ]fo  eo t oh re re`ej `s arm`ehr`cy kalputom h t ?2% ag   mur`ej tr`hc,  s u
ukkf hlauet lh y do luct`pc`o m dy 472,
tfo jrass ohre`ejs. ar tfo  euldor ag usuhc warimhys `e h yohr, ta hrr`vo
82. ]fus, tfo  garluch usom dy tf`s Kaurt `e kalput`ej cass ag   ht heeuhc jrass `ekalo.
oh
ohre
re`e
`ej
j khpkhp hhk`
k`ty `s>>   Eo
ty  `s Eott Ohre
Ohre`e`ejj Kh
Khph phk` ty <   Y4/; x (62 -
k`ty 8= FOTO,, ]f
8=.. FOTO ]foo  w`
w`te
teos
osss sh
sh`m
`m tf
tfht
ht Ta
Tama
macg
cga
a whs
whs h jo
joeo
eorh
rhcc lh
lheh
ehjo
jorr ag ;
hjo ht  t`lo ag mohtf) x (jrass heeuhc `ekalo - rohsaehdco ag for
for  pfhr
pfhrlh
lhk`
k`os
os hs wo
wocc
cc hs su
supo
porv
rv`s
`sos
os aeo
aeo ag for
for hp
hphr
hrtl
tloe
oets
ts he
hemm
hem eokosshry c`v`ej oxpoesos)\. salo r`ko  g`ocms. Tamacga ohreom R8?i h laetf pcus 42%
88. ]fo garluch  prav`mom `e tfoso khsos `s prosulpt`vo, `.o., `t kall`ss`ae ae tfo eot prag`t. Tamacga whs =6 wfoe fo m`om.
 

8?. ]a moto rrl

l `e
`eo  f`s heeuh c jrass `ekal o, o, tf`s Kaurt luct`pc`o m ar tart.  [`eko tfo adc`jht`ae `e tf`s khso stols gral
f`s jrass  laetfcy `ekalo dy 84 ta jot tfo rosuct ag   h quhs`-moc`kt  hem eat gral h cahe ar gardohrheko ag  
R862,222.22. laeoy, tfo  `etorost hwhrmom ghccs uemor tfo sokaem
87. Kalput`ej gar c`go oxpoktheky, ar stops 8 hem 4, rosucts>  phrhjrhpf `ccustrhtom  `e Ohstore [f`pp`ej. ]f`s `s `e
C`go Oxpoktheky < 4/; x (62 - =6) c`eo w`tf  Hrt`kco 4488 ag tfo K`v`c Kamo w f f``kf sthtos
C`go Oxpoktheky < 4/; x (;4) tfht tf`s  Kaurt lhy `lpaso "`etorost hs h phrt ag tfo
C`go Oxpoktheky < 48.;; yohrs mh
mhlh
lhjo jos"
s" `e  ququhs
hs`-
`-mo
moc`
c`kt
kt kh
khso
sos.
s. Hw
Hwhr
hrm`
m`ej
ej tf
tf`s
`s `e
`eto
toro
rost
st
8:. Hppcy`ej f`s  c`go oxpokth e ekky h e
em
m heeuhc jrass `ekalo ta tfo `s m`skrot`aehry upae tfo kaurts.
joeorhc garluch, ar stop ;> k. ]f`s `s  m`ggoroet gral `etorost ae `etorost `lpasom
Cass ag Ohre`ej Khphk`ty < C`go Oxpoktheky x 8/4 heeuhc jrass `ekalo uemor Hrt`kco  4484 ag tfo K`v`c Kamo. @etorost ae
Cass ag Ohre`ej Khphk`ty < 48.;; x (R862,222.22/4) `etorost `s  lhemhtary hem `s `lpasom hs poehcty gar  
Cass ag Ohre`ej Khphk`ty < 48.;; x R02,222.22 tfo mochy `e tfo phyloet ag h sul ag laeoy.
Cass ag Ohre`ej Khphk`ty < R8,080,:22.22 m. Joeorhccy, tfo  K`v`c Kamo maos eat hccaw `etorost
86.
86. To
Tosp
spae
aemo
moet
etss hr
hroo  c`hd
c`hdco
co ta ph
phy
y R8,0
R8,080
80,:
,:22
22.2
.22
2 R8,0
R8,080
80,:
,:22
22.2
.22
2 ta up a
ae e ue cc``q u
u`m
`mht
htom
om  kc
kch`
h`ls
ls ar mhlhj
hlhjos
os ta d o roka
rokavv ooro
rom
m
kalpoeshto gar  tfo `ekalo Tamacga's fo`rs waucm fhvo uecoss tfoy  khe do osthdc`sfom w`tf rohsaehdco
roko`vom fhm fo c`vom. ko rt
rth ``e
ety. ]fo  rht`aehco gar tf`s `s dokh u usso `t waucm
80. Ae tfo  atfor fh e em
m, W`v`h e gh`co m ta pravo tfo h kkttuhc mhl hj
hjo s  do uegh`r  ta roqu`ro tfo c`hdco porsae ta phy `etorost
sfo suggorom  gar tfo mohtf ag fo r mhujfto r, r, Laehc`sh. W`v`he ae h  sul tfht `s yot ta do motorl`eom. Fawovor, tfo
lorocy tost`om  hs ta tfo gueorhc hem dur`hc oxpoesos sfo ka
kau
urts,
rts, `e  tf o `e `eto
toro
rost
st ag nu nust
st`k
`ko,
o, lhy
lhy `l`lppaso `e`ettoros
orostt
`ekurro m w`tfaut  pramuk`ej hey roko `p `pt ar atfor ov`moeko ta ae uec`qu`mhto m  kch`ls ar mhlh j joos upae numjl ooe et.
su
sup
p pa
part f or
or  kch`
kch`l.
l. Ka
Kae
e soq
soqu
uoe
oetc
tcy
y, sf
sfoo kh
khe
e ea
ea t do oe
oett`tco
`tcom
m ta he Dut
Dut fo
foro
ro  tf
tforo
oro `s ea eoeoomom ta `l `lpa
paso
so h la
larht
rhtar
ar`u
`ul
l `e
`eto
toro
rost
st..
hwhrm ag hktuhc mhlhjos ae hkkauet ag Laehc`sh's cass. Hktuhc mh l lh
h jojos  ta k alalpoesh to to gar tfo mok ooh hso mm''s
cast ohre`ejs  hro hcrohmy jrhetom. Rhyloet gar
 Httareoy‐s Goos hem Cojhc @etorost> Ta ma
ma cg
cga 's
's ca sstt  ohr e
e``ej k hp hphk`ty sfa uc ucm do oeaujf
8. Z`tf rospokt  ta tfo hwhrm ag c`t`jht`ae oxpoesos hem ta kavor tfo hktuhc mhlhjos suggorom dy f`s fo`rs.
httareoy's goos,  tfo K`v`c Kamo hccaws httareoy's goos ta do o. Kaurt ag  H p pp
pohcs k a arrrok ttccy `lpasom he `eto ro rost ae tfo
hwhrmom `g, hs `e tf`s khso, oxolpchry mhlhjos hro `lpasom.  numjloet hwhrm.  Fawovor, tfo 84% `etorost sfaucm

h.hKeaesh`m
`mwohr`remj  atfg o  Rp8ra
2t2r,h2k2to
to2.m22c`t`jhhst`ahtetaraegoytf`sgooms`s p
pu
u
hetom,  do lam`g`om.   thry
R`c`
R`c`p`
p`eh
ehs-
s-La
Laeo eoth ryGaccaw`ej
Dahr
Dahrmm  K`rk Dhejia
K`rkuc
uchr
hr Ea
Ea.. :0 [oetrhc
:07
7 mh
mhto
tom
m Lh
Lhyejy
R?2,222.22 gar  c`t`jht`ae oxpoesos hro hwhrmom ta 87, 428;,  tfo rhto ag cojhc `etorost `s eaw 7%.
W`v`he. Kaesoquoetcy,   tfo tfo  twoc
twocvo
vo p ork
orkoe
oett (84%
(84%)) por heehee ul
ul
4. ]foro `s  h eoom ta lam`gy tfo `etorost `lpasom dy tfo Kaurt coj hc
hc `etor oosst  sfhcc hppcy aecy uet`c N ue ueo ;2 , 4 2
28
8; .
ag Hppohcs. Kalo Nucy  8, 428; tfo eow rhto ag s`x porkoet
h. @e `ts  Mok`s`ae, tfo Kaurt ag Hppohcs `lpasom 7% (7%) por  heeul sfhcc do tfo provh`c`ej rhto ag  
`etorost ae  tfo hwhrm ag mhlhjos hem h 84% `etorost `etorost wfoe hppc`khdco.
ae tfo
tfo  num
num jlo
jloe et hw
hwhr hrmm. ]f]foo Ka Kau u rrtt ag Hpp
Hpp ohc
ohcss usosomm hs ;. Kaesoquoetcy, tfo  ju`mo cc``eos ch ``mm mawe `e Ohstore [f`pp`ej
h ju`mo Ohstore [f`pp`ej v. Kaurt ag Hppohcs fhvo dooe hloemom>
 d. @etorost dy  why ag mhlhjos, hcsa ieawe hs larhtary h. Zfoe he  adc`jht`ae, rojhrmcoss ag `ts saurko, `.o.,
`etorost, `s  hccawom `e hk t`t`aes gar droh kkf f ag kaetrhkt ch
chw,
w, kakaet
etrh
rhkt
kts,
s,  qu
quhs
hs`-
`-ka
kaet
etrh
rhkt
kts,
s, mo
moc`
c`kt
ktss ar qu
quhs`
hs`-m
-moc
oc`k
`kts
ts
 

`s drohkfom,  tfo kaetrhvoear khe do focm c`hdco gar   hskorth`eom). ]fo  hktuhc dhso gar tfo
mhlhjos. ]fo  prav`s`aes uemor ]`tco VW@@@ ae kalputht`ae ag  cojhc `etorost sfhcc, `e hey
"Mhlh j joos " ag  tfo K`v`c Kamo javo re re `e motorl`e`ej khso, do ae tfo hlauet g`ehccy hmnumjom.
tfo lohsuro ag rokavorhdco mhlhjos. ```. Zfoe tfo  numjloet ag tfo kaurt hwhrm`ej h
 d. Z`tf rojhrm  phrt`kuchrcy ta he hwhrm ag `etorost `e sul ag  laeoy dokalos ehc hem oxokutary,
tf o kakae
eko
koppt  ag hk
hktu
tuhc
hc he
hem
m ka
kalp
lpoeoesh
shta
tary
ry m hlh
hlhjj os,
os, tfo
tfo tfo rhto  ag sul ag laeoy dokalos ehc hem
rhto ag  `etorost, hs wocc hs tfo hkkruhc tforoag, `s ox
oxok
okuu tta
ary,
ry, tf tfoo  rht
rhto ag cojojhc
hc `e
`eto
torros
ost,
t, wf
wfot
otffor 
`lpasom, hs gaccaws> tfo khso  ghccs uemor phrhjrhpf 8 ar cojhc
`. Zfoe tfo  adc`jht`ae `s drohkfom, hem `t `etorost, wfotfor  tfo khso ghccs uemor  
kaes`sts `e  tfo phyloet ag h sul ag laeoy,  phrhjrhpf 8  ar phrhjrhpf 4, hdavo, sfhcc do
`.o., h  cahe ar gardohrheko ag laeoy, tfo 7% p oorr  he
hee euul
l gra
gral sukf
sukf p hrh
hrhj
j rhp
rhpff 4 , hd
hda
av vo,
o,
`etorost muo  sfaucm do tfht wf`kf lhy fhvo sfhcc do  7% por heeul gral sukf ehc`ty uet`c
 dooe st`puchtom  `e wr`t`ej. Gurtforlaro, tfo `ts sht`sghkt`ae,  tf`s `etor`l por`am do`ej
`etorost muo  sfhcc `tsocg ohre cojhc `etorost eh
ehc`
c`ty
ty ueuet`
t`cc  `ts
`ts sh
sht`
t`sg
sghk
hkt`
t`ae
ae,, tf
tf`s
`s `e`eto
tor`
r`l
l po
por`
r`am
am
gral tfo  t`lo `t `s num`k`hccy molhemom. @e  do`ej moolom  ta do dy tfoe he oqu`vhcoet ta
tf o hd
hdso
soe
eko  ag st
st`p
`pu
ucht
cht`ae
`ae, tfo
tfo rhto
rhto a g `et
`etoros
orostt h gardohrheko  ag krom`t. 06 moolom ta do dy
sfhcc do  7% por heeul ta do kalputom gral tfoe he oqu`vhcoet ta h gardohrheko ag krom`t.
moghuct, `.o.,  gral num`k`hc ar oxtrh nu num`k`hc =. [`eko tfo  numjloet ag tf`s Kaurt fhs eat yot dokalo g`ehc
mol he
hem uemor  hem s u ud
dno kktt ta tfo prav`s ``a
aes hem oxo kkuutary,  tfo `eto ro
ro st
st rhto hppc`khdco ta tfo numjloet
ag Hrt`kco 8870 ag tfo K`v`c Kamo. hwhrm `s  7% hem eat 84% hs `lpasom dy tfo Kaurt ag  
``. Zfoe he  adc`jht`ae, eat kaest`tut`ej h cahe Hppohcs.   ]fo  `etorost a e tfo numjlo e ett h wh
whrm m`skusso m `e
ar gardohrheko  ag laeoy, `s drohkfom, he Ohstore [f`pp`ej  `s rokiaeom gral tfo g`ehc`ty ag tfo
`etorost ae  tfo h llaauet ag mhlhjos hw hr hrmo m  numjloet uet`c  gucc phyloet. @t `s mos`jeom ta poehc`zo
lhy do  `lpasom ht tfo m`skrot`ae ag tfo eae-phyloet ag  tfo numjloet hwhrm. ]fus, `g tfo c`hdco
kaurt ht  tfo rhto ag 7% por heeul. Ea phrty `llom`htocy phy s, ea `etorost w`cc do `lpasom.
`etorost, fawovor,  sfhcc do hmnumjom ae
uec`
uec`qu
qu`m
`mht
htom
om kch`
kch`ls
ls  ar mhlh
mhlhjo jos,
s, ox
oxko
kopt
pt wf
wfoe oe Atfor `ega>

ar uet`c  tfo molhem khe do osthdc`sfom w`tf - larhc mhlhjos  woro saujft ta do `ekrohsom dut [K sh`m he
ro
rohs
hsae
aehd
hdco
co ko
kort
rth`
h`et
ety.
y.  Hkka
Hkkarm rm`e
`ejc
jcy,
y, wf
wfor
oroo tfo
tfo `ekrohso whs  eat prapor. Larhc mhlhjos whs jrhetom hs
molhem `s  osthdc`sfom w`tf rohsaehdco ka
kalp
lpoeoesht
sht`a
`aee ga
garr  loe
loeththcc he
hejuju`s
`sf
f sugg
suggor
orom
om dy tftfoo fo
fo`r
`rss ga
garr ca
cass
ss ag 
ko
kort
rth`
h`e
ety,
ty, tfo
tfo  `eto
`etoro
rost
st sf
sfhc
hccc doj
oj`e
`e ta rue
rue gr
gra
al tfo`r cavom aeos.
tfo t`lo  tfo kch`l `s lhmo num`k`hccy ar   - Oxol pcpchry mhlh j joos  hwh rmrmom dokh u usso oh kkff rospaemoet kcohrcy
oxtrhnum`k`hccy (Hrt.  8870, K`v`c Kamo), dut hkt
hktom
om w`
w`tf
tf  jr
jras
asss eo
eojcjc`j
`joe
oekoko.. ]a oe
oesu
suro
ro tf
tfo`
o`rr do
dofh
fhv`
v`au
aurr w`
w`cc
cc ea
eatt do
wfoe
wfoe su sukf
kf  ko
kort
rth`
h`eety khkhe
e ea
ea t d o sa rohs
rohsaae hd
hdcy ropohtom, oxolpchry mhlhjos woro armorom ph`m.
osthdc`sfom ht  tfo t`lo tfo molhem `s lhmo,
tfo `etorost  sfhcc doj`e ta rue aecy gral tfo
mhto tfo  numjloet ag tfo kaurt `s lhmo (ht
wf`k
wf`kf f t`lo
`lo  tfo
tfo qu hehet`kh
t`khtt`ae
`ae a g m hlh
hlhj
j os
os lhy
lhy
 do moolom  ta fhvo dooe rohsaehdcy
 

G.R. No. 170134 June 17, 2015  opportunity lost due to the respondent’s early termination of their contract.
However, Moldex refused to heed the petitioner’s demands. 
demands. 
ANGEL V. TALAMPAS, JR., Petitioner,
vs. Petitioner then filed a complaint for breach of contract and damages against

MOLDEX REALTY, INC., Respondent. the respondent beforeand

the for
RTC.fraud,
The trial court found
breach of contract ordering the the respondent
respondent to liable
pay: for
(a)
Facts: ₱1,485,000.00
₱1,485,000.0 0 as unpaid construction equipment rentals from May 14, 1993 to
June 16, 1993; ( b) ₱2,100,000.00 as unrealized profits; (c) ₱300,000.00 as moral
The petitioner is the owner and general manager of Angel V. Talampas, Jr. damages; (d) ₱150,000.00 as exemplary damages; (e) attorney’s fees equivalent
Construction (AVTJ Construction), a business engaged in general engineering to ten percent (10%) of the sum total of items (a) and (b); and (f) double costs
and building. suit.22 
of suit.

On December 16, 1992, Petitioner Talampas, owner and general manager of On appeal, the CA reversed and set aside the RTC’s ruling and dismissed the
AVTJ Construction, entered into a contract with Moldex Realty to develop a petitioner’s complaint for breach of contract for lack of cause action.23 
cause of action.
residential subdivision in Silang, Cavite known as the Metrogate Silang Estates.
Issue:
The petitioner undertook to perform roadworks, earthworks and site-grading,
and to procure materials, labor, equipment, tools and facilities, for the contract Whether or not petitioner is entitled to the damages awarded to him by the
price of ₱10,500,000.
₱10,500,000.00,
00, to
 to be paid by the respondent through progress billings. trial court for breach of contract by respondent.
The respondent made an initial down payment of ₱500,000.00 at the start of
the contract. Ruling:

Construction works on the Metrogate was projected to be completed by the YES. The Court held that the
t he parties’ contract is the law between them 
them  and
petitioner within three hundred (300) calendar days. must be complied with in good faith and that contracts have the force of law
between the parties and must be complied with in good faith. That, a
On May 14, 1993, Metrogate’s Project Manager, Engr. Almeida, asked the contracting party’s failure, without
witho ut legal reason, to comply with contract
petitioner to suspend construction work on the site for one week due to a stipulations breaches their contract and can be the basis for the award of
change in the project’s subdivision plan. 
plan.   The suspension lasted for more than party.45 
damages to the other contracting party.
one week, leaving the petitioner’s personnel and equipment idle at the site for
three weeks. Later, the petitioner inquired from Engr. Almeida whether the In the present case, the Court found that the respondent failed to comply with
respondent would still push through with the project. its contractual stipulations on the unilateral termination when it terminated
their contract due to the redesign of the Metrogate Silang Estates’ subdivision
Thereafter, Talampas received from the respondent’s Vice President, Engr. Jose plan.
Po, a letter stating its decision to terminate the parties’ contract.
The respondent could not have validly and unilaterally terminated its contract
with the petitioner, as the latter has not committed any of the stipulated acts of
The petitioner
payment respondedrentals,
of equipment thru a letter,
and 20%demanding from theprice
of the contract respondent
as cost the
of default. In fact, the petitioner at that time was willing and able to perform his
obligations under their contract.
 

Therefore, the petitioner is only entitled to the payment of:
(a) Equipment rentals during the period of work suspension amounting to P
1,485,000.00, a computation of the rent that is reasonable and is based on
faith in appealing and zealously pursuing its case. Under the circumstances, it
was merely protecting its interests.
WHEREFORE, premises considered,
considered, the Court GRANTS the appeal and REVERSES

industry standards. and SETS ASIDE

21, 2005, of the the decision
Court dated
of Appeals inJune 27, 2005,
CA-G.R. CV No.and resolution dated October
64715.
(b) Cost of opportunity lost pursuant to Article 2200 of the Civil Code which
provides that indemnification for damages shall include, not only the value of Accordingly, it also ORDERs the respondent to pay the petitioner the following
the loss suffered, but also the profits that the obligee failed to obtain. amounts of: (a) ₱1,485,000.00, for the rent of petitioner's equipment from May
14, 1993 to June 16, 1993, and (b) ₱1,723,125.01, as cost of  opportunity
of  opportunity lost.
However, the cost of opportunity lost should not be based on the total contract The sum of these amounts shall earn legal interest of six percent (6%) per
price of ₱10,500,000.00 as the petitioner had already been compensated for a annum from the finality of this Decision until full payment.
part of the construction work done.

Thus, the Court awarded the petitioner the amount of

₱1,723,125.01(equivalent
₱1,723,125.01(equivalent of 20% of ₱8,615,625.
₱8,615,625.07)
07) as cost of opportunity lost.
lost.  

Further, the Court held that awards of moral and exemplary damages,
and attorney’s fees are unwarranted   due to the absence of fraud and bad
 faith on the part
part of the resp
respondent.
ondent.  

The Court cannot award moral and exemplary damages to the petitioner in the
absence of fraud on the respondent’s part.

To recover moral damages  in an action for breach of contract, the breach must
be palpably wanton, reckless, malicious, in bad faith, oppressive or abusive.

To warrant the award of exemplary damages , the wrongful act must be

accompanied by bad faith, such as when the guilty party acted in a wanton,
 fraudulent, reckless or malevolent manner.

The Court cannot also award attorney’s fees to the petitioner. Attorney ’s fees 
Attorney’s
are not awarded every time a party wins a suit. Attorney’s fees cannot be
awarded even if a claimant is compelled to litigate or to incur expenses to
protect his rights due to the defendant’s act or omission,  where no sufficient

showing of bad fait h exists; a party’s persistence based solely on its erroneous
conviction of the righteousness of his cause, does not necessarily amount to bad
 faith.. In the present case, the respondent was not shown to have acted in bad
 faith
 PRADO VS. PEOPLE

133 SCRA 602

FACTS:

1. An information for Bigamy was filed in the CFI of Manila against petitioner
Virginia Prado.

2. Petitioner moved to dismiss the case on the ground that Philippine courts have
no jurisdiction over the marriage solemnized in Saigon, as it is outside Philippine
territory and does not fall under any of the exceptions enumerated in Article 2 of
the Revised Penal Code.

3. The trial court denied the dismissal.

4. Petitioner filed in the CFI of Rizal, an action for annulment of her Saigon
marriage contending that her consent thereto was obtained by means of force and
intimidation, and that she never freely cohabited with her second husband, Julio
Manalansang.

5. A motion to suspend trial for the existence of a prejudicial question was filed
by petitioner in the Bigamy Case.

6. Respondent Court denied suspension.

7. Petitioner filed a motion for reconsideration reiterating her argument that a

prejudicial question exists.

8. The Motion for reconsideration was denied. Hence this petition.

ISSUE:
 Does a pending civil suit for annulment of marriage constitutes a prejudicial
question in a bigamy case?

HELD:

For a civil action to be considered prejudicial to a criminal case as to cause the

suspension of the criminal proceedings until the final resolution of the civil case, the
following requisites must be present: 1) ​the civil case involved facts intimately
related to those upon which the criminal prosecution would be based; 2) in
the resolution of the issue or issues resides in the civil action, the guilt or
innocence of the accused would necessarily be determined; and 3)
jurisdiction to try said question must be lodged in another tribunal.

The foregoing requisites being present in the case at bar, the suspensive effect of
a prejudicial question comes into play. *** Should petitioner be able to establish that her
consent to the second marriage was, indeed, obtained by means of force and intimation,
he arc of entering into marriage with Julio Manalansang would be involuntary, and
there can be no conviction for the crime of bigamy.

And while it may be contended by the Supreme Court, that the mere filing of an
Annulment Case does not automatically give rise to a prejudicial question as to bar trial
of a Bigamy Case, considering the gravity of the charge, petitioner cannot be deprived of
her right to prove her guilt or innocence. The State is not thereby deprived from
proceeding with the criminal case in the event that the Court decrees against the
petitioner in the Annulment Case.
 AGAPITO FUELLAS, petitioner, vs. ELPIDIO CADANO, ET AL.,
respondents.

G.R. No. L-14409 [October 31, 1961]

FACTS:

Pepito Cadano and Rico Fuellas, son of defendant-appellant Agapito Fuellas, were both
13 years old and classmates at St. Mary’s High School, Dansalan City. While Pepito was
studying his lessons in the classroom, Rico took the pencil of one Ernesto Cabanok and
surreptitiously placed it inside the pocket of Pepito. When Ernesto asked Rico to return
the pencil, it was Pepito who returned the same, an act which angered Rico, who held
the neck of Pepito and pushed him to the floor. Villamira, a teacher, separated Rico and
Pepito and told them to go home. Rico went ahead, with Pepito following. When Pepito
had just gone down of the schoolhouse, he was met by Rico, still in an angry mood.
Angelito Aba, a classmate, told the two to shake hands. Pepito extended his hand to
Rico, but the latter instead held the former by the neck and with his leg, placed Pepito
out of balance and pushed him to the ground. Pepito fell on his right side with his right
arm under his body, whereupon, Rico rode on his left side. While Rico was in such
position, Pepito suddenly cried out “My arm is broken.” Rico then got up and went
away. Pepito was helped by others to go home. That same evening Pepito was brought to
the Lanao General Hospital for treatment and the results of the x-ray revealed that there
was a complete fracture of the radius and ulna of the right forearm which necessitated
plaster casting. As a result, a civil case for damages was filed against Agapito Fuellas,
father of the minor Rico.

ISSUE:

WON Agapito Fuellas may be held liable for damages for the deliberate criminal act of
his minor son.

HELD:
YES. Under Article 2180 of the Civil Code, the father and, in case of his death or
incapacity, the mother, are responsible for the damages caused by the minor children
who live in their company. This civil liability of the father or the mother, as the case may
be, is a necessary consequence of the parental authority they exercise over them and the
only way by which they can relieve themselves of this liability is if they prove that they
exercised all the diligence of a good father of a family to prevent the damage. Since
children and wards do not yet have the capacity to govern themselves, the law imposes
upon the parents and guardians the duty of exercising special vigilance over the acts of
their children and wards in order that damages to third persons due to the ignorance,
lack of foresight or discernment of such children and wards may be avoided. If the
parents and guardians fail to comply with this duty, they should suffer the consequences
of their abandonment or negligence by repairing the damage caused”.
  ANTONIO VAZQUEZ (petitioner) v FRANCISCO
FRANCISCO DE BORJA (respondent)
February 23 1944 | Ozaeta, J. | Leigh
Control and Management of Corporations; Officers; Liabilities

SUPERFACTS! Borja sued Vazquez, manager of a corporation, for failing to deliver palay to Borja as stated in their
contract. Vazquez argued that he did not enter into the contract in his individual capacity. SC ruled that it was the
corporation who was a party to the contract; thus, Borja’s complaint should have been dismissed.  A corporation is an
artificial being invested by law with a personality of its own, separate and distinct from that of its stockholders and
officers. The mere fact that its personality is owing to a legal fiction and that it necessarily has to act through its agents,
does not make the latter personally liable on a contract duly entered into by them on behalf of the corporation.

FACTS:
Francisco de Borja (Borja) filed an action against Antonio Vazquez and Fernando Busuego (defendants) to
recover from them P4702, alleging:
- defendants jointly and severally obligated themselves to sell Borja 4,000 cavans of palay to be
delivered on February 1932; defendants received payment of P8,400; defendants delivered through
February, March and April only 2,488 cavans and refused to deliver the balance of 1,512
- Thus, Borja suffered damages amounting to P1000
- Borja delivered to defendants 4000 empty sacks, of which they returned only 2490 and refused to deliver the
balance of 1,510 worth P377

Vazquez denied entering into the contract in his own individual and personal capacity, alleging that the
agreement was made by Borja with Natividad-Vasquez Sabani Devlopment Co. (corporation), of which
Vazquez was the acting manager at the time of the transaction.
- Counterclaim: suffered damages on account of the filing of the action because Borja had full
knowledge that he (Vazquez) had nothing to do with the transactions in his own individual and
personal capacity.

Trial court ruled in favor Borja, absolving Busuego (treasurer of the corporation). CA originally affirmed (with
modification/reduction as to amount of damages), saying that the sale in favor of Borja was in his capacity as
acting president and manager of the corporation, but afterwards remanded the case for further proceedings,
to determine whether the corporation had sufficient stock of palay at the time . Vazquez then filed petition for
certiorari.

ISSUE: Did Borja enter into a contract with Vazquez in his personal capacity? NO

RULING: CA decision REVERSED. Complaint DISMISSED.

HELD:

The action being on a contract, and it appearing that the party liable on the contract is the corporation, which
is not a party herein, the complaint should have been dismissed. Borja’s
Borja’s contentions were based on the fact
that he had contracted with the corporation through Vazquez, and that Vazquez had received the payment
from Borja. But such argument is invalid and insufficient to show that the president of the corporation is
personally liable on the contract duly and lawfully entered into by him in its be half.

A corporation is an artificial being invested by law with a personality of its own, separate and distinct from
that of its stockholders and officers. The mere fact that its personality is owing to a legal fiction and that it
necessarily has to act through its agents, does not make the latter personally liable on a contract duly entered
into, or for an act lawfully performed, by them in behalf of the corporation. Without this legal fiction, no
corporate entities may exist and no corporate business may b e transacted. Such legal fiction may be
disregarded only when an attempt is made to use it as a cloak to hide an unlawful or fraudulent purpose. No
such thing has been alleged or proven in this case. It has not been alleged nor even intimated that Vazqu ez
personally benefited by the contract of sale in question and that he is merely invoking the legal fiction to
avoid personal liability. We find no legal and factual basis upon which to hold him liable on th e contract either
principally or subsidiarily.
The trial court found Vazquez guilty of negligence in the performance of the contract and held him personally
liable on that account. [“On the other hand, the Court of Appeals found that ***Spanish sentences I can’t
translate***”, so don’t mention nalang t he CA hehe.] The lower courts failed to distinguish these two:

CONTRACTUAL OBLIGATION: obligation arising from contract. The fault and negligence referred to here are
those incidental to the fulfillment or nonfullfillment of a contractual obligation;

EXTRACONTRACTUAL OBLIGATION: obligation arising from culpa aquiliana. The fault or negligence referred
to here are those that give rise to an o bligation independently of any contract.

The fact that the corporation, acting through Vazquez as its manager, was guilty of negligence in the
fulfillment of the contract, did not make Vazquez principally or subsidiarily liable for such negligence. Since it
was the corporation's contract, its non-fulfillment, whether due to negligence or fault or to any other cause,
made the corporation and not its agent liable.

On the other hand if independently of the contract Vazquez by his fault or negligence caused damage to Borja,
he would be liable to the latt er under extracontractual obligatoins. But then Borja’s cause of action should be
based on culpa aquiliana and not on the contract alleged in his complaint herein; and Vazquez' liability would
be principal and not merely subsidiary. No such cause of action was alleged in the complaint. Hence the trial
court had no jurisdiction over the issue and could not adjudicate upon it. Consequently it was error for the
Court of Appeals to remand the case to the trial court to try and decide such issue.

With regard to Vazquez’s counterclaim: the Court found that just because Vazquez was  sued in his personal
capacity, does not warrant his contention that the suit against him is malicious and tortious; thus, there is no
sufficient basis upon which to sustain his counterclaim. Although he was not personally liable fo r the
fulfillment of the contract entered into by him on behalf of the corporation of which he was the acting
president and manager, it was his moral duty towards the party with whom he contracted in said capacity to
see to it that the corporation fulfilled the contract by delivering the palay it had sold, the price of which it had
already received.

Paras, J., dissenting:

Borja is entitled to a judgment against Vazquez. Vazquez, as acting president and manager, entered into the
contract with full knowledge of the then insolvent status of his company (the company in f act was dissolved
thereafter). Notwithstanding the receipt from Borja of the full purchase price, Vazquez still did not deliver all
the cavans, and even refused to deliver the empty sacks or their value. Such failure resulted from his fault o r
negligence.

Even though Borja’s cause of action is based on a contract between Borja and the corporation (which is not a
party to the case), it was still proven that Vazquez was guilty of fraud and negligence in that he prevente d the
performance of the contract and caused damage to Borja. The error of procedure should not be a hindrance to
the rendition of a decision in accordance with evidence introduced by the parties, especially when in such a
situation we may order the necessary amendment of the pleadings.
 

Jamelo V Serfino 44 SCRA 464

Background

  In the evening of February 1, 1961, while Antonio Regoles was driving the truck of the
defendant Federico Serfino, through his negligence and carelessness, said truck collided
with another truck parked on the right side of the road near kilometer 5 in the
Municipality of Talisay, Negros Occidental.
  As a consequence of said collision his co-employee Artemio Jamelo suffered injuries
and he died.
  The mother of the late Artemio Jamelo filed in the Court of First Instance Civil Case No.
6198, entitled 'Anita Jamelo vs. Antonio Regoles' for damages on May 15, 1961.
  On August 26, 1963 the Court of First Instance rendered a decision declaring the
defendant Antonio Regoles responsible for the death of Artemio Jamelo, and ordered
Antonio Regoles to pay P6,000.00 to the plaintiff Anita Jamelo and to pay an additional
sum of P2,000.00 as moral damages.
  On November 17, 1965 the provincial sheriff of Negros Occidental returned unsatisfied

the
pay)writ of execution, stating that the defendant Antonio Resoles was insolvent (can’t

Petitioner: Jamelo filed this present action against the defendant Federico Serfino for subsidiary
liability as owner of the truck and employer of the driver Antonio Regoles, claiming that said
defendant Federico Serfino is subsidiarily liable to pay the amount of P8,000.00 adjudged by the
Court of Appeals against the defendant driver Antonio Regoles who was
insolvent.

Defendant: There was no criminal complaint filed against the driver Antonio Regoles; the
defendant in this present case Federico Serfino is not subsidiarily liable.

Ruling:

The lower court held that "subsidiary liability presupposes that there was a criminal action. If no
criminal action was instituted, the employer's liability would not be predicated on Art. 103,
(Revised Penal Code)".

Actions based upon quasi-delicts prescribe after four years from the commission of the fault or
negligent deed. Since the accident causing the death of plaintiff's son occurred on February 1,
1961, the filing of the complaint below only on March 10, 1966 was already barred by the lapse
of more than a year beyond the four-year prescription period.

http://www.lawphil.net/judjuris/juri1972/apr1972/gr_l_26730_1972.html
PAJARITO VS. SENERIS

87 SCRA 275

FACTS:

On May 9, 1975, Joselito Aizon, the driver-employee of an Isuzu Passenger Bus operated
by Felipe Aizon, caused the bus to turn turtle as a result of which two of his passengers
on board sustained injuries which caused their death. Thereafter, an information was
filed in the CFI of Zamboanga City charging the accused with double homicide through
reckless imprudence. Upon arraignment, the respondent pleaded guilty and the court
rendered a judgment convicting him and to pay the amount of P12, 000.00. Due to the
insolvency of the accused, petitioner Lucia S. Pajarito, mother of the deceased
passenger, filed with the court a motion for the issuance of subsidiary writ of execution
against the operator Felipe Aizon. The court denied petitioner's motion for subsidiary
writ of execution as operator Aizon ​was not a party in the aforesaid criminal case.

ISSUE:

WON the trial court erred in denying the motion for subsidiary writ of execution.

HELD:

Yes, the institution of the criminal action carries with it the institution of the civil action
arising therefrom.

Pursuant to Article 103, in relation to Article 102, of the Revised Penal Code, an
employer may be subsidiary liable for the employee's civil liability in a criminal action
when: (1) the employer is engaged in any kind of industry; (2) the employee
committed the offense in the discharge of his duties; and (3) he is insolvent
and has not satisfied his civil liability. The subsidiary civil liability of the
employer, however, arises only after conviction of the employee in the criminal case. In
Martinez v. Barredo​, 3​ this Court ruled that a judgment of conviction sentencing a
defendant employee to pay an indemnity in the absence of any collusion between the
defendant and the offended party, is conclusive upon the employer in an action for the
enforcement of the latter's subsidiary liability.

In ​Miranda v. Malate Garage & Taxicab, Inc​., 4​ this Court further amplified the rule
that the decision convicting the employee is binding and conclusive upon the employer,
"not only with regard to (the latter's) civil liability but also with regard to its amount
because the liability of an employer cannot be separated but follows that of his
employee.

In view of the foregoing principles, and considering that Felipe Aizon does not deny that
he was the registered operator of the bus but only claims now that he sold the bus to the
father of the accused, it would serve no important purpose to require petitioner to file a
separate and independent action against the employer for the enforcement of the latter's
subsidiary civil liability. Under the circumstances, it would not only prolong the
litigation but would require the heirs of the deceased victim to incur unnecessary
expenses. At any rate, the proceeding for the enforcement of the subsidiary civil liability
may be considered as part of the proceeding for the execution of the judgment. A case in
which an execution has been issued is regarded as still pending so that all proceedings
on the execution are proceedings in the suit. 9​ There is no question that the court which
rendered the judgment has a general supervisory control over its process of execution,
and this power carries with it the right to determine every question of fact and law
which may be involved in the execution.
MERCURY DRUG CORPORATION v. SEBASTIAN BAKING

2007 / Sandoval-Gutierrez / Petition for review on certiorari of CA decision and

resolution

Sebastian Baking went to Dr. Cesar Sy’s clinic for a medical check-up. The next day,
after undergoing several tests, Dr. Sy found that Baking’s blood sugar and triglyceride
levels were above normal, so he gave him 2 medical prescriptions—Diamicron (blood
sugar) and Benalize (triglyceride). Baking went to Mercury Drug Alabang branch to buy
the medicines. However, the saleslady misread the prescription as Dormicum, a potent
sleeping tablet, so that was what was sold to Baking. Unaware that he was given the
wrong medicine, Baking took one Dormicum pill a day for 3 days.

On the 3​rd day of taking the medicine, Baking figured in a vehicular accident, as his car
collided with Josie Peralta’s car. Baking fell asleep while driving, and he could not
remember anything about the collision nor felt its impact. Suspecting that the tablet he
took may have a bearing on his state at the time of the collision, he returned to Dr. Sy,
who was shocked to find that what was sold to Baking was Dormicum.

Baking filed a complaint for damages against Mercury Drug. RTC rendered its decision
in favor of Baking. CA affirmed RTC.

ISSUE: WON Petitioner is liable

MERCURY DRUG EMPLOYEE GROSSLY NEGLIGENT IN SELLING

DORMICUM

To sustain a claim based on NCC 2176, the following requisites must concur:

● Damage suffered by plaintiff

● Fault or negligence of defendant

● Connection of cause and effect between A & B

The drugstore business is imbued with public interest. The health and safety of the
people will be put into jeopardy if drugstore employees will not exercise the highest
degree of care and diligence in selling medicines. The care required must be
commensurate with the danger involved, and the skill employed must correspond with
the superior knowledge of the business which the law demands.

Considering that a fatal mistake could be a matter of life and death for a buying
patient, the employee should have been very cautious in dispensing medicines. She
should have verified WON the medicine she gave was what was prescribed by Dr. Sy.
MERCURY DRUG ALSO LIABLE UNDER NCC 2180

It failed to prove that it exercised the due diligence of a good father of a family in the
selection and supervision of the employee

PROXIMATE CAUSE OF THE ACCIDENT – NEGLIGENCE OF DRUGSTORE

EMPLOYEE

● Proximate cause​ – any cause that produces injury in a natural and continuous
sequence, unbroken by any efficient intervening cause, such that the result would
not have occurred otherwise; determined from the facts of each case, upon a
combined consideration of logic, common sense, policy and precedent

● Vehicular accident could not have occurred had the drugstore employee been
careful in reading the prescription; without the potent effects of Dormicum, a
sleeping tablet, it was unlikely that Baking would fall asleep while driving his car,
resulting in a collision

AWARD​ – 50k moral damages, 25k exemplary damages

Facts:

Respondent Sebastian Baking went to the clinic of Dr. Cesar Sy for a medical check-up.
Subsequently, after several tests, Dr. Sy prescribed two medical prescriptions –
Diamicron for his blood Sugar and Benalize tablets for his triglyceride.

Respondent then proceeded to petitioner Mercury Drug Store (MDC) to buy the
prescribed medicines. However, the saleslady misread the prescription for Diamicron
for Dormicrum – a potent sleeping tablet.

Unaware of the mistake, Respondent took it for three consecutive days. On the third
day, he figured in a vehicular accident. His car collided with another car driven by one
Josie Peralta. It turned out that Respondent fell asleep while driving and has no idea
regarding the accident. Suspecting that the tablet he took may have caused the accident,
he returned to Dr. Sy and the latter was shocked because of the wrong medicine sold to
his patient.

Respondent thereafter filed with the Regional Trial Court (RTC) complaint for damages
against petitioner.

The RTC ruled in favour of the plaintiff; decision of which was affirmed in toto by the
Court of Appeals. Hence this present petition.

Issue: Whether or not petitioner was negligent, if so, whether such negligence was the
proximate cause of respondent’s accident?

Ruling:

YES.

Article 2176 of the New Civil Code provides that “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 re-existing contractual relation between the
parties, is called a quasi-delict”.

The Court also enumerated the three (3) elements of Quasi-delict, to wit:

1. Damage suffered by the plaintiff;

 2. Fault or negligence of the defendant
3. Connection of the cause and effect between the fault or negligence of the
defendant and the damage incurred by the plaintiff

The Court stressed that there is no dispute that respondent suffered damages. It is
generally recognized that the drugstore business is imbued with public interest. The
health and safety of the people will be put into jeopardy if the drugstore employees will
not exercise the highest degree of care and diligence.

That petitioner’s employee was grossly negligent. The care required must be
commensurate with the danger involved, and the skill employed must correspondent
with the superior knowledge of the business which the law demands.

Hence, the Court sustained that the proximate cause of the accident was the petitioner’s
employee’s negligence. The vehicular accident could have not occurred had the
employee been careful to his job.
TAMARGO vs. CA et al

G.R. No. 85044 June 3, 1992 FELICIANO, ​J.:

FACTS: ​Adelberto Bundoc, then a minor of 10 years of age, shot Jennifer Tamargo with
an air rifle which resulted in her death. Accordingly, a civil complaint for damages was
filed with the RTC of Vigan, Ilocos Sur by petitioners, parents of Jennifer, against
respondent spouses, Adelberto’s natural parents with whom he was living at the time of
the tragic incident. In addition to this case for damages, a criminal information or
Homicide through Reckless Imprudence was filed against Adelberto, who was acquitted
and exempted from criminal liability on the ground that he bad acted without
discernment.

Prior to the incident the spouses Rapisura had filed a petition to adopt the minor
Adelberto before the then CFI of Ilocos Sur. This petition for adoption was granted ​after
Adelberto had shot and killed Jennifer

In their Answer, respondent spouses, Adelberto’s natural parents, claimed that not they,
but rather the adopting parents were indispensable parties to the action since parental
authority had shifted to the adopting parents from the moment the successful petition
for adoption was ​filed.

The trial court ruled against the adopting parents, who filed an MR which was later
denied for being filed beyond the reglementary period. Petitioners went to the CA on a
petition for mandamus ​and certiorari ​questioning the trial court’s decision. The CA
dismissed the petition, ruling that petitioners had lost their right to appeal. Hence this
petition for review

ISSUE: ​Who should be responsible for the tortuous act of the minor Adelberto, his
natural parents or adopting parents?

HELD:​ Natural parents.

It is not disputed that Adelberto’s voluntary act of shooting Jennifer with an air rifle
gave rise to a cause of action on ​quasi-delict ​against him. As Article 2176 of the Civil
Code provides:
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​ . . .

Upon the other hand, the law imposes civil liability upon the father and, in case of his
death or incapacity, the mother, for any damages that may be caused by a ​minor child
who lives with them. Article 2180 of the Civil Code reads:

The obligation imposed by article 2176 is demandable not only for one’s own acts or
omissions, but also for those of persons for whom one is responsible.

The father and, in case of his death or incapacity, the mother, are responsible for the
damages caused by the ​minor children who ​live in their company.

xxx xxx xxx

The responsibility treated of in this Article shall cease when the person herein
mentioned prove that they observed all the diligence of a good father of a family to
prevent damage. (Emphasis supplied)

The natural parent spouses rely on Article 36 of the Child and Youth Welfare Code
which reads as follows:

Art. 36. ​Decree of Adoption​. — If, after considering the report of the Department of
Social Welfare or duly licensed child placement agency and the evidence submitted
before it, the court is satisfied that the petitioner is qualified to maintain, care for, and
educate the child, that the trial custody period has been completed, and that the best
interests of the child will be promoted by the adoption, a decree of adoption shall be
entered, which shall be effective he date the original petition was filed. The decree shall
state the name by which the child is thenceforth to be known.

The Bundoc spouses further argue that the above Article 36 should be read in relation to
Article 39 of the same Code:

Art. 39. ​Effect of Adoption. ​— The adoption shall:

xxx xxx xxx

(2) ​Dissolve the authority vested in the natural parents​, except where the adopter is the
spouse of the surviving natural parent;

xxx xxx xxx

and urge that their Parental authority must be deemed to have been dissolved as of the
time the Petition for adoption was ​filed.

The Court is not persuaded. As earlier noted, under the Civil Code, the basis of parental
liability for the torts of a minor child is the relationship existing between the parents
and the minor child ​living with the​m and over whom, the law presumes, the parents
exercise ​supervision and control.

Article 221 of the Family Code of the Philippines insisted upon the requisite that the
child, doer of the tortious act, shall have been in the actual custody of the parents sought
to be held liable for the ensuing damage:

Art. 221. Parents and other persons exercising parental authority shall be civilly liable
for the injuries and damages caused by the acts or omissions of their unemancipated
children ​living in their company and under their parental authority subject to the
appropriate defenses provided by law.

In the instant case, however, to hold that parental authority had been retroactively
lodged in the Rapisura spouses so as to burden them with liability for a tortious act that
they could not have foreseen and which they could not have prevented (since they were
at the time in the United States and had no physical custody over the child Adelberto)
would be unfair and unconscionable. Such a result, moreover, would be inconsistent
with the philosophical and policy basis underlying the doctrine of vicarious liability. Put
a little differently, no presumption of parental dereliction on the part of the adopting
parents, the Rapisura spouses, could have arisen since Adelberto was not in fact subject
to their control at the time the tort was committed.
Maria Teresa Cuadra vs Alfonso Monfort 

FACTS: 

Maria  Teresa  Cuadra  and  Maria  Teresa  Monfort  were  both  classmates  in 
Mabini  Elementary  School  Bacolod  City.  In  July  1962,  their  teacher  assigned 
the  class  to  weed  the  school  premises.  While  they  were  doing  so,  MT  Monfort 
found  a  headband  and  she  jokingly  shouted  it  as  an  earthworm  and  thereafter 
tossed  it  at  MT  Cuadra  who  was  hit  in  her  eye.  MT  Cuadra’s  eye  got  infected. 
She  was  brought  to  the  hospital;  her  eyes  were  attempted  to  be  surgically 
repaired  but  she  nevertheless  got  blind  in  her  right  eye.  MT  Cuadra’s  parents 
sued  Alfonso  Monfort  (MT  Monfort’s  dad)  based  on  Article  2180  of  the  Civil 
Code.  The  lower  court  ruled  that  Monfort  should  pay  for  actual  damages  (cost 
of hospitalization), moral damages and attorney’s fees. 

ISSUE: 

Whether or not Monfort is liable under Article 2180. 

HELD: 

No.  Article  2180  provides  that  the  father,  in  case  of  his incapacity or death, the 
mother,  is  responsible  for  the  damages  caused  by  the  minor  children  who  live 
in  their  company.  The  basis  of  this  vicarious,  although  primary,  liability  is 
fault  or  negligence,  which  is  presumed  from  that  which  accompanied  the 
causative  act  or  omission.  The  presumption  is  merely  prima  facie  and  may 
therefore  be  rebutted.  This  is  the clear and logical inference that may be drawn 
from  the  last  paragraph  of  Article  2180,  which  states  “that  the  responsibility 
treated  of  in  this  Article  shall  cease  when  the  persons  herein  mentioned  prove 
that  they  observed  all  the  diligence  of  a  good  father  of  a  family  to  prevent 
damage.” 

In  the  case  at  bar  there  is  nothing  from  which  it  may  be  inferred  that  Alfonso 
Monfort  could  have  prevented  the  damage  by  the  observance  of  due  care,  or 
that he was in any way remiss in the exercise of his parental authority in failing 
to  foresee  such  damage,  or  the  act  which  caused  it.  On  the  contrary,  his  child 
was  at  school,  where  it  was  his  duty  to  send  her  and  where  she  was,  as  he  had 
the  right  to  expect her to be, under the care and supervision of the teacher. And 
as  far  as  the  act  which  caused  the  injury  was  concerned,  it  was  an  innocent 
prank  not  unusual  among  children  at  play  and  which  no  parent,  however 
careful,  would  have  any  special  reason  to  anticipate  much  less  guard  against. 
Nor  did  it  reveal  any  mischievous  propensity,  or  indeed  any  trait  in the child’s 
character  which  would reflect unfavorably on her upbringing and for which the 
blame could be attributed to her parents. 

JUSTICE BARREDO Dissenting; 

MT  Monfort  is  already  13  years  old  and  should  have  known  that  by  jokingly 
saying  “aloud  that  she  had  found  an  earthworm  and,  evidently  to  frighten  the 
Cuadra  girl,  tossed  the  object  at  her,”  it  was  likely  that  something  would 
happen  to  her  friend,  as  in  fact,  she  was  hurt.  There  is  nothing  in  the  record 
that  would  indicate  that  Alfonso  had  properly  advised  his  daughter  to  behave 
properly  and  not  to  play  dangerous  jokes  on  her  classmate  and  playmates,  he 
can  be  liable  under  Article  2180 of the Civil Code. There is nothing in the record 
to  show  that  he  had  done  anything  at  all  to  even  try  to  minimize  the  damage 
caused upon by his child. 
 PALISOC v. BRILLANTES

G.R. No. L-29025 [October 4, 1971]

FACTS:

Deceased Dominador Palisoc and defendant Virgilio Daffon were automotive

mechanics students at the Manila Technical Institute (MTI). In the afternoon of March
10, 1966 during recess, an altercation transpired between the deceased and the
defendant. At the time of the incident, Dominador was sixteen years old while Virgilio
was already of age. Virgilio was working on a machine with Dominador looking at them.
The situation prompted Virgilio to remark that Dominador was acting like a foreman. As
a result, Dominador slapped Virgilio on the face. Virgilio retaliated by inflicting severe
blows upon Dominador’s stomach, which caused the latter to stumble upon an engine
block and faint. The latter died, the cause of death being “shock due to traumatic
fracture of the ribs”. The parents of Dominador filed an action for damages against (1)
Virgilio, (2) Valenton, the head/president of MTI, (3) Quibule who was the teacher in
charge at the time of the incident, and (4) Brillantes who is a member of the board of
directors and former sole proprietor of MTI.

The trial court held Virgilio liable but absolved the other defendants-officials. It
stated that the clause “so long as they remain in their custody” contained in Article 2180
of the Civil Code applies only where the pupil lives and boards with the teachers, such
that the control or influence on the pupil supersedes those of the parents., and such
control and responsibility for the pupil’s actions would pass from the father and mother
to the teachers. This legal conclusion was based on the dictum in Mercado v. CA, which
in turn based its decision in Exconde v. Capuno. The trial court held that Article 2180
was not applicable in this case, as defendant Virgilio did not live with the
defendants-officials at the time of the incident. Hence, this petition.

ISSUE:

Who must be held liable for damages for the death of Dominador together with
the defendant?

HELD:

The head/president and teacher of MTI (Valenton and Quibule respectively)

were held liable jointly and severally with the Virgilio for damages. No liability attaches
to Brillantes as a mere member of the MTI board of directors. Similarly, MTI may not be
held liable since it had not been properly impleaded as party defendant.
 The phrase used in Article 2180, “so long as the students remain in their
custody” means the protective and supervisory custody that the school and its heads and
teachers exercise over the pupils and students for as long as they are at attendance in
the school, including recess time. There is nothing in the law that requires that for such
liability to attach the pupil or student who commits the tortuous act must live and board
in the school. The dicta in the cases of Mercado as well as in Exconde v. Capuno on
which it relied are deemed to have been set aside. The rationale of such liability of
school heads and teachers for the tortious acts of their pupils and students, so long as
they remain in their custody, is that they stand, in loco parentis to a certain extent to
their pupils and students and are called upon to “exercise reasonable supervision over
the conduct of the child.” In this case, The unfortunate death resulting from the fight
between the protagonists-students could have been avoided, had said defendants
complied with their duty of providing adequate supervision over the activities of the
students in the school premises to protect their students from harm. Since Valenton and
Quibule failed to prove that they observed all the diligence of a good father of a family to
prevent damage, they cannot likewise avail of the exemption to the liability. The
judgment of the appellate court was modified, while claim for compensatory damages
was increased in accordance with recent jurisprudence and the claim for exemplary
damages denied in the absence of gross negligence on the part of the said defendants.
FACTS:
■ 1962: Sergio Banez started burying huge stones which were remnants of the
old school shop that was destroyed in World War II because they were serious
hazards to the school children
■ October 7, 1963: Edgardo Aquino gathered 18 of his male pupils, aged 10 to
11, after class dismissal and ordered them to dig beside a one-ton concrete
block in order to make a hole wherein the stone can be buried.
■ The work was left unfinished.
■ October 8, 1963: Aquino called Reynaldo Alonso, Francisco Alcantara, Ismael
Abaga and Novelito Ylarde of the original 18 pupils to continue the digging
■ they dug until the excavation was 1 meter and 40 centimeters deep
■ Aquino alone continued digging while the pupils remained inside the
pit throwing out the loose soil that was brought about by the digging
■ When the depth was right enough to accommodate the concrete block,
they got out of the hole
■ Aquino left the children to level the loose soil around the open hole
while he went to see Banez who was about 30 meters away to key to the
school workroom where he could get some rope
■ A few minutes after Aquino left, Alonso, Alcantara and Ylarde, playfully
jumped into the pit.
■ without any warning at all, Abaga jumped on top of the concrete block
causing it to slide down towards the opening.
■ Alonso and Alcantara were able to scramble out of the excavation on time
■ unfortunately for Ylarde, the concrete block caught him before he
could get out, pinning him to the wall in a standing position
■ Ylarde sustained the following injuries, which he died of 3 days later.

■ Ylarde's parents filed a suit for damages against both Aquino and Soriano,
principal
■ lower court:
1. digging done by the pupils is in line with their course called Work Education
2. Aquino exercised the utmost diligence of a very cautious person
3. demise of Ylarde was due to his own reckless imprudence
■ CA: affirmed
■
ISSUE: W/N Aquino and Soriano should be held liable for negligence

HELD: YES. the petition GRANTED. Edagardo Aquino to pay petitioners the following:
(1) Indemnity for the death of Child Ylarde P30,000.00
(2) Exemplary damages 10,000.00
(3) Moral damages 20,000.00
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 a quasi-delict and is
governed by the provisions of this Chapter.

Art. 2180. x x x
xxx xxx xxx

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages
caused by their pupils and students or apprentices, so long as they remain in their
custody.

■ As regards the principal, We hold that he cannot be made responsible for the
death of the child Ylarde, he being the head of an academic school and not a
school of arts and trades
■ Soriano did not give any instruction regarding the digging
■ GR: teachers shall be liable for the acts of their students
■ EX: where the school is technical in nature, in which case it is the head
thereof who shall be answerable
■ Aquino acted with fault and gross negligence when he:
(1) failed to avail himself of services of adult manual laborers
(2) required the children to remain inside the pit even after they had finished
digging, knowing that the huge block was lying nearby and could be easily
pushed or kicked aside by any pupil who by chance may go to the perilous
area
(3) ordered them to level the soil around the excavation when it was so
apparent that the huge stone was at the brink of falling
(4) went to a place where he would not be able to check on the children's
safety
(5) left the children close to the excavation, an obviously attractive nuisance.
■ negligent act of Aquino in leaving his pupils in such a dangerous site has a
direct causal connection to the death of the child Ylarde
■ it was but natural for the children to play around
■ the child Ylarde would not have died were it not for the unsafe
situation created by Aquino
■ the excavation should not be placed in the category of school gardening,
planting trees, and the like as these undertakings do not expose the children
to any risk that could result in death or physical injuries
■ A reasonably prudent person would have foreseen that bringing children to an
excavation site, and more so, leaving them there all by themselves, may result
in an accident. An ordinarily careful human being would not assume that a
simple warning "not to touch the stone" is sufficient to cast away all the
serious danger that a huge concrete block adjacent to an excavation would
present to the children. Moreover, a teacher who stands in ​loco parentis ​to his
pupils would have made sure that the children are protected from all harm in
his company.
G.R. No. 84698 February 4, 1992

PHILIPPINE SCHOOL OF BUSINESS A!INIS"RA"ION, #UAN . LI!, BEN#A!IN P. PAULINO,

AN"ONIO !. !AG"ALAS, COL. PERO SACRO a$% L". !. SORIANO, petitioners,
vs.
COUR" OF APPEALS, HON. REGINA ORO&E'(BENI"E',
ORO&E'(BENI"E', )$ *er +aa+)-y a Pre)%)$/ #u%/e o0
Bra$+* 4, Re/)o$a "r)a Cour-, !a$)a, SEGUNA R. BAU"IS"A a$% ARSENIA .
BAU"IS"A, respondents.

FAC"S3 Carlitos Bautista was a third year student at the Philippine School of Business Administration.
 Assailants, who were not members of the schools academic community, while in the premises of PSBA,
stabbed Bautista to death. This incident prompted his parents to file a suit against PSBA and its
corpor
corporate
ate offic
officers
ers for damage
damages
s due to their
their allege
alleged
d neglige
negligence
nce,, reckle
recklessn
ssness
ess and lack
lack of securi
security
ty
precautions, means and methods before, during and after the attack on the victim.

The defendants filed a motion to dismiss, claiming that the compliant states no cause of action against
them based on uasi!delicts, as the said rule does not cover academic institutions. The trial court denied
the motion to dismiss. Their motion for reconsideration was likewise dismissed, and was affirmed by the
appellate court. "ence, the case was forwarded to the Supreme Court.

ISSUE3 #hether or not PSBA is liable for the death of the student.

RULING3 Because the circumstances of the present case evince a contractual relation between the
PSBA and Carlitos Bautista, -*e rue o$ ua)(%e)+- %o $o- reay /o5er$ . A perusal of Article $%&'
shows that obligations arising from uasi!delicts or tort, also known as e(tra!contractual obligations,
arise only between parties not otherwise bound by contract, whether e(press or implied. "owever, this
impression has not prevented this Court from determining the e(istence of a tort even when there
obtains a contract.

 Article $%)*, in con+unction with Article $%&' of the Civil Code, establishes the rule in in o+o are$-) .
 Article $%)* 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.
"owever, this material situation does not e(ist 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. But it does
not necessarily follow that PSBA is absolved form liability.

*e$ a$ a+a%e7)+ )$-)-u-)o$ a++e- -u%e$- 0or e$ro7e$-, -*ere ) e-ab)*e% a +o$-ra+-
be-ee$ -*e7, reu-)$/ )$ b)a-era ob)/a-)o$ *)+* bo-* ar-)e ) bou$% -o +o7y )-* . or 
its part, the school undertakes to provide the student with an education that would presumably suffice to
euip him with the necessary tools and skills to pursue higher education or a profession. This includes
ensuring the safety of the students while in the school premises. -n the other hand, the student
covenants to abide by the schools academic reuirements and observe its rules and regulations.

/n the circumstances obtaining in the case at bar, however, there is, as yet, no finding that the contract
between the school and Bautista had been breached thru the formers negligence in providing proper 
security measures. This would be for the trial court to determine. And, even if there be a finding of 
negligence, the same could give rise generally to a breach of contractual obligation only. 0sing the test
of Cangco,
Cangco, supra,
supra, the negligence of the school would not be relevant absent a contract. /n fact, that
negligence becomes material only because of the contractual relation between PSBA and Bautista. /n
other words, a contractual relation is a condition sine qua nonto
nonto the schools liability. The negligence of 
the school cannot e(ist independently of the contract, unless the negligence occurs under the
circumstances set out in Article $% of the Civil Code.
Soliman v. Tuazon

G.R. No. 66207, 18 May 1992

FACTS:

In the morning of 13 August 1982, while the plaintiff was in the campus ground and
premises of, REPUBLIC CENTRAL COLLEGES, as he was and is still a regular enrolled
student of said school taking his morning classes, the defendant, JIMMY B. SOLOMON,
who was on said date and hour in the premises of said school performing his duties and
obligations as a duly appointed security guard under the employment, supervision and
control of his employer-defendant R.L. SECURITY AGENCY, INC., headed by Mr.
Benjamin Serrano, without any provocation, in a wanton, fraudulent, reckless,
oppressive or malevolent manner, with intent to kill, attack, assault, strike and shoot the
plaintiff on the abdomen with a .38 Caliber Revolver, a deadly weapon, which ordinarily
such wound sustained would have caused plaintiff’s death were it not for the timely
medical assistance given to him. The plaintiff was treated and confined at Angeles
Medical Center, Angeles City, and, as per doctor’s opinion, the plaintiff may not be able
to attend to his regular classes and will be incapacitated in the performance of his usual
work for a duration of three to four months before his wounds would be completely
healed.

Private respondent Colleges filed a motion to dismiss, contending that the complaint
stated no cause of action against it. Private respondent argued that it is free from any
liability for the injuries sustained by petitioner student for the reason that private
respondent school was not the employer of the security guard charged and hence was
not responsible for any wrongful act of Solomon.

ISSUE:

WON the respondent college is liable for the acts of the security guard.

RULING:

No. Under Article 2180 of the Civil Code, the obligation to respond for damage inflicted
by one against another by fault or negligence exists not only for one’s own act or
omission, but also for acts or omissions of a person for whom one is by law responsible.
Among the persons held vicariously responsible for acts or omissions of another person
are the following:

xxx xxxxxx
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are not
engaged in any business or industry.

xxx xxxxxx

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages
caused by their pupils, their students or apprentices, so long as they remain in their
custody.

x xx x xx x xx

The first paragraph quoted above offers no basis for holding the Colleges liable for the
alleged wrongful acts of security guard Jimmy B. Solomon inflicted upon petitioner
Soliman, Jr. Private respondent school was not the employer of Jimmy Solomon. The
employer of Jimmy Solomon was the R.L. Security Agency Inc., while the school was the
client or customer of the R.L. Security Agency Inc. It is settled that where the security
agency, as here, recruits, hires and assigns the work of its watchmen or security guards,
the agency is the employer of such guards or watchmen. Liability for illegal or harmful
acts committed by the security guards attaches to the employer agency, and not to the
clients or customers of such agency.

The fact that a client company may give instructions or directions to the security guards
assigned to it, does not, by itself, render the client responsible as an employer of the
security guards concerned and liable for their wrongful acts or omissions. Those
instructions or directions are ordinarily no more than requests commonly envisaged in
the contract for services entered into with the security agency. There being no
employer-employee relationship between the Colleges and Jimmy Solomon, petitioner
student cannot impose vicarious liability upon the Colleges for the acts of security guard
Solomon.
 SALVOSA vs IAC

Facts:

Baguio Colleges Foundation is an academic institution. However, it is also an institution

of arts and trade because BCF has a full-fledged technical-vocational department
offering Communication, Broadcast and Teletype Technician courses as well as
Electronics Serviceman and Automotive Mechanics courses.

Within the premises of the BCF is an ROTC Unit. The Baguio Colleges Foundation
ROTC Unit had Jimmy B. Abon as its duly appointed armorer. As armorer of the ROTC
Unit, Jimmy B. Abon received his appointment from the AFP. Not being an employee of
the BCF, he also received his salary from the AFP, as well as orders from Captain
Roberto C. Ungos. Jimmy B. Abon was also a commerce student of the BCF.

On 3 March 1977, at around 8:00 p.m., in the parking space of BCF, Jimmy B.
Abon shot Napoleon Castro a student of the University of Baguio with an unlicensed
firearm which the former took from the armory of the ROTC Unit of the BCF. As a
result, Napoleon Castro died and Jimmy B. Abon was prosecuted for, and convicted of
the crime of Homicide.

Subsequently, the heirs of Napoleon Castro sued for damages, impleading Jimmy B.
Abon and the BCF .

Issue:

WON BCF is subsidiarily liable.

Ruling of the Case:

Under the penultimate paragraph of Art. 2180 of the Civil Code, teachers or
heads of establishments of arts and trades are liable for “damages caused
by their pupils and students or apprentices, so long as they remain in their
custody.” The rationale of such liability is that so long as the student remains in the
custody of a teacher, the latter “stands, to a certain extent, in loco parentis as to the
student and is called upon to exercise reasonable supervision over the conduct of the
student.” Likewise, “the phrase used in [Art. 2180 — ‘so long as (the students) remain in
their custody means the protective and supervisory custody that the school and its heads
and teachers exercise over the pupils and students for as long as they are at attendance
in the school, including recess time.”

In line with the case of Palisoc, a student not "at attendance in the school" cannot be in
"recess" thereat. A "recess," as the concept is embraced in the phrase "at attendance in
the school," contemplates a situation of temporary adjournment of school activities
where the student still remains within call of his mentor and is not permitted to leave
the school premises, or the area within which the school activity is conducted. Recess by
its nature does not include dismissal. Likewise, the mere fact of being enrolled or
being in the premises of a school without more does not constitute
"attending school" or being in the "protective and supervisory custody" of
the school, as contemplated in the law

Jimmy B. Abon cannot be considered to have been “at attendance in the school,” or in
the custody of BCF, when he shot Napoleon Castro. Logically, therefore, petitioners
cannot, under Art. 2180 of the Civil Code, be held solidarity liable with Jimmy B. Abon
for damages resulting from his acts.
PHILIPPINE RABBIT BUS LINES and FELIX PANGALANGAN v.
PHIL-AMERICAN FORWARDERS, ARCHIMEDES BALINGIT, and
FERNANDO PINEDA
1975 / Aquino / Appeal from CFI order

FACTS:
Pineda recklessly drove a freight truck [owned by ​Phil-American
Forwarders​] along the national highway at Pampanga, and the ​truck bumped the
PRBL bus driven by Pangalangan​. As a result, ​Pangalangan suffered injuries
and the ​bus was damaged and could not be used for 79 days​, thus depriving
PRBL of earnings amounting to P8,665.51. Balingit was the manager of Phil-American
Forwarders.

PRBL and Pangalangan filed a complaint for damages ​against Phil-American

Forwarders, Balingit, and Pineda. Defendants said Balingit was not Pineda’s employer.
Balingit moved that the complaint against him be dismissed on the ground that PRBL
and Pangalangan had no cause of action against him. ​CFI dismissed the complaint
against Balingit​, on the ground that ​he is not the manager of an establishment
as contemplated in NCC 2180​.

ISSUE AND HOLDING

WON the terms “employers” and “owners and managers of an establishment or
enterprise” embrace the manager of a corporation owning a truck, the reckless operation
of which allegedly resulted in the vehicular accident from which the damage arose. ​NO.

RATIO
Those terms do not include the manager of a corporation. It may be gathered from the
context of NCC 2180 that the term “manager” (“director” in the Spanish version) is used
in the sense of “employer”. Hence, no tortious or quasi-delictual liability can be imposed
on Balingit as manager of Phil-American Forwarders, in connection with the vehicular
accident in question, because ​he himself may be regarded as an employee ​or
dependiente ​of Phil-American Forwarders​. ​CFI AFFIRMED.
 JOHNSON vs. DAVID

FACTS:

On the 13th of November, 1903, the plaintiff was riding a bicycle and was passing
over the bridge in front of the Binondo Church in the city of Manila. While proceeding at
a slow rate of speed down the incline from the bridge toward Calle San Fernando and
being on the north side of said bridge, he was run into by the defendant's carriage that
was drawn by one horse and was driven by the cochero of the defendant. The plaintiff
rang the bell of his bicycle to attract the attention of the defendant’s cochero, as he was
unable to stop for the reason that other carriages were coming behind him. It is during
this incident that the plaintiff alleges that he was riding on his bicycle on the left path of
the bridge, as required by the ordinance, and that defendant’s cochero made a detour
with the horse and carriage and attempted to approach said bridge upon the left side in
a diagonal direction.

The plaintiff and the carriage collided, the result of which threw the former to the
ground. Plaintiff alleges that reasonable care was not taken by defendant’s cochero in
driving or approaching the said bridge, and that defendant’s cochero was negligent and
careless in driving defendant’s vehicle, thereby causing the collision, and as the result of
said collision plaintiff’s bicycle was greatly damaged and practically destroyed, being
run over by the horse and carriage after being dashed to the ground; that the plaintiff
was thrown upon his head and shoulders upon the ground. It is important to note that
the defendant was not present in the carriage at the time the accident happened.

ISSUE:

Whether the owner of a carriage driven by his cochero, liable for injuries growing
out of the negligence of said cochero, in the absence of such owner?

HELD:

​ o evidence was adduced during the trial of said cause to show that the
NO. N
defendant had been negligent in the employment of the cochero or that he had any
knowledge that such cochero was incompetent or of the general negligent character of
said cochero, if such existed.

Chapter 2, title 16, book 4 of the Civil Code provides when a person is liable for
his own negligence, as well as for the negligence of others. Said chapter also
enumerates the other persons for whose negligence be shall respond in damages.

Defendant’s cochero or servant was driving his horse and carriage in

the streets of the city of Manila and negligently caused injury to a passenger in
the street. Defendant was not present in the carriage at the time of the alleged
injury. Held, That Defendant was not liable for the damages occasioned by the
negligence of the cochero.

Article 1905 provides that the possessor of an animal, or the one who uses the
same, is liable for the damages it may cause, even when said animal shall escape from
him or stay. No complaint, however, is made here that the injuries caused by the
negligence of the cochero were caused by the animal belonging to the defendant. This
section might, under certain conditions, render either the owner of the animal or the
one using it liable for damages. These sections do not include a liability on the part of
the plaintiff for injuries resulting from acts of negligence such as are complaint of in the
present cause. The defendant not having contributed in any way to the injury
complained of, he is in no wise responsible for the same.
 

Nklpalo vs. Uoherwbbh

M.V. Ob. C-4:<: Alrnk 6;, <4<8

GLNX^0

Xke pcldotdgg
pcldotdgg wls strun
struni
i grba fekdoh loh ruo bver fy tke hegeohlot
hegeohlot's's lutbabfdce.
lutbabfdce. Xke
hegeohlot eotereh Nlcce Kerrlo lt Nlcce Zeülgrlondl do kds lutbabfdce hrdveo fy kds nkluggeur, l
nbapeteot hrdver. L street nlr fbuoh grba Alodcl tb ^lotl Lol fedom daaehdltecy do grbot bg kda,

keeapteh
gbccbweh
ltteap
ltt teh tblcbom
fbl fekdoh
fblrh,
rh, wls dt.
lca]keo
bst dotke
lcabst grbgrbot
ot bgbgtke
grbot tkehegeoh
"^lo
heg Alrnecdob"
eohlot
lot's's lut nlr,
lutbab
babfdc
fdce,tkehegeoh
e, boe
heg tke
eohlot 'spcldotdgg 
lot's hrd
hrdver 
ver 
suhheocy weot tb tke rdmkt loh struni loh rlo bver tke pcldotdgg.
pcldotdgg.

 L nlreguc exladoltdbo
exladoltdbo bg tke renbrh celhs us tb tke nboncusdbo tklt tke hegeohlot's hrdver 
wls mudcty bg oemcdmeone do ruoodom upbo loh bver tke pcldotdgg. Ke wls plssdom lo bonbadom nlr 
upbo tke wrbom sdhe. Xke pcldotdgg, do nbaabo but tb fblrh tke nlr, wls obt bfcdmeh, gbr kds bwo
prbtentdbo, tb bfserve wketker l nlr wls nbadom upbo kda grba kds cegt kloh.

D^^UE^0

]ketker tke bwoer ds sbcdhlrdcy cdlfce2

KECH0

Ob. Xke hegeohlot ds obt respbosd

respbosdfce
fce gbr tke oemcdmeone bg kds hrdver
hrdver,, uoher tke glnts loh
ndrnuastlones bg tkds nlse. Xke hrdver hbes obt glcc wdtkdo tke cdst bg persbos do lrtdnce <4:> bg tke
Ndvdc Nbhe gbr wkbse lnts tke hegeohlot wbuch fe respbosdfce.

 Lo bwoer wkb sdts do kds lutbabfdce, br btker vekdnce, loh peradts kds hrdver tb nbotdoue
do l vdbcltdbo bg tke clw fy tke pergbralone bg oemcdmeot lnts, lgter ke kls klh l relsbolfce
bppbrtuodty tb bfserve tkea loh tb hdrent tklt tke hrdver nelse tkeregrba, fenbaes kdasecg 
respbosdfce gbr sunk lnts.

Bo tke btker kloh, dg tke hrdver, fy l suhheo lnt bg oemcdmeone, loh wdtkbut tke bwoer 
klvdom l relsbolfce bppbrtuodty tb preveot tke lnts br dts nbotdoulone, do`ures l persbo br 
vdbcltes tke nrdadolc clw, tke bwoer bg tke lutbabfdce, lctkbumk preseot tkeredo lt tke tdae tke lnt
wls nbaadtteh, ds obt respbosdfce, edtker ndvdccy br nrdadolccy
nrdadolccy,, tkeregbr. Xke lnt nbapcldoeh bg aust
fe nbotdoueh do tke preseone bg tke bwoer gbr sunk l ceomtk l tdae tklt tke bwoer, fy kds
lnqudesneone, alies kds hrdver's lnt kds bwo.

Do tk
tke
e nl
nlse
se fegb
fegbre
re us dt hb
hbes
es ob
obtt lp
lppe
pelr
lr grba
grba tk
tke
e renb
renbrh
rh tk
tklt
lt,, grba
grba tk
tke
e tdtdae
ae tk
tke
e
lutbabfdce tbbi tke wrbom sdhe bg tke rblh tb tke nbaadssdbo bg tke do`ury, suggdndeot tdae
doterveoeh tb mdve tke hegeohlot lo bppbrtuodty tb nbrrent tke lnt bg kds hrdver.
hrdver. Dostelh, dt lppelrs
wdtk gldr ncelroess tklt tke dotervlc fetweeo tke turodom but tb aeet loh plss tke street nlr loh
tke klppeodom bg tke lnndheot wls sb salcc ls obt tb fe suggdndeot tb nklrme hegeohlot wdtk tke
oemcdmeone bg tke hrdver
hrdver..
 

30 Phil 624

 T
 Torts
orts and Damages
Damages – Due Dili
Diligence
gence as a De
Defense
fense

On May 14, 111, !eynes rented a car from "nternational #arage o$ned and
o%erated &y 'amire() *s %er the arrangement, 'amire( $ould also %ro+ide for the
dri+er and a machinist) !eynes $as to used the car to trans%ort %eo%le from esta
for %rot) The car $as actually &rand ne$ and $as only used a fe$ hours) On May
16, 2011, $hile dri+en on the road, the automo&ile, &y reason of a defect in the
steering gear, refused to o&ey the direction of the dri+er in turning a corner in the
streets, and, as a conse-uence, ran across the street and into the $all of a house
against $hich the daughter of .ahia $as leaning at the time) The front of the
machine struc/ the child in the center of the &ody and crushed her to death)

" hether or not !eynes is lia&le in the case at &ar)

5!D o) hile it may &e said that, at the time of the accident, the chau7eur $ho
$as dri+ing the machine $as a ser+ant of !eynes, in as much as the %rots deri+ed
from the tri%s of the automo&ile &elonged to him and the automo&ile $as o%erated
under his direction, ne+ertheless,
ne+ertheless, this fact is not conclusi+e in ma/ing him
res%onsi&le
res%on si&le for the negligence of the chau7eur or for defects in the automo&ile
itself) *rticle&ut
negligence, 103 of%ro+ides
also the 8i+il $hen
8ode not
thatonly esta&lishes
lia&ility lia&ility
shall cease) in cases of
"t says

 The lia&ility referred

referred to in this a
article
rticle shall cease
cease $hen the %ersons
%ersons menti
mentioned
oned
therein %ro+e that they em%loyed all the diligence of a good father of a family to
a+oid the damages)

9rom this article t$o things are a%%arent :1; That $hen an in<ury is caused &y the
negligence of a ser+ant or em%loyee there instantly arises a %resum%tion of a la$
that there $as negligence on the %art of the master or em%loyer either in the
selection of the ser+ant or em%loyee, or in su%er+ision
su%er+ision o+er him after the selection,
or &oth= and :2; that %resum%tion is <uris tantum and not <uris et de <ure, and
conse-uently, may &e re&utted) "t follo$s necessarily
necessarily that if the em%loyer sho$s to
the satisfaction of the court that in selection and su%er+ision he has e>ercised the
care and diligence of a good father of a family, the %resum%tion is o+ercome and he
is relie+ed from lia&ility)

*s to selection, !eynes has clearly sho$n that he e>ercised the care and diligence of 
a good father of a family) 5e o&tained the machine from a re%uta&le garage and it
$as, so far as a%%eared, in good condition) The $or/men $ere li/e$ise selected
from a standard garage, $ere duly licensed &y the #o+ernment in their %articular
calling, and a%%arently thoroughly com%etent) The car had &een used &ut a fe$
hours $hen the accident occurred and it is clear from the e+idence that !eynes had
no notice, either actual or constructi+e, of the defecti+e condition of the steering
gear)

hile it does not a%%ear that !eynes formulated rules and regulations for the
guidance of the dri+ers and ga+e them %ro%er instructions, designed for the
%rotection
%rotection of the %u&lic and the %assengers, the e+idence sho$s that the death of
 

the child $as not caused &y a failure to %romulgate rules and regulations) "t $as
caused &y a defect in the car as to $hich !eynes has sho$n himself free from
res%onsi&ility)
 ERNESTO MARTIN V. CA AND MERALCO

G.R. No. 82248 January 30, 1992

FACTS:

Ernesto Martin was the owner of a private car bearing license plate No.
NPA-930. At around 2 o’clock in the morning of May 11, 1982, while being driven by
Nestor Martin, it crashed into a Meralco electric post on Valley Golf Road, in Antipolo,
Rizal. The car was wrecked and the pole severely damaged. Meralco subsequently
demanded reparation from Ernesto Martin, but the demand was rejected. It thereupon
sued him for damages in the Regional Trial Court of Pasig, alleging that he was liable to
it as the employer of Nestor Martin. The petitioner’s main defense was that Nestor
Martin was not his employee. Meralco did not present any evidence to prove that Nestor
Martin was the employee of Ernesto Martin and Ernesto Martin did not rebut such
allegation.

ISSUE:

WON Ernesto Martin can be held liable.

HELD:

NO. Meralco had the burden of proof, or the duty “to present evidence on the fact
in issue necessary to establish his claim” as required by Rule 131, Section 1 of the
Revised Rules of Court. Failure to do this was fatal to its action. As the employment
relationship between Ernesto Martin and Nestor Martin could not be presumed, it was
necessary for the plaintiff to establish it by evidence. It was enough for the defendant to
deny the alleged employment relationship, without more, for he was not under
obligation to prove this negative averment. This Court has consistently applied the rule
that “if the plaintiff, upon whom rests the burden of proving his cause of action, fails to
show in a satisfactory manner the facts upon which he bases his claim, the defendant is
under no obligation to prove his exception or defense.” Petition was granted.
 WALTER SMITH & CO. v CADWALLADER GIBSON, 55 Phil 517

FACTS: A steamer “Helen C” belonging to Cadwallader struck Smith’s old wharf being
moored by its captain in the port of Olutanga, Zamboanga, partially demolishing it and
throwing the lumber piled thereon in the water. Smith brought suit against Cadwallader
for damages to the wharf and the loss of the lumber.

The defendant denied the plaintiff's causes of action, and in defense alleged that the
demolition of the wharf was due to the excessive weight of thousands of board feet of
timber piled upon it by the plaintiff to be loaded and shipped on the steamer ​Helen C
and to the bad condition of the piles supporting said wharf. Cadwallader maintained
that Captain Lasa and all the officers of his steamer were duly licensed and authorized to
hold their respective positions at the time wharf in question collapsed, and that all the
members of the crew had been chosen for their reputed skill in directing and navigating
the steamer carefully and efficiently.

The lower court dismissed the case, and ruled that yes, the steamer ​Helen C ​slightly
struck the dock but not with force and the demolition of the dock was due to its bad
condition.

ISSUE: Is Cadwallader Lumber liable for damages due to negligence?

RULING: No. The evidence shows that Captain Lasa at the time the plaintiff’s wharf
collapsed was a duly licensed captain, authorized to navigate and direct a vessel of any
tonnage, and that Cadwallader contracted his services because of his reputation as a
captain. This being so, we are of the opinion that the presumption of liability against the
defendant has been overcome by the exercise of the care and diligence of a good father
of a family in selecting Captain Lasa, in accordance with the doctrines laid down by this
court Cadwallader is therefore absolved from all liability.
Radio Corporation vs CA (103 SCRA 359)

Facts:
Yabut Freight Express, Inc., et al filed a suit for damages against Radio Communications of
the Philippines, Inc. (RCPI) for alleged negligence of its personnel in transmitting a telegram
which should have read "No truck available" but instead read "Truck available." As a
consequence, the freight company suffered damages

TC: awarded damages to Yabut

CA: affirmed

Issue: Whether RCPI is liable?

Ruling: the error in the transmission of the telegram was due to the gross negligence of
RCPI employees and not to atmospheric disturbances as it claimed, and that there was no
contributory negligence on the part of the freight company.

Compensatory damages were also awarded for injury to Yabut’s "business reputation or
business standing", "loss of goodwill and loss of customers or shippers who shifted their
patronage to competitors." The grant thereof is proper under the provision of Article 2205 of
the Civil Code, which provides that damages may be recovered "for injury to the plaintiff’s
business standing or commercial credit."
 PHILIPPINE AIR LINES, INC., vs. THE COURT OF APPEALS and JESUS V. SAMSON,  
G.R. No. L-46558 : July 31, 1981 
 
 
FACTS: 
 
The  complaint  filed  on  July  1,  1954  by  plaintiff  Jesus  V.  Samson,  private  respondent  herein,  averred  that  on 
January  8,  1951,  he  flew  as  co-pilot  on  a  regular  flight  from  Manila  to  Legaspi  with  stops  at  Daet,  Camarines 
Norte  and  Pili,  Camarines  Sur,  with  Captain  Delfin Bustamante as commanding pilot of a C-47 plane belonging to 
defendant  Philippine  AirLines,  Inc.,  now  the  herein  petitioner;  that  on  attempting  to  land  the  plane  at  Daet 
airport,  Captain  Delfin Bustamante due to his very slow reaction and poor judgment overshot the airfield and as a 
result,  notwithstanding  the  diligent  efforts  of  the  plaintiff  co-pilot  to avert an accident, the airplane crash landed 
beyond  the  runway;  that  the  jolt  caused  the  head  of  the  plaintiff  to  hit  and  break  through  the  thick  front 
windshield  of  the  airplane  causing  him  severe  brain  concussion,  wounds  and  abrasions  on  the  forehead  with 
intense pain and suffering cranad.  
 
The  complaint  further  alleged  that  instead  of  giving  plaintiff  expert  and  proper  medical  treatment  called  for  by 
the  nature  and  severity  of  his  injuries,  defendant  simply  referred  him  to  a  company  physician,  a  general  medical 
practitioner,  who  limited  the  treatment  to  the  exterior injuries without examining the severe brain concussion of 
plaintiff  defendant  airline  company  instead  of  submitting  the  plaintiff  to  expert  medical  treatment,  discharged 
the  latter  from  its  employ  on  December  21,  1953  on  grounds  of  physical  disability,  thereby  causing  plaintiff  not 
only  to  lose  his  job  but  to  become  physically  unfit  to  continue  as  aviator  due  to  defendant’s  negligence  in  not 
giving  him  the  proper  medical  attention  cranad(pars.  10-11,  complaint).  Plaintiff  prayed for damages. Defendant 
PAL  denied  the  substantial  averments  in  the  complaint,  alleging  among  others,  that  the  accident  was  due  solely 
and  exclusively  to  inevitable  unforeseen  circumstances  whereby  plaintiff  sustained  only  superficial  wounds  and 
minor  injuries  which  were  promptly  treated  by  defendant’s  medical  personnel  cranad(par.  5,  answer);  that 
plaintiff  did  not  sustain  brain  injury  or  cerebral  concussion  from the accident since he passed the annual physical 
and  medical  examination  given  thereafter  on  April  24,  1951;  that  the  headaches  and  dizziness  experienced  by 
plaintiff  were  due  to  emotional  disturbance  over  his  inability  to  pass  the  required  up-grading  or  promotional 
course given by defendant company 
 
The  pilot,  Captain  Delfin  Bustamante, was a competent and proficient pilot, and although he was already afflicted 
with  a  tumor  of  the  nasopharynx  even  before  the  accident  of  January  8,  1951,  the  Civil  Aeronautics 
Administration,  in  passing  upon  the  fitness  of  pilots,  gave  Capt.  Bustamante  a  waiver  of  physical  standards  to 
enable him to retain his first class airman certificate. 
 
DECISION OF LOWER COURTS: 
 
1. RTC: ordering the defendant to pay the plaintiff, 
2.  CA:  Plaintiff-Appellee,  who  has  been  deprived  of  his  job  since  1954,  is  entitled  to  the  legal  rate  of  interest  on 
the P198,000.00 unearned income from the filing of the complaint 
 
ISSUE: 
 
Is there a causal connection between the injuries suffered by private respondent during the accident on 8 January 
1951  and  the  subsequent  “periodic  dizzy  spells,  headache  and  general  debility”  of  which  private  respondent 
complained  every  now  and  then,  on  the  one  hand,  and  such  “periodic dizzy spells, headache and general debility” 
allegedly caused by the accident and private respondent’s eventual discharge from employment, on the other? 
 
RULING: 
 
Yes.  The  dizzy  spells,  headache  and  general  debility  of  private  respondent  Samson  was  an  after-effect  of  the 
crash-landing.We  also  find  the  imputation  of  gross  negligence  by  respondent  court  to  PAL  for  having  allowed 
Capt.  Delfin  Bustamante  to  fly  on  that  fateful  day  of  the  accident  on  January  8,  1951.  The  pilot  was  sick.  He 
admittedly  had  a  tumor  of  the  nasopharynx  cranad(nose).  He  is  now  in  the  Great  Beyond.  The  spot  is  very  near 
the  brain  and  the  eyes.  Tumor  on  the  spot  will  affect  the  sinus,  the  breathing, the eyes which are very near it. No 
one  will  certify  the  fitness  to  fly  a  plane  of  one  suffering  from  the  disease.  The  evidence  shows  that  the 
overshooting  of  the  runaway  and  crash-landing  at  the  mangrove  was  caused  by  the  pilot  for  which  acts  the 
defendant  must  answer  for  damages  caused  thereby.  And  for  this  negligence  of  the  defendant's  employee,  it  is 
liable. 
 
The  fact  that  the  private  respondent  suffered  physical  injuries  in  the  head  when  the  plane  crash-  landed  due  to 
the  negligence  of  Capt.  Bustamante  is  undeniable.  The  negligence  of  the  latter  is  clearly  a  quasi-delict  and 
therefore Article 2219, cranad(2) New Civil Code is applicable, justifying the recovery of moral damages. 
The  justification  in  the  award  of  moral  damages  under  Art.  19  of  the  New  Civil  Code  on  Human Relations which 
requires  that  every  person  must,  in the exercise of his rights and in the performance of his duties, act with justice, 
give everyone his due, and observe honesty and good faith 
 University of the Philippines
College of Law
MNL | D2021

Topic Persons liable - Employers

Case No. 2 SCRA 527
Case Name Belizar vs Brazos
Ponente LABRADOR, J.

RELEVANT FACTS

This is an appeal from an order of the Court of First Instance of Samar dated June 6, 1959,
dismissing the complaint filed before it.
1. On April 21, 1959, Pedro Ty Belizar filed a complaint against Florencio Brazas, Felix
Hilario, Lucio Baldonilo alleging that he is operating the Samar Express Transit; that
defendants are being used in their capacity as employees (of the Bureau of Public
Highways); that due to their gross negligence in not providing the ferry boat with safety
devices, one of his auto-trucks, while being transported from one bank of the Taft River,
Taft, Samar, to the other, fell into the river and was submerged in water for over 30 hours;
that as a consequence thereof, he suffered actual and moral damages and had to hire
counsel to prosecute this action.
2. Hilario’s defense: denies the material allegations and alleging as special defense that he
is working only under the instructions of his superiors.
3. Defendants Lucio Baldonilo, Felix Balato, Teodoro Balato and Todesco Cebuano filed a
motion to dismiss on the grounds that the complaint states no cause of action and that
they are not the real parties in interest.
4. The remaining defendant Florencio Brazas filed another motion to dismiss on May 20,
1959, claiming that the plaintiff has no cause of action against the defendants because
they are being sued in their official capacities and therefore the claim for damages should
be directed against the State.
5. Lower court: case dismissed.
6. Appeal - this care rn.

Issue Ratio
W/N the lower court is NO. Lower court is wrong. There’s a cause of action against the
correct in dismissing the defendants.
case
1. although the Government is the one operating the ferry boat,
Ie. W/N there is no cause from which plaintiffs truck fell, because of the absence of safety
of action against the devices, the plaintiff has elected to sue the defendant
defendants since this is a employees personally for their negligent acts under the doctrine
case against the of quasi-delict
Government (their 2. Article 2180 of the Civil Code provides for the liability of an
employer) employer for the tortuous acts of his employees. This, however,
does not exempt the employees from personal liability,
especially if there are no persons having direct supervision over
them, or if there is proof of the existence of negligence on their
part.
 - the injured party can bring an action directly against the
author of the negligent act or omission, although he may
sue as joint defendants such author and the person
responsible for him

RULING

In view of the foregoing we find that the dismissal of complaint is not justified, and for this
reason, we hereby set aside the order of dismissal appealed from and remanded the case to the
court of origin for further proceedings. With costs against the defendants-appellees.
FELIX LANUZO vs. SY BON PING and SALVADOR MENDOZA

FACTS: A Complaint for damages was instituted by the plaintiff against Sy Bon Ping, the
owner and operator of a freight truck, and his driver, Salvador Mendoza. As alleged
therein, while Salvador Mendoza was driving the truck along the national highway in the
Barrio of San Ramon, Nabua, Camarines Sur, and because of his reckless negligence, we
rammed into the residential house and store of plaintiff. As a result, the house and store
were completely razed to the ground causing damage to plaintiff in the total amount of
P13,000.00. Plaintiff averred that by reason thereof he became destitute as he lost his
means of livelihood from the store which used to give him a monthly income of
P300.00.

On August 13, 1970, the trial Court rendered a default judgment in plaintiff's favor. The
judgment ordered the defendants to pay jointly and severally the amount of P13,000.00
as damages, resulting to the loss of the store including the merchandise for sale therein,
the residential house of mixed materials, furnitures, clothing and households fixtures. It
also ordered the said defendants to pay jointly and severally P300.00 monthly from July
24, 1969 which represents plaintiff's monthly income from his store until the whole
amount of P13,000.00 is fully paid; and for attorney's fees an amount equivalent to 20%
of the total amount claimed by the plaintiff, plus the costs of this suit.

ISSUE: WON the lower Court committed an error in holding them jointly and severally
liable.

HELD: For his own negligence in recklessly driving the truck owned and operated by his
employer, the driver, Salvador Mendoza, is primarily liable under Article 2176 of the
Civil Code. On the other hand, the liability of his employer, Sy Bon Ping, is also primary
and direct under Article 2180 of the same Code, which explicitly provides: ​Employers
shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in
any business or industry.

For failure of the appellant Sy Bon Ping to rebut the legal presumption of his negligence
in the selection and supervision of this employee, he is likewise responsible for the
damages caused by the negligent act of his employee (driver) Salvador Mendoza, and his
liability is primary and solidary.

What needs only to be alleged under the aforequoted provision (Article 2180, Civil
Code) is that the employee (driver) has, by his negligence (quasi-delict) caused damage
to make the employer, likewise, responsible for the tortious act of the employee, and his
liability is, as earlier observed, primary and solidary But although the employer is
solidarily liable with the employee for damages, the employer may demand
reimbursement from his employee (driver) for whatever amount the employer will have
to pay the offended party to satisfy the latter's claim.
Merrit vs. Government of the Philippine Islands

FACTS: Merrit was riding a motorcycle along Padre Faura Street when he was bumped
by the ambulance of the General Hospital. By reason of the resulting collusion, the
plaintiff was so severely injured that, according to Dr. Saleeby, he was suffering from a
depression in the left parietal region, a wound in the same place and in the back part of
his head, while blood issued from his nose and he was entirely unconscious. The marks
revealed that he had one or more fractures of the skull and that the grey matter and
brain had suffered material injury.

Upon recovery the doctor noticed that the plaintiff’s leg showed a contraction of an inch
and a half and a curvature that made his leg very weak and painful at the point of the
fracture. Examination of his head revealed a notable readjustment of the functions of
the brain and nerves. The damages that the plaintiff got from the collision disabled him
to do this work as a contractor and forced him to give up contracts he recently had.

The legislature later enacted Act 2457 authorizing Merritt to file a suit against the
Government in order to fix the responsibility for the collision between his motorcycle
and the ambulance of the General Hospital, and to determine the amount of the
damages, if any, to which he is entitled. After trial, the lower court held that the
collision was due to the negligence of the driver of the ambulance. It then determined
the amount of damages and ordered the government to pay the same.

ISSUES: ​1. Did the Government, in enacting the Act 2457, simply waive its immunity
from suit or did it also concede its liability to the plaintiff?

2. Is the Government liable for the negligent act of the driver of the ambulance?

HELD:

1. By consenting to be sued a state simply waives its immunity from suit. It does not
thereby concede its liability to plaintiff, or create any cause of action in his favor, or
extend its liability to any cause not previously recognized. It merely gives a remedy to
enforce a preexisting liability and submits itself to the jurisdiction of the court, subject
to its right to interpose any lawful defense.

2. Under the Civil Code, the state is liable when it acts through a special agent, but not
when the damage should have been caused by the official to whom properly it pertained
to do the act performed. A special agent is one who receives a definite and fixed order or
commission, foreign to the exercise of the duties of his office if he is a special official.
This concept does not apply to any executive agent who is an employee of the acting
administration and who on his own responsibility performs the functions which are
inherent in and naturally pertain to his office and which are regulated by law and the
regulations.
The state is not responsible for the damages suffered by private individuals in
consequence of acts performed by its employees in the discharge of the functions
pertaining to their office, because neither fault nor even negligence can be presumed on
the part of the state in the organization of branches of public service and in the
appointment of its agents. In addition, the driver of the ambulance of the General
Hospital was not a special agent; thus the Government is not liable.

The State is not liable for the torts committed by its officers or agents whom it employs,
except when expressly made so by legislative enactment. The government does not
undertake to guarantee to any person the fidelity of the officers or agents whom it
employs since that would involve it in all its operations in endless embarrassments,
difficulties and losses, which would be subversive of the public interest. ​(Merritt vs.
Government of the Philippine Islands)
 GENSON v ADARLE

FACTS: ​Arbatin was the successful bidder in a public auction of junk and other
unserviceable government property in the Highway District Engineer’s Office of Roxas
City. Arbatin then employed Adarle to help him haul the junk. On a non-working day,
when Adarle and Buensalido, the driver of the payloader, were at the site continuing to
gather the junk, a bucket from the payloader fell and injured Adarle to the point of
paralyzing his lower extremities. Adarle instituted an action against Arbatin,
Buensalido, Marcelino (Civil Engineer), and Genson (Highway District Engineer). RTC
ruled in favor of Adarle. IAC modified the previous ruling, absolving Marcelino from
liability, and averring that the liability of Genson is based on fault, by allowing Arbatin
and his men to work on the premises on a non-working day, in contravention of his
office’s policy. Petitioner Genson then appealed the decision to the SC, stating that the
facts upon which the IAC declared that his liability is based on fault by allowing the men
to work on a non-working holiday is without basis. Furthermore, he contends that by
filing a suit against him, Adarle is then filing a suit against the Republic, which violates
the non-suability of the State.

ISSUE: ​Whether or not Genson should be held liable, personally or officially?

HELD: NO​. With regard to the non-suability contention, Adarle filed a suit against
Genson personally, in his capacity as the Highway District Engineer, and not the State
or his office. As for the main issue, there was no evidence to prove Genson’s presence
when the accident occurred, nor was there any basis for the lower courts to hold that
Genson was at fault by authorizing Arbatin and his men to work on a non-working day.
It might even be proven that working on a Saturday for the specific purpose of hauling
junk would be the time when the most work can be done, as it has less traffic. The
Master-Servant doctrine in tort law cannot apply either, since despite the fact that
Buensalido, Genson’s employee, was “moonlighting” on a non-working holiday,
Buensalido’s arrangement with Arbatin was purely private in nature, and had nothing to
do with his being employed under Genson. Thus, absent the showing of malice, bad faith
or gross negligence on the part of Genson, he cannot be held liable for the acts
committed by Buensalido and Arbatin.
 REPUBLIC OF THE PHILIPPINES,​ petitioner,

vs.

HON. PERFECTO R. PALACIO, as Judge of the Court of First Instance of

Camarines Sur,

MACARIO M. OFILADA, as ex-officio Sheriff of Manila, and ILDEFONSO

ORTIZ,​ respondents.

G.R. No. L-20322 [ May 29, 1968]

Facts: ​Ildefonso Ortiz instituted a civil action against the Handog Irrigation
Association, Inc, a corporation, and the irrigation Service Unit, an office under the
Department of Public Works and Communications to recover possession, with damages,
a 958 sqm lot which the Irrigation Association allegedly entered and occupied. For
failure to answer, the defendants were declared in default. Later, The Republic, through
the Solicitor General, moved for the dismissal of the complaint on the ground that the
Irrigation Service Unit(ISU) has no juridical entity to sue and be sued. The motion was
denied on the ground that defendant is engaged in the business of selling irrigation
pumps on installment plan. A writ of execution was issued and later on a writ of
garnishment was issued against the deposit/trust fund of the ISU with Philippine
National Bank. The Solicitor General moved for the lifting of the order on the ground
that the trust fund is a public fund exempt from garnishment. On appeal, the CA
sustained the validity of the writ.

ISSUE: ​Whether or not the ISU may be sued and the trust fund be the subject of
garnishment.

RULING: ​No. The Court ruled that the ISU is a government agency engaged in the
administration of irrigation system to promote an economic policy of sustaining
development and growth in agriculture. Aside from being an agency of the government
pursuing a governmental function, the fact that it is collecting payment for irrigation
pumps will not make the ISU one engaged in business. The installment payment being
collected is not for profit but merely for the purpose of financing the cost of the pump
and its maintenance and administration.

In addition, although the State allowed its self to be sued, the trust fund may not be
automatically the subject of garnishment due to the fact that it is a public fund. Being a
public fund, it may only be appropriated by law and may not be use for garnishment at
the expense of the public.
Republic vs Sandoval

FACTS: Farmer-rallyists marched to Malacanang calling for a genuine land reform

program. There was a marchers-police confrontation which resulted in the death of 12
rallyists and scores were wounded. As a result, then Pres. Aquino issued AO 11 creating
the Citizens Mendiola Commission for the purpose of conducting an investigation. The
most significant recommendation of the Commission was for the heirs of the deceased
and wounded victims to be compensated by the government. Based on such
recommendation, the victims of Mendiola massacre filed an action for damages against
the Republic and the military/police officers involved in the incident.

ISSUE: (1) Whether or not there is a valid waiver of immunity (2) Whether or not the
State is liable for damages

DECISION: Denied

RATIO DECIDENDI: The Court held that there was no valid waiver of immunity as
claimed by the petitioners. The recommendation made by the Commission to indemnify
the heirs of the deceased and the victims does not in any way mean that liability attaches
to the State. AO 11 merely states the purpose of the creation of the Commission and,
therefore, whatever is the finding of the Commission only serves as the basis for a cause
of action in the event any party decides to litigate the same. Thus, the recommendation
of the Commission does not in any way bind the State. The State cannot be made liable
because the military/police officers who allegedly were responsible for the death and
injuries suffered by the marchers acted beyond the scope of their authority. It is a settled
rule that the State as a person can commit no wrong. The military and police officers
who were responsible for the atrocities can be held personally liable for damages as they
exceeded their authority, hence, the acts cannot be considered official.
Shauf v. Court of Appeals G.R. No. 90314, 27 November 1990
10
JAN
Second Division

[REGALADO, J.]

FACTS: Petitioner Loida Q. Shauf filed a complaint for damages against private respondents Don
Detwiler and Anthony Persi before the Regional Trial Court, Branch LVI at Angeles City for the alleged
discriminatory acts of herein private respondents in maliciously denying her application for the GS 1710-9
position in Clark Air Base. Private respondents, as defendants, filed a motion to dismiss on the ground
that as officers of the United States Armed Forces performing official functions in accordance with the
powers vested in them under the Philippine-American Military Bases Agreement, they are immune from
suit.

ISSUE: Can the private respondents validly set up the defense invoking the doctrine of immunity from
suit?

HELD: NO.

While the doctrine appears to prohibit only suits against the state without its consent, it is also applicable
to complaints filed against officials of the state for acts allegedly performed by them in the discharge of
their duties. The rule is that if the judgment against such officials will require the state itself to perform an
affirmative act to satisfy the same, such as the appropriation of the amount needed to pay the damages
awarded against them, the suit must be regarded as against the state itself although it has been formally
impleaded. It must be noted, however, that the rule is not also all-encompassing as to be applicable under
all circumstances.

There is no doubt that private respondents Persi and Detwiler, in committing the acts complained of have,
in effect, violated the basic constitutional right of petitioner Loida Q. Shauf to earn a living which is very
much an integral aspect of the right to life. For this, they should be held accountable.
Guilatco vs. City of Dagupan
171 SCRA 382 (Mar 21, 1989)

Facts: Florentina Guilatco, a Court Interpreter, wa

s about to board a tricycle along a sidewalk when she accidentally fell into a manhole
that was partially covered by a concrete flower pot leaving a gaping hole about 2 ft long
by gaping hole. Florentina suffered a fracture on her right leg and as result thereof, had
to be hospitalized. Florentina averred that she suffered mental and physical pain, and
that she has difficulty in locomotion. She became incapable of reporting for duty within
quite some time and thus lost income. She also lost weight, and is no longer her former
jovial self.

Florentina sued the City of Dagupan. The City contends that the manhole is owned by
the National Gov’t and the sidewalk on which it is found is located in Perez Blvd., which
was also under the supervision of the National Government. While the lower court held
the City of Dagupan liable, the appellate court reversed the ruling on the ground that no
evidence was presented to prove that the City of Dagupan had "control or supervision"
over the Boulevard, where the manhole is located.

Issue: Whether or not the City of Dagupan is liable for damages?

Ruling: Yes. The City of Dagupan is liable for damages. The liability of public
corporations for damages arising from injuries suffered by pedestrians by reason of the
defective condition of roads is expressed in the Art. 2189 of Civil Code, which states:
Provinces, cities and municipalities shall be liable for damages for the death of, or
injuries suffered by, any person by reason of the defective condition of roads, streets,
bridges, public buildings, and other public works under their control or supervision.

For liability to attach, it is not even necessary for the defective road or street to belong to
the province, city or municipality. The article only requires that either control or
supervision is exercised over the defective road or street.

In the case at bar, this control or supervision is provided for in the charter of Dagupan
City and is exercised through the City Engineer. This function of supervision over
streets, public buildings, and other public works is coursed through a Maintenance
Foreman and a Maintenance Engineer. Although these last two officials are employees
of the National Government, they are detailed with the City of Dagupan and receive
instruction and supervision from the city through the City Engineer.

The express provision in the charter holding the city not liable for damages or injuries
sustained by persons or property due to the failure of any city officer to enforce the
provisions of the charter, cannot be used to exempt the city from liability. The charter
only lays down general rules regulating the liability of the city. On the other hand article
2189 applies in particular to the liability arising from "defective streets, public buildings
and other public works.
BERNARDINO JIMENEZ vs. CITY OF MANILA and IAC
--- “for the love of bagoong”
--- For the liability under Article 2189 of the Civil Code to attach, it is not necessary
that the defective public works belong to the province, city or municipality from which
responsibility is exacted. What said article requires is that the province, city or
municipality has either "control or supervision" over the public building in question.
--- Exercise of the diligence of a good father of a family is a defense against liability on
the basis of a quasi-delict.

FACTS: ​In the morning of August 15, 1974 he, together with his neighbors, went to Sta.
Ana public market to buy "bagoong" at the time when the public market was flooded
with ankle deep rainwater. After purchasing the "bagoong" he turned around to return
home but he stepped on an uncovered opening which could not be seen because of the
dirty rainwater, causing a dirty and rusty 4-inch nail, stuck inside the uncovered
opening, to pierce the left leg of plaintiff-petitioner penetrating to a depth of about one
and a half inches. After administering first aid treatment at a nearby drugstore, his
companions helped him hobble home. He felt ill and developed fever and he had to be
carried to Dr. Juanita Mascardo. Despite the medicine administered to him by the latter,
his left leg swelled with great pain. He was then rushed to the Veterans Memorial
Hospital where he had to be confined for twenty (20) days due to high fever and severe
pain.

Upon his discharge from the hospital, he had to walk around with crutches for (15) days.
His injury prevented him from attending to the school buses he is operating. As a result,
he had to engage the services of one Bienvenido Valdez to supervise his business for an
aggregate compensation of (P900).

Petitioner sued for damages the City of Manila and the Asiatic Integrated Corporation
under whose administration the Sta. Ana Public Market had been placed by virtue of a
Management and Operating Contract.

The lower court dismissed the complaint. CA held the Asiatic Integrated Corporation
liable for damages but absolved respondent City of Manila. Hence this petition.

Both defendants do not deny that plaintiff was in fact injured. However, Asiatic
Integrated Corporation tries to minimize the extent of the injuries, claiming that it was
only a small puncture and that as a war veteran, plaintiff's hospitalization at the War
Veteran's Hospital was free.

For its part, the City of Manila’s defenses are

1) under the Management and Operating Contract, Asiatic Integrated Corporation
assumed all responsibility for damages which may be suffered by third persons for any
cause attributable to it
2) Art. 1, Sec. 4 of RA 409 as amended (Revised Charter of Manila) which provides:
The City shall not be liable or held for damages or injuries to persons or property arising
from the failure of the Mayor, the Municipal Board, or any other City Officer, to enforce
the provisions of this chapter, or any other law or ordinance, or from negligence of said
Mayor, Municipal Board, or any other officers while enforcing or attempting to enforce
said provisions.
3) plaintiff Jimenez should not have gone to the market to buy bagoong on a rainy day

ISSUE: WON City of Manila should be jointly and severally liable with Asiatic
Integrated Corporation for the injuries petitioner suffered

Which should apply - the provision under the Revised Charter of Manila or Art. 2189 of
the Civil Code?

HELD:​ Yes; Art. 2189

This issue has been laid to rest in the case of City of Manila v. Teotico (1968) where the
Supreme Court squarely ruled that RA No. 409 establishes a general rule regulating the
liability of the City of Manila for "damages or injury to persons or property arising from
the failure of city officers" to enforce the provisions of said Act, "or any other law or
ordinance or from negligence" of the City "Mayor, Municipal Board, or other officers
while enforcing or attempting to enforce said provisions."

Upon the other hand, Article 2189 of the Civil Code of the Philippines which provides
that:
Provinces, cities and municipalities shall be liable for damages for the death of, or
injuries suffered by any person by reason of defective conditions of roads, streets,
bridges, public buildings and other public works under their control or supervision.
constitutes a particular prescription making "provinces, cities and municipalities ...
liable for damages for the death of, or injury suffered by any person by reason" —
specifically — "of the defective condition of roads, streets, bridges, public buildings, and
other public works under their control or supervision."

In the same suit, the Supreme Court clarified further that under Article 2189 of the Civil
Code, it is not necessary for the liability therein established to attach, that the defective
public works belong to the province, city or municipality from which responsibility is
exacted. What said article requires is that the province, city or municipality has either
"control or supervision" over the public building in question.

In the case at bar, there is no question that the Sta. Ana Public Market, despite the
Management and Operating Contract between respondent City and Asiatic Integrated
Corporation remained under the control of the former. As evidenced by:
1) contract between the City and Asiatic (prior approval of the City of Manila is needed
before the program of improvement, rehabilitation and reconstruction of the public
market may be made by Asiatic; if the present employees/personnel of the city public
market will be discharged by Asiatic;)
2) fact of supervision and control of the City over subject public market was admitted by
Mayor Ramon Bagatsing in his letter to Secretary of Finance Cesar Virata.
3) the City employed a market master for the Sta. Ana Public Market whose primary
duty is to take direct supervision and control of that particular market, more specifically,
to check the safety of the place for the public

As a defense against liability on the basis of a quasi-delict, one must have exercised the
diligence of a good father of a family. (Art. 1173 of the Civil Code)

The contention of respondent City of Manila that petitioner should not have ventured to
go to Sta. Ana Public Market during a stormy weather is indeed untenable. It is the duty
of the City of Manila to exercise reasonable care to keep the public market reasonably
safe for people frequenting the place for their marketing needs.

While it may be conceded that the fulfillment of such duties is extremely difficult during
storms and floods, it must however, be admitted that ordinary precautions could have
been taken during good weather to minimize the dangers to life and limb under those
difficult circumstances.

For instance, the drainage hole could have been placed under the stalls instead of on the
passageways. Even more important is the fact, that the City should have seen to it that
the openings were covered. Sadly, the evidence indicates that long before petitioner fell
into the opening, it was already uncovered, and (5) months after the incident happened,
the opening was still uncovered. Moreover, while there are findings that during floods
the vendors remove the iron grills to hasten the flow of water, there is no showing that
such practice has ever been prohibited, much less penalized by the City of Manila.
Neither was it shown that any sign had been placed thereabouts to warn passersby of the
impending danger.

Petitioner had the right to assume that there were no openings in the middle of the
passageways and if any, that they were adequately covered. Had the opening been
covered, petitioner could not have fallen into it. Thus the negligence of the City of
Manila is the proximate cause of the injury suffered, the City is therefore liable for the
injury suffered by the petitioner.

Thus, City of Manila and Asiatic Integrated Corporation being joint tort-feasors are
solidarily liable under Article 2194 of the Civil Code.
City of Manila vs IAC
Date: November 15, 1989
Petitioners:
Petitioners: City of Manila and Evangeline !va
"es#ondents: IAC, Irene to$ Domingo, et al

Ponente: Paras

%a&ts: 'iven&io to$

to$ Domingo, r$
r$ died and (as b!ried in Nort) Cemetery ()i&) lot
(as leased by t)e &ity to Irene to$ Domingo for t)e #eriod from *!ne +, 191 to
 *!ne +, -.-1$ /)e
/)e (ife #aid t)e f!ll amo!nt
amo!nt of t)e lease$ A#art, )o(ever from t)e
re&ei#t, no ot)er do&!ment embodied s!&) lease over t)e lot$ 0elieving t)at t)e
lease (as only for ve years, t)e &ity &ertied t)e lot as ready for e2)!mation$
3n t)e basis of t)e &erti&ation, *ose#) 4elm!t) a!t)oried t)e e2)!mation
and removal of t)e remains of 'i&en&io$ 4is bones (ere #la&ed in a bag and 6e#t in
t)e bodega of t)e &emetery$ /)e lot (as also leased to anot)er lessee$ D!ring t)e
ne2t all so!ls day, t)e #rivate res#ondents (ere s)o&6ed to nd o!t t)at 'i&en&io7s
remains (ere removed$ /)e &emetery told Irene to loo6 for t)e bones of t)e
)!sband in t)e bodega$
Aggrieved, t)e (ido( and t)e &)ildren bro!g)t an a&tion for damages against
t)e City of Manila Evangeline !va of t)e City 4ealt) 3&e ergio Mallari, o&er
in&)arge of t)e Nort) Cemetery and *ose#) 4elm!t), t)e latter;s #rede&essor
#rede&essor as
o&erin&)arge of t)e said b!rial gro!nds o(ned and o#erated by t)e City
<overnment of Manila$ /)e &o!rt ordered defendants to give #lainti=s t)e rig)t to
ma6e !se of anot)er lot$ /)e CA armed and in&l!ded t)e a(ard of damages in
favor of t)e #rivate res#ondents$
res#ondents$

Iss!e: >3N t)e o#erations and

and f!n&tions of a #!bli&
#!bli& &emetery are
are a governmental,
or a &or#orate or #ro#rietary f!n&tion of t)e City of Manila$

4eld
4eld:: Pro#
Pro#ri
riet
etar
ary
y

"atio: Petitioners alleged in t)eir #etition t)at t)e Nort) Cemetery is e2&l!sively
devoted for #!bli& !se or #!r#ose as stated in e&$ ?1+ of t)e Com#ilation of t)e
3rdinan&es of t)e City of Manila$ /)ey &on&l!de t)at sin&e t)e City is a #oliti&al
s!bdivision
s!bdivision in t)e #erforman&e of its governmental f!n&tion, it is imm!ne from tort
liability ()i&) may be &a!sed by its #!bli& o&ers and s!bordinate em#loyees$
Private res#ondents maintain t)at t)e City of Manila entered into a &ontra&t of lease
()i&) involve t)e e2er&ise of #ro#rietary f!n&tions (it) Irene to$ Domingo$ /)e &ity
and its o&ers t)erefore &an be s!ed for anyviolation of t)e &ontra&t of lease$
 /)e City of Manila
Manila is a #oliti&al
#oliti&al body &or#orate
&or#orate and as s!&)
s!&) endo(ed
endo(ed (it) t)e
fa&!lties of m!ni&i#al &or#orations to be e2er&ised by and t)ro!g) its &ity
government in &onformity
&onformity (it) la(, and in its #ro#er &or#orate name$ It may s!e
and be s!ed, and &ontra&t and be &ontra&ted (it)$ Its #o(ers are t(ofold in
&)ara&ter#!bli&, governmental or #oliti&al on t)e one )and, and &or#orate, #rivate
and #ro#rietary on t)e ot)er$ <overnmental #o(ers are t)ose e2er&ised in
administering t)e #o(ers of t)e state and #romoting t)e #!bli& (elfare and t)ey
in&l!de t)e legislative, @!di&ial, #!bli& and #oliti&al$ M!ni&i#al #o(ers on t)e one
)and are e2er&ised for t)e s#e&ial benet and advantage of t)e &omm!nity and
in&l!de t)ose ()i&) are ministerial, #rivate and &or#orate$ In &onne&tion (it) t)e
#o(ers of a m!ni&i#al &or#oration, it may a&!ire #ro#erty in its #!bli& or
 governmental &a#a&ity, and #rivate or #ro#rietary &a#a&ity$ /)e Ne( Civil Code
divides s!&) #ro#erties into #ro#erty for #!bli& !se and #atrimonial #ro#erties
BArti&le -?, and f!rt)er en!merates t)e #ro#erties for #!bli& !se as #rovin&ial
roads, &ity streets, m!ni&i#al streets, t)e s!ares, fo!ntains, #!bli& (aters,
#romenades, and #!bli& (or6s for #!bli& servi&e #aid for by said #rovisions, &ities or
m!ni&i#alities, all ot)er #ro#erty is #atrimonial (it)o!t #re@!di&e to t)e #rovisions of 
s#e&ial la(s$ /)!s in /orio v$ %ontanilla, t)e Co!rt de&lared t)at (it) res#e&t to
#ro#rietary f!n&tions t)e settled r!le is t)at a m!ni&i#al &or#oration &an be )eld
liable to t)ird #ersons e2 &ontra&t!$
nder t)e foregoing &onsiderations and in t)e absen&e of a s#e&ial la(, t)e
Nort) Cemetery is a #atrimonial #ro#erty of t)e City of Manila$ /)e administration
and government of t)e &emetery are !nder t)e City 4ealt) 3&er, t)e order and
#oli&e of t)e &emetery, t)e o#ening of graves, ni&)es, or tombs, t)e e2)!ming of
remains, and t)e #!ri&ation of t)e same are !nder t)e &)arge and res#onsibility of
t)e s!#erintendent of t)e &emetery$ >it) t)e a&ts of dominion, t)ere is no do!bt
t)at t)e Nort) Cemetery is (it)in t)e &lass of #ro#erty ()i&) t)e City of Manila
o(ns in its #ro#rietary or #rivate &)ara&ter$ %!rt)ermore, t)ere is no dis#!te t)at
t)e b!rial lot (as leased in favor of t)e #rivate res#ondents$ 4en&e, obligations
arising from &ontra&ts )ave t)e for&e of la( bet(een t)e &ontra&ting #arties$ /)!s a
lease &ontra&t e2e&!ted by t)e lessor and lessee remains as t)e la( bet(een t)em$
 /)erefore, a brea&) of &ontra&t!al #rovision entitles t)e ot)er #arty to damages
even if no #enalty for s!&) brea&) is #res&ribed in t)e &ontra&t$

Iss!e: >3N t)e &ity is liable for damages

4eld: Fes

"atio: All t)ings &onsidered, even as t)e Co!rt &ommiserates (it) #lainti=s for t)e
!nfort!nate )a##ening &om#lained of and !ntimely dese&ration of t)e resting #la&e
and remains of t)eir de&eased dearly beloved, it nds t)e reliefs #rayed for by t)em
la&6ing in legal and fa&t!al basis$ nder t)e aforementioned fa&ts and
&ir&!mstan&es, t)e most t)at #lainti=s ran as6 for is t)e re#la&ement of s!b@e&t lot
(it) anot)er lot of e!al sie and similar lo&ation in t)e Nort) Cemetery ()i&)
s!bstit!te lot #lainti=s &an ma6e !se of (it)o!t #aying any rental to t)e &ity
government for a #eriod of fortyt)ree B? years, fo!r B mont)s and eleven B11
days &orres#onding to t)e !ne2#ired #ortion of t)e term of t)e lease s!ed !#on as
of *an!ary -5, 198 ()en t)e remains of t)e late 'iven&io to$ Domingo, r$ (ere
#remat!rely removed from t)e dis#!ted lot and to re!ire t)e defendants to loo6 in
earnest for t)e bones and s6!ll of t)e late 'iven&io to$ Domingo r$ and to b!ry t)e
same in t)e s!bstit!te lot ad@!dged in favor of #lainti=s )ere!nder$
As regards t)e iss!e of t)e validity of t)e &ontra&t of lease of grave lot No$
159, 0lo&6 No$ 195 of t)e Nort) Cemetery for 5. years beginning from *!ne +, 191
to *!ne +, -.-1 as &learly stated in t)e re&ei#t d!ly signed by t)e de#!ty treas!rer
of t)e City of Manila and sealed by t)e &ity government, t)ere is not)ing in t)e
re&ord t)at @!sties t)e reversal of t)e &on&l!sion of bot) t)e trial &o!rt and t)e
Intermediate A##ellate Co!rt to t)e e=e&t t)at t)e re&ei#t is in itself a &ontra&t of
lease$ B
nder t)e do&trine of res#ondent s!#erior, B/orio v$ %ontanilla, #etitioner City
of Manila is liable for t)e tortio!s a&t &ommitted by its agents ()o failed to verify
and &)e&6 t)e d!ration of t)e &ontra&t of lease$ /)e &ontention of t)e #etitioner&ity
t)at t)e lease is &overed by Administrative 3rder No$ 5, series of 195 dated Mar&)
+, 195 of t)e City of Manila for ve B5 years only beginning from *!ne +, 191 is
not meritorio!s for t)e said administrative order &overs ne( leases$ >)en s!b@e&t
lot (as &ertied on *an!ary -5, 198 as ready for e2)!mation, t)e lease &ontra&t for
fty B5. years (as still in f!ll for&e and e=e&t$
Gotesco v Chatto (Torts)

FACTS:
In the afternoon of June 4, 1982 plaintiff Gloria E. Chatto, and her 15-year old daughter,
plaintiff Lina Delza E. Chatto went to see the movie 'Mother Dear' at Superama I
theater, owned by defendant Gotesco Investment Corporation. They bought balcony
tickets but even then were unable to find seats considering the number of people
patronizing the movie. Hardly ten (10) minutes after entering the theater, the ceiling of
its balcony collapsed. The theater was plunged into darkness and pandemonium ensued.
Shocked and hurt, plaintiffs managed to crawl under the fallen ceiling. As soon as they
were able to get out to the street they walked to the nearby FEU Hospital where they
were confined and treated for one (1) day.

The next day, they transferred to the UST hospital. Plaintiff Gloria Chatto was treated in
said hospital from June 5 to June 19 and plaintiff Lina Delza Chatto from June 5 to 11.
Due to continuing pain in the neck, headache and dizziness, plaintiff went to Illinois,
USA in July 1982 for further treatment (Exh. "E") She was treated at the Cook County
Hospital in Chicago, Illinois. She stayed in the U.S. for about three (3) months during
which time she had to return to the Cook County Hospital five (5) or six (6) times.

DECISION OF LOWER COURTS:

(1) Trial Court: ordered the defendant, herein petitioner, to pay the plaintiff Lina Delza
E. Chatto

ISSUE:
Whether Gotesco is liable

RULING:
Yes

Petitioner's claim that the collapse of the ceiling of the theater's balcony was due to force
majeure is not even founded on facts because its own witness, Mr. Jesus Lim Ong,
admitted that "he could not give any reason why the ceiling collapsed."

Clearly, there was no authoritative investigation conducted by impartial civil and

structural engineers on the cause of the collapse of the theater's ceiling. Jesus Lim Ong
is not an engineer, he is a graduate of architecture from the St. Louie (sic) University in
Baguio City. It does not appear he has passed the government examination for
architects. (TSN, June 14, 1985, p. 4) In fine, the ignorance of Mr. Ong about the cause
of the collapse of the ceiling of their theater cannot be equated as an act of God. To
sustain that proposition is to introduce sacrilege in our jurisprudence."

Having interposed it as a defense, it had the burden to prove that the collapse was
indeed caused by force majeure. It could not have collapsed without a cause. That Mr.
Ong could not offer any explanation does not imply force majeure.
Verily, the post-incident investigation cannot be considered as material to the present
proceedings. ​What is significant is the finding of the trial court, affirmed by
the respondent Court, that the collapse was due to construction defects.
There was no evidence offered to overturn this finding. The building was constructed
barely four (4) years prior to the accident in question. It was not shown that any of the
causes denominated as force majeure obtained immediately before or at the time of the
collapse of the ceiling. Such defects could have been easily discovered if only petitioner
exercised due diligence and care in keeping and maintaining the premises. But as
disclosed by the testimony of Mr. Ong, there was no adequate inspection of the premises
before the date of the accident. His answers to the leading questions on inspection
disclosed neither the exact dates of said inspection nor the nature and extent of the
same. That the structural designs and plans of the building were duly approved by the
City Engineer and the building permits and certificate of occupancy were issued do not
at all prove that there were no defects in the construction, especially as regards the
ceiling, considering that no testimony was offered to prove that it was ever inspected at
all. It is settled that: "The owner or proprietor of a place of public amusement impliedly
warrants that the premises, appliances and amusement devices are safe for the purpose
for which they are designed, the doctrine being subject to no other exception or
qualification than that he does not contract against unknown defects not discoverable by
ordinary or reasonable means." This implied warranty has given rise to the rule that:
"Where a patron of a theater or other place of public amusement is injured, and the
thing that caused the injury is wholly and exclusively under the control and
management of the defendant, and the accident is such as in the ordinary course of
events would not have happened if proper care had been exercised, its occurrence raises
a presumption or permits of an inference of negligence on the part of the defendant."
That presumption or inference was not overcome by the petitioner.

As gleaned from Bouvier's definition of and Cockburn's elucidation on force majeure, for
one to be exempt from any liability because of it, he must have exercised care, i.e., he
should not have been guilty of negligence.
 

ARMOVIT v. CA, G.R. No. 88561, 1990

Facts:

- 1981. pepetiti
titioners
oners ( a FFilip
ilipino
ino physicia
physiciann residing
residing in
in US) deci
decided
ded to spend
spend thei
theirr Chri
Christma
stmas s holidays
holidays in the
Philippines,
- so they pr
prchas
chased
ed !rom pri"at
pri"atee responden
respondent, t, (#orth$est
(#orth$est %i%irlin
rlines,
es, &nc.)
&nc.) ' rond tri trip
p airli
airline
ne tic
ticets
ets !r
!rom
om
the U.S. to anila and *ac, pls ' ticetsticets !or the rest o! the children, thogh not in"ol"ed in the sit.
- +n the
their
ir retr
retrnn trip !rom
!rom anila
anila to the U.S.
U.S. schedl
schedleded on anary
anary 1 1,
, 198
198,, /ight
/ight 00, pet petition
itioner
er
arri"ed at the chec-in conter o! pri"ate responden
respondentt at the anila &nternational %irport at 9:1 in the
morning, $hich is a good one (1) hor and 2!teen (1) mintes ahead o! the 10:'0 %.. schedled
/ight time recited in their ticets.
- Pe
Petitio
titioners
ners $ $ere
ere rrdel
delyy in!ormed
in!ormed tha
thatt they cannot
cannot *e accomm
accommodatodated
ed inas
inasmch
mch a as
s Flig
Flight
ht 00
schedled at 9:1 a.m. $as already taing o3 and the 10:'0 %.. /ight time entered in their plane
ticets $as erroneos.
- Pr
Pre"io
e"ios
s to the sai
saidd date o! depart
departre
re petitio
petitioners
ners rre-co
e-con2r
n2rmed
med thei
theirr res
reser"a
er"ations
tions ththrog
rogh h their
representati"e -4he departre time in the three (') ticets o! petitioners $as not changed $hen re-
con2rmed.
- 5er
5erein
ein petition
petitioner
er 6r.
6r. %rmo"it
%rmo"it protest
protested
ed in e7t
e7trem
remee agita
agitation
tion that * *eca
ecase se o! the *m
*mp-o3 p-o3 he $ill
$ill not
*e a*le to eep his appointments $ith his patients in tthe he U.S. Petitioners s3ered angish, $onded
!eelings, and serios an7iety day and night o! anary 1th ntil the morning o! anary 18th $hen
they $ere 2nally in!ormed that seats $ill *e a"aila*le !or them on the /ight that day.
- eca
ecasese o! the
the re!
re!sal
sal oo!! the pri"at
pri"ate
e respond
respondentent to he
heed
ed the rrepea
epeated
ted dem
demands
ands o o!! the pet
petition
itioners
ers !o
!orr
compensatory damages arising !rom the a!oresaid *reach o! their air-transport contracts,  petitioners
$ere compelled to 2le an action !or damages in the egional 4rial Cort o! anila.
- 4C - or
order
dereded de!e
de!endan
ndantt to pay plainti3
plainti3s
s acta
actal,
l, mora
moral,
l, e7empla
e7emplary
ry and nom
nominal
inal da
damage
mages,
s, pls
attorney;s !ees,
- C% < modi2ed the decisions o! the 4C deleting the a$ard o! moral damages considering petitioner did
not tae the $itness stand to testi!y on their =social hmiliation, $onded !eelings and an7iety= and
the *reach o! contract $as not malicios or !radlent.
- oth petiti
petitioners
oners and
and pri"at
pri"ate
e respondent
respondent e ele"ated
le"ated the matter to this Cort !or rre"ie$
e"ie$ *y certiorari .
- petit
petitioner
ioner claim
claim that
that the >
>est
estioned
ioned ddecis
ecision
ion and CC%
% shold
shold *e str
strc
c do$n
do$n as an n nla$!
la$!l,
l, n?
n?st
st an
and
d
reasonless departre !rom the decisions o! this Cort as !ar as the a$ard !or moral damages and the
drastic redction o! the e7emplary damages are concerned.

&SSU@: A+# petitioner is entitled to moral damages.

UB&#:

- 4he time
the gros
grossso!negligence
negligen
the /ight,ce the
committed *ycorrect
!ailre to pri"atesch
respondent
responde nt in the
erroneos issance
entries o! the
and the tic
ticets
manner ets
*y$ith
$hichentr
entries
ies as to
petitioners $ere rdely in!ormed that they $ere *mped o3 are clear indicia o! sch malice and *ad
!aith and esta*lish that pri"ate respondent committed a *reach o! contract $hich entitles petitioners
to moral damages.
- 4he BC o"e
o"erlooed
rlooed thatthat the !ailre o! the peti
petitioner
tioner to aappear
ppear in cort to testi!y $a $ass e7plai
e7plained
ned *y
them.
o  4he assassination
assassination o! Sena
Senator
tor enigno % %>ino,
>ino, r
r.. !ollo$ing th
the
e year they $ere *mped o3
cased a trmoil in the contry.
o  4his trmoil spilled o"er o"er to the year
year 198 $hen they they $ere schedled to ttesti!y
esti!y.
o  4he "iol "iolent
ent demonstrations
demonstrations in the contry $ere sensational
sensationaliDed
iDed iin
n the U.S. me
media
dia s
so
o
petitioners $ere ad"ised to re!rain !rom retrning to the Philippines at the time.
- #e"e
#e"erthe
rtheless
less,, %tty
%tty.. ay
aymnd
mnd %rmo"it,
%rmo"it, *rother
*rother o! petition
petitioner
er 6r.
6r. %rmo"it,
%rmo"it, too the $i $itness
tness st
stand
and as he
$as $ith the petitioners !rom the time they checed in p to the time o! their ltimate departre.
- #o do*t % %tty
tty.. ay
aymnd
mnd %rmo"i
%rmo"it;s
t;s testimon
testimony y ade>ately
ade>ately an andd sEci
sEciently
ently eesta*
sta*lish
lished
ed the ser
serios
ios
an7iety, $onded !eelings and social hmiliation that petitioners s3ered pon ha"ing *een *mped
o3.
- 5o$e"
5o$e"er,
er, consider
considering
ing the ci
circ
rcmsta
mstances
nces o! th
this
is case $her
$here*y
e*y the pr
pri"at
i"ate
e resp
responden
ondentt attended
attended to the
plight o! the petitioners, taing care o! their accommodations $hile $aiting and *oarding them in the
 

/ight *ac to the U.S. the

t he !ollo$ing day, the Cort 2nds that the petitioners areare entitled to moral
damages in the amont o! P100,000.00 each.
- y the sa
same
me to
toen
en to pr
pro"ide
o"ide an e7
e7ampl
amplee !or the p*lic
p*lic good,
good, an aa$ar
$ard
d o! e7empl
e7emplary
ary da
damage
magess is als
also
o
proper. 4he a$ard o! the appellate cort is ade>ate.
- #e"e
#e"erthe
rtheless
less,, the dele
deletion
tion o! the
the nomina
nominall damag
damageses *y the ap
appell
pellate
ate co
cort
rt is $ell-ta
$ell-taen
en since th
there
ere is
an a$ard o! actal damages. #ominal damages cannot co-e7ist co -e7ist $ith actal or compensatory
damages. 1

&n
&n Air
 Air France
France vs
vs.. Car
 Carras
rascos
cosoo, 9 Lope
Lo pez
z vs
vs.. Pan American
Amer ican World
Wo rld Airways
Ai rways,, 10 and
and Zulueta
 Zulueta vs.
vs. Pan American
World Airways,
Airways, 11 this
11 this Cort a$arded
a$arded damages !or the gross negligence o! the airline $hich amonted to
malice and *ad !aith and $hich tainted the *reach o! air transportation contract.

 4hs in Air
in Air France
France,, this Cort o*ser"ed:

% contract to transport passengers is >ite di3erent in ind and degree !rom any other contractal
relation. %nd this, *ecase o! the relation $hich an air carrier sstains $ith the p*lic. &ts *siness
is mainly $ith the tra"eling p*lic. &t in"ites people to a"ail o! the com!orts and ad"antages it
o3ers. The contract
contrac t of air carriage, therefore,
the refore, generates
generate s a relation attended
atten ded with a pulic du
duty
ty..
#eglect or mal!easance o! the carrier;s employees, natrally, cold gi"e grond !or an action !or
damages.

Passengers
Passengers do not contract merely !or transportation. 4hey ha"e the right to *e treated *y the
carrier;s employees $ith indness, respect,
carrier;s respect, cortesy and de considerat
consideration.
ion. 4hey are entitled to *e
protected against personal miscondct, in?rios langage, indignities and a*ses !rom sch
employees. So it is, that any rude or discourteous conduct on the part of employees towards a
 passenger gives the latter
latter an action
action for damag es against the carrier .1
damages
 

Ilocos Norte Electric Company v CA iron gate and fence of steel matting, thus, charging the latter with electric current
GR No 53401 | Nov 6, 1989 whenever the switch is on. This might have caused the electrocution.
  The CFI ruled in favor of INELCO and dismissed the complaint but awarded P25000
When an act of God combines with defendant’s negligence to produce an injury, in moral damages and attorney’s fees of P45000.
defendant is liable if the injury would not have resulted but for his own negligent   The CA set aside the CFI decision and ordered INELCO to pay actual damages of
conduct. P30229.45, compensatory damages of P50000, exemplary damages of P10000,
attorney’s fees of P3000, plus the cost of the suit.
FACTS

  Typhoon “Gening” buffeted the province of Ilocos Norte, bringing heavy rains and
consequent flooding in its wake.
ISSUE
W/N INELCO is liable for damages since typhoons and floods are fortuitous events  – 
 – 
  After the typhoon had abated and when the floodwaters were beginning to recede,

NO
the deceased, Isabel Lao Juan, ventured out, and proceeded to the Five Sisters
RATIO 
RATIO 
Emporium, of which she was the owner and proprietress, to look after the
  While it is true that typhoons and floods are considered Acts of God for which no
merchandise that might have been damaged.
person may be held responsible, it was not said eventuality which directly caused
  Wading in waist-deep flood, Isabel was followed by 2 of her employees. Suddenly,

the victim’s 
victim’s  death. It was through the intervention of petitioner’s negligence
petitioner’s  negligence that
the deceased screamed “Ay” and quick lyly sank into the water. The two girls attempted
death took place.
to help, but failed. There was an electric wire dangling from a post and moving in
  Engr. Juan from the NAPOCOR stated that when he set out that morning for an
snake-like fashion in the water.
inspection, there was no INELCO line man attending to the grounded and
  Upon their shouts for help, Ernesto dela Cruz came out of the house of Antonio

disconnected electric lines. The INELCO Office was likewise closed around the time
 Yabes. Ernesto tried to go to the deceased, but at four meters away from her he
turned back shouting that the water was grounded. of the electrocution.
  At the INELCO, irregularities in the flow of electric current were noted because
  When Antonio Yabes was informed by Ernesto that his mother-in- law had been

 “amperes of the switch volts were moving”. And yet, despite these  danger signals,
electrocuted, they requested the police to ask the people of INELCO to cut off the
INELCO had to wait for Engr. Juan to request that defendant’s switch be cut off—
electric current.
but the harm was done. Asked why the delay, Loreto Abijero , one of INELCO’s
  The body of the deceased was recovered about two meters from an electric post.

linemen answered
answered that he “was
“was not the machine tender of the electric plant to switch
Upon the request of the relatives of the deceased, Dr. Castro examined the body.
off the current.”  
The skin was grayish or, in medical parlance, cyanotic, which indicated death by
  In times of calamities, extraordinary diligence requires a supplier of electricity to be
electrocution. On the left palm, the doctor found an “electrically charged wound”   or
or
in constant vigil to prevent or avoid any probable incident that might imperil life or
a first degree burn. About the base of the thumb on the left hand was a burned
limb. The evidence does not show that defendant did that. On the contrary, evidence
wound. The certificate of death prepared by Dr. Castro stated the cause of death as
discloses that there were no men (linemen or otherwise) policing the area, nor even
 “circulatory shock electrocution”  
manning its office.


  In defense and exculpation, defendant presented the testimonies of its officers and
employees, and sought to prove that on and even before
be fore the day of Isabel Lao Juan’s

  The negligence of petitioner having been shown, it may not now absolve itself from
liability by arguing that the victim’s death was solely
so lely due to a fortuitous event.
death, the electric service system of the INELCO in the whole franchise area, did not
  “When an act of God combines or concurs with the negligence of the defendant to
suffer from any defect that might constitute a hazard to life and property. The service
produce an injury, the defendant is liable if the injury would not have resulted but
lines, devices and other INELCO equipment had been newly-installed prior to the
for his own negligent conduct or omission”  
date in question. As a public service operator and in line with its business of supplying
  A person is excused from the force of the rule,
rule, that when he volu
voluntarily
ntarily assents to a
electric current to the public, defendant had installed safety devices to prevent and
known danger he must abide by the consequences, if an emergency is found to exist
avoid injuries to persons and damage to property in case of natural calamities such
or if the life or property of another is in peril or when he seeks to rescue his
as floods, typhoons, fire and others.
endangered property. Clearly, an emergency was at hand as the deceased’ s deceased’ s
  An action for damages in the aggregate amount of P250000 was instituted by the

property, a source of her livelihood, was faced with an impending loss.
heirs of the deceased with the CFI.
  INELCO, however, theorizes that the deceased could have died simply by either

RULING
drowning or by electrocution due to negligence attributable only to herself. it was CA Decision affirmed with modification, increasing actual damages to P48229.
pointed out that the deceased, without petitioner’s knowledge, caused the
installation of a burglar deterrent by connecting a wire from the main house to the
 ! " # #$ %
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(( ! % * . ( % % % % (
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 % &> & * ! !! ( ! " # #$ ) ! )
&' ( & ( (( % ) %
+ ( % ! * % % 9% ! ( !! ! % * %
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Juan Nakpil and Sons v. CA
144 SCRA 597 (1986)

FACTS:

Private respondents – Philippine Bar Association (PBA) – a non-profit organization formed under the
corporation law, decided to put up a building in Intramuros, Manila. Hired to plan the specifications of
the building were Juan Nakpil & Sons, while United Construction was hired to construct it. The
proposal was approved by the Board of Directors and signed by the President, Ramon Ozaeta. The
building was completed in 1966.

In 1968, there was an unusually strong earthquake which caused the building heavy damage, which
led the building to tilt forward, leading the tenants to vacate the premises. United Construction took
remedial measures to sustain the building.

PBA filed a suit for damages against United Construction, but United Construction subsequently filed
a suit against Nakpil and Sons, alleging defects in the plans and specifications.

Technical Issues in the case were referred to Mr. Hizon, as a court appointed Commissioner. PBA
moved for the demolition of the building, but was opposed. PBA eventually paid for the demolition
after the building suffered more damages in 1970 due to previous earthquakes. The Commissioner
found that there were deviations in the specifications and plans, as well as defects in the
construction of the building.

ISSUE:

Whether or not an act of God (fortuitous event) exempts from liability parties who would
otherwise be due to negligence?

RULING:

The Civil Code dictates that the engineer/architect and contractor are liable for damages should the
building collapse within 15 years from completion. The same law, however, states that no person
shall be responsible for events, which could not be foreseen.

In the case at bar, although the damage was ultimately caused by the earthquake which was an act
of God, the defects in the construction, as well as the deviations in the specifications and plans
aggravated the damage, and lessened the preventive measures that the building would otherwise
have had.

The petitioner made significant deviations from the plans and specifications, thereby failing to
observe requisite workmanship standards in the construction of the building while their architect
drew plans that contain defects and other inadequacies. Both the contractor and the architect cannot
escape liability for damages when the building collapsed due to an earthquake when other buildings
in the area withstood the earthquake. Further, the lower court also found that the spirals in one of the
columns on the ground floor have been cut. One who creates a dangerous condition is still liable
even if an act of God may have intervened. As such, the liability of the contractor and the architect
for the collapse of the building is solidary.

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 all 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 were, and
removed from the rules applicable to the acts of God.
 JOSE PILAPIL vs. COURT OF APPEALS and ALATCO
TRANSPORTATION COMPANY, INC.

(G.R. No. 52159, December 22, 1989)

FACTS: Petitioner Pilapil, on board respondent’s bus was hit above his eye
by a stone hurled by an unidentified bystander. Respondent’s personnel
lost no time in bringing him to a hospital, but eventually petitioner partially
lost his left eye’s vision and sustained a permanent scar.

Thus, Petitioner lodged an action for recovery of damages before the Court
of First Instance of Camarines Sur which the latter granted. On appeal, the
Court of Appeals reversed said decision.

ISSUE: Whether or not common carriers assume risks to passengers such

as the stoning in this case?

HELD: In consideration of the right granted to it by the public to engage in

the business of transporting passengers and goods, a common carrier
does not give its consent to become an insurer of any and all risks to
passengers and goods. It merely undertakes to perform certain duties to
the public as the law imposes, and holds itself liable for any breach thereof.

xxx

While the law requires the highest degree of diligence from common
carriers in the safe transport of their passengers and creates a presumption
of negligence against them, it does not, however, make the carrier an
insurer of the absolute safety of its passengers.

xxx
Article 1763. A common carrier is responsible for injuries suffered by a
passenger on account of the wilful acts or negligence of other passengers
or of strangers, if the common carrier's employees through the exercise of
the diligence of a good father of a family could have prevented or stopped
the act or omission.

Clearly under the above provision, a tort committed by a stranger which

causes injury to a passenger does not accord the latter a cause of action
against the carrier. The negligence for which a common carrier is held
responsible is the negligent omission by the carrier's employees to prevent
the tort from being committed when the same could have been foreseen
and prevented by them. Further, under the same provision, it is to be noted
that when the violation of the contract is due to the willful acts of strangers,
as in the instant case, the degree of care essential to be exercised by the
common carrier for the protection of its passenger is only that of a good
father of a family.
Gatchalian v. Delim

Facts: On July 11, 1973, petitioner Reynalda Gatchalian boarded as paying passenger
a minibus owned by respondents. While the bus was running along the highway, a
“snapping sound” was heard, and after a short while, the bus bumped a cement flower
pot, turned turtle and fell into a ditch. The passengers were confined in the hospital, and
their bills were paid by respondent’s spouse on July 14. Before Mrs. Delim left, she had
the injured passengers sign an already prepared affidavit waiving their claims against
respondents. Petitioner was among those who signed. Notwithstanding the said
document, petitioner filed a claim to recover actual and moral damages for loss of
employment opportunities, mental suffering and inferiority complex caused by the scar
on her forehead. Respondents raised in defense force majeure and the waiver signed
by petitioner. The trial court upheld the validity of the waiver and dismissed the
complaint. The appellate court ruled that the waiver was invalid, but also that the
petitioner is not entitled to damages.

Issues:

(1) Whether there was a valid waiver

(2) Whether the respondent was negligent

(3) Whether the petitioner is entitled to actual and moral damages

Held:

(1) We agree with the majority of the Court of Appeals who held that no valid waiver of
her cause of action had been made by petitioner. A waiver, to be valid and effective,
must in the first place be couched in clear and unequivocal terms which leave no doubt
as to the intention of a person to give up a right or benefit which legally pertains to him.
A waiver may not casually be attributed to a person when the terms thereof do not
explicitly and clearly evidence an intent to abandon a right vested in such person.

The circumstances under which the Joint Affidavit was signed by petitioner Gatchalian
need to be considered. Petitioner testified that she was still reeling from the effects of
the vehicular accident when the purported waiver in the form of the Joint Affidavit was
presented to her for signing; that while reading the same, she experienced dizziness but
that, seeing the other passengers who had also suffered injuries sign the document, she
too signed without bothering to read the Joint Affidavit in its entirety. Considering these
circumstances, there appears substantial doubt whether petitioner understood fully the
import of the Joint Affidavit (prepared by or at the instance of private respondent) she
signed and whether she actually intended thereby to waive any right of action against
private respondent.

Finally, because what is involved here is the liability of a common carrier for injuries
sustained by passengers in respect of whose safety a common carrier must exercise
extraordinary diligence, we must construe any such purported waiver most strictly
against the common carrier. To uphold a supposed waiver of any right to claim
damages by an injured passenger, under circumstances like those exhibited in this
case, would be to dilute and weaken the standard of extraordinary diligence exacted by
the law from common carriers and hence to render that standard unenforceable. We
believe such a purported waiver is offensive to public policy.

(2) In case of death or injuries to passengers, a statutory presumption arises that

the common carrier was at fault or had acted negligently "unless it proves that it
[had] observed extraordinary diligence as prescribed in Articles 1733 and 1755."
To overcome this presumption, the common carrier must show to the court that it
had exercised extraordinary diligence to present the injuries. The standard of
extraordinary diligence imposed upon common carriers is considerably more
demanding than the standard of ordinary diligence. A common carrier is bound to
carry its passengers safely "as far as human care and foresight can provide,
using the utmost diligence of a very cautious person, with due regard to all the
circumstances".

The records before the Court are bereft of any evidence showing that respondent
had exercised the extraordinary diligence required by law. The obvious continued
failure of respondent to look after the roadworthiness and safety of the bus,
coupled with the driver's refusal or neglect to stop the mini-bus after he had
heard once again the "snapping sound" and the cry of alarm from one of the
passengers, constituted wanton disregard of the physical safety of the
passengers, and hence gross negligence on the part of respondent and his
driver.
(3) At the time of the accident, she was no longer employed in a public school. Her
employment as a substitute teacher was occasional and episodic, contingent upon the
availability of vacancies for substitute teachers. She could not be said to have in fact
lost any employment after and by reason of the accident. She may not be awarded
damages on the basis of speculation or conjecture.

Petitioner's claim for the cost of plastic surgery for removal of the scar on her forehead,
is another matter. A person is entitled to the physical integrity of his or her body; if that
integrity is violated or diminished, actual injury is suffered for which actual or
compensatory damages are due and assessable. Petitioner Gatchalian is entitled to be
placed as nearly as possible in the condition that she was before the mishap. A scar,
especially one on the face of the woman, resulting from the infliction of injury upon her,
is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her
conditio ante.

Moral damages may be awarded where gross negligence on the part of the common
carrier is shown. Considering the extent of pain and anxiety which petitioner must have
suffered as a result of her physical injuries including the permanent scar on her
forehead, we believe that the amount of P30,000.00 would be a reasonable award.
Petitioner's claim for P1,000.00 as attorney's fees is in fact even more modest.
 

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G.R. No. L-50076 DATE: September 14, o  T!e* ies#e #!e passe&es
passe&es ", #!ei
1990 $e+"&i&s.
• /uisu$i& as ies#e ", ee+ies a& %as! i&
TITLE: NORBERTO !IS!"BING, SR., #$% G!NT&ER #!e #"#a+ a"u&# ", 1. Fe a+s" su7ee s!"%
LOE''LER (). *A $e%ause a u& !a $ee& p"i&#e a# !i. Gu&#!e
as ies#e ", a is# a#%! %as! a& a++e#.
*ASE: Case is supe s!"# $u# a%#i"&'pa%e.
a%#i"&'pa%e. I# is e%i#'
• p"& +a&i& a# #!e 6IA <a+* a& !is H
ea* i& i#se+,.
%"pa&i"&s es%ape.
•  T!e pe#i#i"&es +e #!is
#!is %ase "& #!e "u&
"u& #!a#
BA*+GRO!ND
#!e +"ss as a esu+# ", PAL?s $ea%! ", %"&#a%#ua+
-a%#s
"$+ia#i"& #" %a* #!e a& #!ei $e+"&i&s i#!
e#a"i&a*
e#a" i&a* i+ie&%e.
• N"$e#" /uisu$i& S. a& Gu&#!e Le"3e ee
• C-I u+e i& PAL?s ,a" u+i& #!a# PAL as &"#
passe&es ", PAL i& a i!# $"u& ," Ce$u #"
&e+ie&# a& #!a# #!e p+ai&#i7?s ,ai+ue #" &"#i,*
•
6a&i+a.
A,#e #!e p+a&e #"" "7 a& N8I ae&# 9:i++ai&; !" PAL ", #!e $aae pe%+ue #!e %aie?s +ia$i+i#*.
• CA aJe
as a$"a #!e p+a&e &"#i%e #!a# a %e#ai& 9<a+*;
!" is a suspe%# i& #!e i++i&
i++i & ", a =ue as a+s"
ISS!ES TO BE RESOLED
"& $"a.
1. WKN PAL is +ia$+e
o  T!is <a+* as sea#e
sea#e &ea #!e %"% %"%pi#
pi# usi&
a& a+ias >Cae&#e?
>Cae&#e?..
• :i++ai& s%i$$+e a &"#e aesse
aesse  #" #!e pi+"# RESOL!TIONS AND ARG!"ENTS
e@ues#i& #!a# #!e +a##e %"&#a%# N8I 6a&i+a #" as NO. 2 paaap!s +a& a& a#i"M
," $a%'up i& appe!e&i& <a+* !e& #!e* ea%!
a&i+a. I. AL eer/)e% etr#or%$#r %23e$/e.
o  T!e %ap#ai& e&# "u# ", #!e %"% %"%pi#
pi# #" #e++
:i++ai& #!a# !e %a&?# se& #!e essae •  T!e a%#s ", #!e ai+i&e
ai+i&e a& i#s %e %a&&"# $e
$e%ause a++ "u& ai%a,# s#a#i"&s "u+ ,au+#e as &e+ie&%e. T!e !ia%es !a a+ea*
!ea i#. s!"& #!ei i++i&&ess #" i++. O&e passe&e as
• <a+* a& !is %"pa&i"&s s#a#e a+i& a"u& i& ,a%# i++e a& a&"#!e suie u&s!"# "u&s.
a%#i& suspi%i"us a& a++.  T!e +ies ", #!e es#
es# ", #!e passe&es
passe&es a& %e
%e
• S""& #!eea,#e a& e%!a&e ", u&s!"#s e&sue ee "e ip"#a&# #!a& #!ei p"pe#ies.
$e#ee& :i++ai& a& <a+* B %". C""pea#i"& i#! #!e !ia%es u&#i+ #!e* e+ease
o <a+* a&&"u&%e #!a# i# as a !"+'up a& #!ei !"s#aes a# #!e u&a* e& &ea #!e S"u#!
"ee #!e pi+"# &"# #" se& SOS. Supe!i!a* as i%#a#e $* #!e %i%us#a&%es
%i%us#a&%es

Cas#e+" Cu Ea"&e Ga&a Gu#iee 6e%a" N" Ta& Te%s"& :a+e
 

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• PALs ,ai+ue #" #ae %e#ai& s#eps #!a# a passe&e
i& !i&si!# $e+iees s!"u+ !ae $ee& #ae& is &"#
#!e &e+ie&%e " is%"&u%# !i%! i&+es i#!
,"%e aeue as a& a%#ie a& %""pea#ie %ause.
II. Te )e o re#rm) #$% rre))tb2e or/e $ te
8#/$3 /o$)ttte) or/e m#8ere;. T!e pa#i%u+a
a%#s si&+e "u# $* #!e pe#i#i"&es as supp"se+*
e"&s#a#ie ", &e+ie&%e ee i& #!e +i!# ", #!e
%i%us#a&%es
%i%us#a&% es ", #!e %ase &"# i& #u#! &e+ie&# a%#s
suJ%ie&# #" "e%"e #!e ,"%e aeue &a#ue ", #!e
ae "$$e*
"$$ e*.
.

Cas#e+" Cu Ea"&e Ga&a Gu#iee 6e%a" N" Ta& Te%s"& :a+e
 G.R. No. 70547 January 22, 1993

PHILIPPINE NATIONAL RAILWAYS and HONORIO CABARDO, petitioners,

vs.
INTERMEDIATE APPELLATE COURT, and BALIWAG TRANSIT, INC., respondents.

[FACTS]

1. That plaintiff was passing thru the town of Calumpit Bulacan, temporarily while the bridge
at Hagonoy, Bulacan was under construction;

2. That defendant Philippine National Railways is a purely government owned and regularly
passes along the intersection of Barrio Balungao, Calumpit, Bulacan, in going to San
Fernando, La Union from Manila and return;

3. That on August 10, 1974, at about 1:20 o'clock in the afternoon, Passenger train No. 73 hit
and bumped the right mid portion of the plaintiff's passenger bus No. 1066, while the rear
portion of said bus was at the railroad track and its direction was towards Hagonoy, Bulacan
at about 1:30 o'clock in the afternoon;

4. That at the time of the collision there was a slight rainfall in the vicinity of the scene of the
accident and that there was at said intersection no bar, semaphores, and signal lights that
would warn the public of the approaching train.

5. That on account of said collision, the Baliuag Transit Bus with Body No. 1066 driven by
Romeo Hughes was damaged and eighteen (18) of its passengers died and the rest who
were more than fifty three (53) passengers suffered physical injuries;

[ISSUES]

1. Who between the driver Romeo Hughes of the Baliuag Transit Incorporated and
Honorio Cabardo, train Engineer of the Philippine National Railways was negligent in
the operation of their respective vehicles, or whether or both were negligent?

2. Could either of the companies Baliuag Transit Incorporated and the Philippine
National Railways be held accountable for the collision because of negligence?

[RULING]

The instant case the State divested itself of its sovereign capacity when it organized
the PNR which is no different from its predecessor, the Manila Railroad Company.
The PNR did not become immune from suit. It did not remove itself from the
operation of Articles 1732 to 1766 of the Civil Code on common carriers.

The correct rule is that "not all government entities, whether corporate or
noncorporate, are immune from suits. Immunity from suit is determined by the
character of the objects for which the entity was organized."

When it is apparent, or when in the exercise of reasonable diligence commensurate

with the surroundings it should be apparent, to the company that a person on its
 G.R. No. 70547 January 22, 1993

PHILIPPINE NATIONAL RAILWAYS and HONORIO CABARDO, petitioners,

vs.
INTERMEDIATE APPELLATE COURT, and BALIWAG TRANSIT, INC., respondents.
track or to get on its track is unaware of his danger or cannot get out of the way, it
becomes the duty of the company to use such precautions, by warnings, applying
brakes, or otherwise, as may be reasonably necessary to avoid injury to him.

What exacerbates against petitioners' contention is the authority in this jurisdiction

to the effect that the failure of a railroad company to install a semaphore or at the
very least, to post a flagman or watchman to warn the public of the passing train
amounts to negligence
Alitalia v. Intermediate Appellate Court
192 SCRA 9

Facts:

Dr. Felipa Pablo, a professor from UP was invited to attend a meeting by the United Nations in
Ispra, Italy. She was to read a paper regarding foreign substances in food and the agriculture
environment which she had specialized knowledge of. She booked a flight to Italy with Alitalia airlines,
petitioner herein. She had arrived in Milan the day before the meeting however her luggage did not arrive
with her. The airline informed her that her luggage was delayed because it was placed in one of the
succeeding flights to Italy. She never got her luggage.
When she got back to Manila she demanded that Alitalia compensate her for the damages that
she suffered. Petitioner herein offered free airline tickets in order to compensate for the alleged
damages, however she rejected this offer and instead filed a case. Subsequently it was found out that
the luggages of Dr. Pablo were not placed in the succeeding flights. She received her luggage 11
months after and after she had already instituted a case against Alitalia.
The lower court rendered a decision in favor of Dr. Pablo and ordered plaintiff to pay damages.
On appeal, the Court of Appeals affirmed the decision and even increased the amount of damages to be
awarded to Dr. Pablo. Hence this petition for certiorari.

Issue:
Whether or not Alitalia is liable for damages incurred by Dr. Pablo.

Held:
The Court held that Alitalia is liable to pay Dr. Pablo for nominal damages. The Warsaw
Convention provides that an air carrier is made liable for damages when: (1) the death, wounding or
other bodily injury of a passenger if the accident causing it took place on board the aircraft or in the
course of its operations of embarking or disembarking; (2) the destruction or loss of, or damage to, any
registered luggage or goods, if the occurrence causing it took place during the carriage by air"; and (3)
delay in the transportation by air of passengers, luggage or goods. However, the claim for damages may
be brought subject to limitations provided in the said convention.
In this case, Dr. Pablo did not suffer any other injury other than not being able to read her paper
in Italy. This was due to the fact that Alitalia misplaced her luggage. There was no bad faith or malice on
the part of Alitalia in the said delay in the arrival of her luggage. Dr. Pablo received all her things which
were returned to her in good condition although 11 months late. Therefore she shall receive nominal
damages for the special injury caused.
G.R. No. 70462 August 11, 1988 PAN AMERICAN WORLD AIRWAYS, INC., petitioner, vs.
INTERMEDIATE APPELLATE COURT, RENE V. PANGAN, SOTANG BASTOS PRODUCTIONS
and ARCHER PRODUCTIONS, respondents.

Facts: On April 25, 1978, plaintiff Rene V. Pangan, president and general manager of the plaintiffs
Sotang Bastos and Archer Production while in San Francisco, Califonia and Primo Quesada of
Prime Films, San Francisco, California, entered into an agreement whereby the former, for and in
consideration of the amount of US $2,500.00 per picture, bound himself to supply the latter with
three films. 'Ang Mabait, Masungit at ang Pangit,' 'Big Happening with Chikiting and Iking,' and
'Kambal Dragon' for exhibition in the United States. It was also their agreement that plaintiffs would
provide the necessary promotional and advertising materials for said films on or before May 30,
1978. On May 18, 1978, plaintiff Pangan obtained from defendant Pan Am's Manila Office, through
the Your Travel Guide, an economy class airplane ticket with No. 0269207406324 for passage from
Manila to Guam on defendant's Flight No. 842 of May 27,1978, upon payment by said plaintiff of the
regular fare. On May 27, 1978, two hours before departure time plaintiff Pangan was at the
defendant's ticket counter at the Manila International Airport and presented his ticket and checked in
his two luggages, for which he was given baggage claim tickets. The two luggages contained the
promotional and advertising materials, the clutch bags, barong tagalog and his personal belongings.
Subsequently, Pangan was informed that his name was not in the manifest and so he could not take
Flight No. 842 in the economy class. Since there was no space in the economy class, plaintiff
Pangan took the first class because he wanted to be on time in Guam to comply with his
commitment, paying an additional sum of $112.00. When plaintiff Pangan arrived in Guam on the
date of May 27, 1978, his two luggages did not arrive with his flight, as a consequence of which his
agreements with Slutchnick and Quesada for the exhibition of the films in Guam and in the United
States were cancelled. Thereafter, he filed a written claim for his missing luggages. Upon arrival in
the Philippines, Pangan contacted his lawyer, who made the necessary representations to protest as
to the treatment which he received from the employees of the defendant and the loss of his two
luggages Defendant Pan Am assured plaintiff Pangan that his grievances would be investigated and
given its immediate consideration. Due to the defendant's failure to communicate with Pangan about
the action taken on his protests, the present complaint was filed by the plaintiff.

CFI held the petitioner liable which was affirmed by the IAC. In assailing the decision of the
Intermediate Appellate Court petitioner assigned the following errors:

1. The respondent court erred as a matter of law in affirming the trial court's award of actual
damages beyond the limitation of liability set forth in the Warsaw Convention and the contract of
carriage.

2. The respondent court erred as a matter of law in affirming the trial court's award of actual
damages consisting of alleged lost profits in the face of this Court's ruling concerning special or
consequential damages as set forth in Mendoza v. Philippine Airlines

Issue: Whether or not petitioner should be held liable for the lost luggage of the defendant

Held: NO. On the basis of the foregoing stipulations printed at the back of the ticket, petitioner
contends that its liability for the lost baggage of private respondent Pangan is limited to $600.00
($20.00 x 30 kilos) as the latter did not declare a higher value for his baggage and pay the
corresponding additional charges. In view thereof petitioner's liability for the lost baggage is limited to
$20.00 per kilo or $600.00, as stipulated at the back of the ticket. At this juncture, in order to rectify
certain misconceptions the Court finds it necessary to state that the Court of Appeal's reliance on a
quotation from Northwest Airlines, Inc. v. Cuenca [G.R. No. L22425, August 31, 1965, 14 SCRA
1063] to sustain the view that "to apply the Warsaw Convention which limits a carrier's liability to
US$9.07 per pound or US$20.00 per kilo in cases of contractual breach of carriage ** is against
public policy" is utterly misplaced, to say the least. Thus, it is quite clear that the Court never
intended to, and in fact never did, rule against the validity of provisions of the Warsaw Convention.
Consequently, by no stretch of the imagination may said quotation fromNorthwest be considered as
supportive of the appellate court's statement that the provisions of the Warsaw Convention limited a
carrier's liability are against public policy. The Court finds itself unable to agree with the decision of
the trial court, and affirmed by the Court of Appeals, awarding private respondents damages as and
for lost profits when their contracts to show the films in Guam and San Francisco, California were
cancelled. In the absence of a showing that petitioner's attention was called to the special
circumstances requiring prompt delivery of private respondent Pangan's luggages, petitioner cannot
be held liable for the cancellation of private respondents' contracts as it could not have foreseen
such an eventuality when it accepted the luggages for transit. he evidence reveals that the proximate
cause of the cancellation of the contracts was private respondent Pangan's failure to deliver the
promotional and advertising materials on the dates agreed upon. For this petitioner cannot be held
liable. Private respondent Pangan had not declared the value of the two luggages he had checked in
and paid additional charges. Neither was petitioner privy to respondents' contracts nor was its
attention called to the condition therein requiring delivery of the promotional and advertising
materials on or before a certain date. With the Court's holding that petitioner's liability is limited to the
amount stated in the ticket, the award of attorney's fees, which is grounded on the alleged unjustified
refusal of petitioner to satisfy private respondent's just and valid claim, loses support and must be
set aside.
SANTOS VS NORTHWEST
MARCH 28, 2013​ ~ ​VBDIAZ

G.R. No. 101538 June 23, 1992

AUGUSTO BENEDICTO SANTOS III, represented by his father and

legal guardian, Augusto Benedicto Santos vs. NORTHWEST
ORIENT AIRLINES and CA

FACTS​: The petitioner is a minor and a resident of the Philippines. Private

respondent Northwest Orient Airlines (NOA) is a foreign corporation with
principal office in Minnesota, U.S.A. and licensed to do business and maintain
a branch office in the Philippines.

On October 21, 1986, the petitioner purchased from NOA a round-trip ticket in
San Francisco. U.S.A., for his flight from San Francisco to Manila via Tokyo
and back. The scheduled departure date from Tokyo was December 20, 1986.
No date was specified for his return to San Francisco.

On December 19, 1986, the petitioner checked in at the NOA counter in the
San Francisco airport for his scheduled departure to Manila. Despite a
previous confirmation and re-confirmation, he was informed that he had no
reservation for his flight from Tokyo to Manila. He therefore had to be
wait-listed.
On March 12, 1987, the petitioner sued NOA for damages in the RTC of
Makati. On April 13, 1987, NOA moved to dismiss the complaint on the
ground of lack of jurisdiction, citing Article 28(1) of the Warsaw Convention,
reading as follows:

Art. 28. (1) An action for damage must be brought at the option of the plaintiff,
in the territory of one of the High Contracting Parties, either before the court
of the domicile of the carrier or of his principal place of business, or where he
has a place of business through which the contract has been made, or before
the court at the place of destination.

The private respondent contended that the Philippines was not its domicile
nor was this its principal place of business. Neither was the petitioner’s ticket
issued in this country nor was his destination Manila but San Francisco in the
United States.

Lower court granted the dismissal, CA affirmed.

ISSUE​: WON the Philippines has jurisdiction over the case. (Issue raised by
the party is WON the provision of the Warsaw convention was constitutional)

HELD​: No jurisdiction (the provision is constitutional)

The Convention is a treaty commitment voluntarily assumed by the Philippine

government and, as such, has the force and effect of law in this country. The
petitioner’s allegations are not convincing enough to overcome this
presumption. Apparently, the Convention considered the four places
designated in Article 28 the most convenient forums for the litigation of any
claim that may arise between the airline and its passenger, as distinguished
from all other places.

NOTES​:

WON Warsaw convention applies.

Convention applies to all international transportation of persons performed by

aircraft for hire. Whether the transportation is “international” is determined
by the contract of the parties, which in the case of passengers is the ticket.
When the contract of carriage provides for the transportation of the passenger
between certain designated terminals “within the territories of two High
Contracting Parties,” the provisions of the Convention automatically apply and
exclusively govern the rights and liabilities of the airline and its passenger.

WON MNL or SFO was the destination.

The place of destination, within the meaning of the Warsaw Convention, is

determined by the terms of the contract of carriage or, specifically in this case,
the ticket between the passenger and the carrier. Examination of the
petitioner’s ticket shows that his ultimate destination is San Francisco.
Although the date of the return flight was left open, the contract of carriage
between the parties indicates that NOA was bound to transport the petitioner
to San Francisco from Manila. Manila should therefore be considered merely
an agreed stopping place and not the destination.

WON Northwest has domicile in the Philippines

Notably, the domicile of the carrier is only one of the places where the
complaint is allowed to be filed under Article 28(1). By specifying the three
other places, to wit, the principal place of business of the carrier, its place of
business where the contract was made, and the place of destination, the article
clearly meant that these three other places were not comprehended in the
term “domicile.”
 La Mallorca De Jesus v. Court of Appeals 
G.R. No. L-20761, 27 July 1966, 17 SCRA 739 
 
FACTS: 
 
Plaintiffs,  husband  and  wife,  together  with  their  three  minor  daughters  (Milagros,  13 
years  old,  Raquel,  about  4  years  old  and  Fe,  2  years  old)  boarded  the  Pambusco  at  San 
Fernando  Pampanga,  bound  for  Anao,  Mexico,  Pampanga.  Such  a  bus  is  owned  and 
operated by the defendant. 
 
They  were  carrying  with  them  four  pieces  of  baggage  containing  their  personal 
belongings.  The  conductor  of  the  bus  issued  three  tickets  covering  the  full  fares  of  the 
plaintiff and their eldest child Milagros. No fare was charged on Raquel and Fe, since both 
were  below  the  height  which  fare  is  charged  in  accordance  with  plaintiff’s  rules  and 
regulations. 
 
After  about  an  hour’s  trip,  the  bus  reached  Anao  where  it  stopped  to  allow  the 
passengers  bound  therefore,  among  whom  were  the  plaintiffs  and  their  children  to  get 
off.  Mariano  Beltran,  carrying  some  of  their  baggage  was  the  first  to  get  down  the  bus, 
followed  by  his  wife  and  children.  Mariano  led his companion to a shaded spot on the left 
pedestrian  side  of  the  road  about  four  or  five  meters  away  from the vehicle. Afterwards, 
he  returned  to  the  bus  in  controversy  to  get  his  pay,  which  he  had  left  behind,  but  in 
doing  so,  his  daughter  followed  him  unnoticed  by  his  father.  While  said  Mariano  Beltran 
was  on  the  running  board  of  the  bus  waiting  for  the  conductor  to  hand  him  his  bayong 
which  he  left  under  one  its  seats  near  the  door,  the  bus,  whose  motor  was  not  shut  off 
while  unloading  suddenly  started  moving  forward,  evidently  to  resume  its  trip, 
notwithstanding  the  fact  that  the  conductor  was  still  attending  to  the  baggage  left 
behind  by  Mariano  Beltran.  Incidentally,  when  the  bus  was  again  placed  in  a  complete 
stop, it had traveled about 10 meters from the point where plaintiffs had gotten off. 
 
Sensing  the  bus  was  again  in  motion;  Mariano  immediately  jumped  from  the  running 
board  without  getting  his  bayong  from  the  conductor.  He  landed  on  the  side  of  the  road 
almost  board  in  front  of  the  shaded  place  where  he  left  his  wife  and  his  children.  At  that 
time,  he  saw  people  beginning  to  gather  around  the body of a child lying prostrate on the 
ground,  her  skull  crushed,  and  without  life.  The  child  was  none  other  than  his  daughter 
Raquel, who was run over by the bus in which she rode earlier together with her parents. 
 
For  the  death  of  the  said  child,  plaintiffs  comment  on  the  suit  against  the  defendant  to 
recover from the latter damages. 
 
ISSUE: 
 
Whether or not the bus company is liable? Yes. 
 
Whether  or  not  the  child  was  no  longer the passenger of the bus involved in the incident, 
and therefore, the contract of carriage was already terminated? 
 
HELD: 
 
There  can  be  no  controversy  that  as  far  as  the  father  is  concerned,  when  he  returned  to 
the  bus  for  his  bayong  which  was  not  unloaded,  the  relation  of  passenger  and  carrier 
between  him  and  the  petitioner  remained  subsisting.  The  relation  of  carrier  and 
passenger  does  not  necessarily  cease  where  the  latter,  after  alighting  from  the  car  aids 
the carrier’s servant or employee in removing his baggage from the car. 
 
It  is  a  rule  that  the  relation  of  carrier  and  passenger  does  not  cease  the  moment  the 
passenger  alights  from  the  carrier’s  vehicle  at  a  place  selected  by  the carrier at the point 
of  destination  but  continues  until  the  passenger  has  had  a  reasonable  time  or  a 
reasonable opportunity to leave the carrier’s premises. 
 
The  father  returned  to  the  bus  to  get  one  of  his  baggages  which  was  not  unloaded  when 
they  alighted  from the bus. Raquel must have followed her father. However, although the 
father  was  still  on  the  running  board  of  the  bus  awaiting  for  the  conductor  to  hand  him 
the  bag  or  bayong,  the  bus  started  to  run,  so  that  even  he  had  jumped  down  from  the 
moving  vehicle.  It  was that this instance that the child, who must be near the bus, was run 
over  and  killed.  In  the  circumstances,  it  cannot  be  claimed  that  the  carrier’s  agent  had 
exercised  the  “utmost  diligence”  of  a  “very  cautious  person”  required  by  Article  1755  of 
the  Civil  Code  to  be  observed  by  a  common  carrier  in  the  discharge  of  its  obligation  to 
transport  safely  its  passengers.  The  driver,  although  stopping  the  bus,  nevertheless  did 
not  put  off  the  engine.  He  started  to  run  the bus even before the conductor gave him the 
signal  to  go  and  while  the  latter  was  still  unloading part of the baggage of the passengers 
Beltran  and  family.  The  presence  of  the  said  passengers  near  the  bus  was  not 
unreasonable  and  they  are,  therefore,  to  be  considered  still  as  passengers  of  the  carrier, 
entitled to the protection under their contract of carriage. 
 TRANSPORTATION | B2015
CASE DIGESTS

driver Leopoldo Cordero, met with an accident, resulting in

Perez v. Gutierrez injuries to herself which required her hospitalization. The
September 28, 1973 vehicle was registered under the name of Josefina Gutierrez.
Castro, J. Fe subsequently filed a case for breach of contract of
Rañeses, Roberto Miguel carriage with the CFI of Davao against Josefina.
(Apologies for having lifted the ratio in toto. The case is short
enough as it is, and the Court ratiocinated quite efficiently.)
Josefina, for her part, averred that, assuming that there
should be any liability, Panfilo Alajar, the actual owner, by
SUMMARY: Fe Perez filed a case for breach of contract of
purchase, of the said passenger jeepney when the accident
carriage against Josefina Perez for the injuries she
occurred and against whom she has filed a third-party
sustained when the jeepney she was riding on, registered
complaint, should be the one who is liable. The deed of sale
under the name of the latter, met an accident. Josefine
attached to the third party complaint clearly states that the
claimed that, if there is any liability, it should be Panfilo
vendee assumes responsibility for any liability that may
Alajar who should answer to such, being the actual owner
airse from the operation of the jeepney.
of the jeepney. The CFI found the driver of the jeepney
liable for reckless imprudence, as well as Panfilo for being
Panfilo Alajar, for his part, alleged that:
the actual owner. Fe appealed to the SC, saying that it
1. Deed of sale is null and void because it has not been
should be Josefina, being the registered owner, who should
registered with the Public Service Commission (PSC)
be liable. The SC agreed with Fe, stating that the failure to
despite demands on Josefina.
obtain the requisite approval from the PSC for the transfer
2. The passenger jeepney remained under the control
of the jeepney to Panfilo meant that such transfer was not
of Josefina, who had been collecting rentals from him
binding to the PSC and the supposed transferor remains
for the use of the vehicle.
responsible under the franchise in relation to the PSC and
3. By express agreement, title remained with Josefina
the public.
pending approval of the sale by the PSC.
DOCTRINE: The law (Sec. 20 [g], Public Service Act) really
The court a quo found (a) Cordero guilty of reckless
requires the approval of the Public Service Commission in
imprudence and that (b) Panfilo owned and operated the
order that a franchise, or any privileges pertaining thereto,
vehicle. Fe appealed the decision, arguing that the
may be sold or leased without infringing the certificate
registered owner of a motor vehicle should be the one held
issued to the grantee. x x x If the property covered by the
liable for damages resulting from breach of contract of
franchise is transferred or leased to another without
carriage by a common carrier. In this case, that would be Fe
obtaining the requisite approval, the transfer is not binding
and not Panfilo.
on the Public Service Commission and, in contemplation of
law, the grantee continues to be responsible under the
ISSUES: WON Josefina Gutierrez should be the one liable for
franchise in relation to the Commission and to the public
damages instead of Panfilo Alajar.
for the consequences incident to the operation of the
vehicle.
RULING: YES. Josefina Gutierrez should be the one liable
for damages.
FACTS: Fe Perez, with nine co-teachers, was a passenger of
an AC jeepney when it, due to the reckless negligence of its RATIO: The court cited Peralta v. Mangusang. It said:

The law (Sec. 20 [g], Public Service Act) really requires the
approval of the Public Service Commission in order that a
franchise, or any privileges pertaining thereto, may be sold
or leased without infringing the certificate issued to the
grantee. The reason is obvious. Since a franchise is
personal in nature any transfer or lease thereof should be
submitted for approval of the Public Service Commission,
so that the latter may take proper safeguards to protect
the interest of the public. It follows that if the property
covered by the franchise is transferred or leased to
another without obtaining the requisite approval, the
transfer is not binding on the Public Service Commission
and, in contemplation of law, the grantee continues to be
responsible under the franchise in relation to the
Commission and to the public for the consequences
incident to the operation of the vehicle, one of them being
the collision under consideration.
The Court also cited Erezo v. Jepte, where it explained that
the doctrine making the registered owner of a common
carrier answerable to the public for negligence injuries to its
passengers or third persons, even though the vehicle had
already been transferred to another, is based upon the
principle —
... that in dealing with vehicles registered under the Public
Service Law, the public has the right to assume or presume
that the registered owner is the actual owner thereof, for it
would be difficult for the public to enforce the actions that
they may have for injuries caused to them by the vehicles
being negligently operated if the public should be required
to prove who the actual owner is. How would the public or
third persons know against whom to enforce their rights in
case of subsequent transfers of the vehicles? We do not
imply by this doctrine, however, that the registered owner
may not recover whatever amount he had paid by virtue of
his liability to third persons from the person to whom he
had actually sold, assigned or conveyed the vehicle.
The case of Tamayo v. Aquino reiterated the doctrine in
Jepte:
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CASE DIGESTS
The question that is posed, therefore, is how should the
holder of the certificate of public convenience Tamayo
participate with his transferee operator Rayos, in the
damages recoverable by the heirs of the deceased
passenger, if their liability is not that of joint tortfeasors in
accordance with Article 2194 of the Civil Code. The
following considerations must be borne in mind in
determining this question. As Tamayo is the registered
owner of the truck, his responsibility to the public or to any
passenger riding in the vehicle or truck must be direct, for
the reasons given in our decision in the case of Erezo vs.
Jepte, supra, as quoted above. But as the transferee, who
operated the vehicle when the passenger died, is the one
directly responsible for the accident and death, he should
in turn be made responsible to the registered owner for
what the latter may have been adjudged to pay. In
operating the truck without transfer thereof having been
approved by the Public Service Commission, the transferee
acted merely as agent of the registered owner and should
be responsible to him (the registered owner), for any
damages that he may cause the latter by his negligence."
In view of the doctrine laid down in the cited cases, the
Court held Josefina Gutierrez solidarily liable with the driver,
Leopoldo Cordero, on the basis of Art. 2184 and Art. 2180 of
the NCC.
DISPOSITIVE: ACCORDINGLY, the judgment below is
hereby modified in the sense that Josefina Gutierrez and
Leopoldo Cordero are hereby adjudged directly and jointly
and solidarily liable to Fe Perez for the sums adjudicated in
the judgment below in her (Fe Perez') favor, while Panfilo
Alajar is, in turn, hereby held answerable to Josefina
Gutierrez for such amount as the latter may pay to Fe Perez
in satisfaction of the judgment appealed from. Costs against
both the defendant-third party plaintiff-appellee Josefina
Gutierrez and the third party defendant-appellee Panfilo
Alajar.
JEREOS VS CA
GR NO. 48747
SEPTEMBER 30, 1982

FACTS: Private respondent, Padorla, is the holder of a certificate of Public Convenience

for the operation of a jeepney line in Iloilo City. On 1971, one of his jeepneys
driven by Jaravilla, hit Judge Rodriguez and his wife resulting to the death of Judge
Rodriguez and causing injuries to the wife. Jaravilla was convicted of the crime of
Homicide and Physical injuries through Reckless Imprudence and sentenced
accordingly. Soledad, the wife, and her children filed with the CFI of Iloilo an action
for damages against Jaravilla (driver), Padorla (holder) and Jereos, the actual owner
of the jeepney.

Jereos denied ownership of the jeepney and claimed that the plaintiffs have no cause of
action against him. Padorla also claimed that he was only the franchise owner and has
nothing to do with the actual control, operation and supervision of the jeepney which is
under Jereos’ control.

The CFI rendered judgment ordering Jaravilla and Padorla to pay jointly and severally
to the plaintiffs. Both appealed to the CA contending that Jereos should also be
jointly and severally liable with the damages incurred by them. The CA held that
Jereos should be jointly and severally liable for the damages. Jereos appealed from the
decision.

ISSUE: Whether Jereos is solidarily (jointly and severally) liable with Javarilla and
Padorla

HELD: Yes. In a civil action due to a quasi-delict (culpa aquiliana), the registered
owner, the actual owner, and the driver of the jeep involved are solidarily liable.
The registered owner or the operator has the right to be indemnified by the real
or actual owner of the amount that he may be required to pay as damage for the
injury caused.
VARGAS vs LANGCAY

FACTS: At about 8:00 o'clock in the morning of June 5, 1955, at Rizal Avenue, Manila,
Corazon and Helen Langcay, sisters, were hit and injured by a jeepney driven by
Ramon B. Aguas. Criminally charged with physical injuries, the said Ramon B. Aguas
was finally sentenced by the Court of Appeals, in CA-G.R. No. L-7900-R, to 3 months
and 6 days of ​arresto mayor for serious and slight physical injuries through reckless
imprudence, caused to Corazon and Helen Langcay, "without pronouncement with
respect to the indemnity due to the aggrieved parties, because the action therefor had
been reserved."

Since the records of the Public Service Commission and the Motor Vehicles Office
showed that Diwata Vargas was, at the time of the accident, the owner and operator of
the jeepney in question, the parents of Corazon and Helen sued Diwata Vargas and the
driver for damages. In spite of the defense of appellant Diwata Vargas that prior to the
accident, precisely on August 17, 1953, she had sold the vehicle to Jose B. Aguas
(father of the driver), so that at the time of the accident she was no longer the owner of
the jeepney, and that, further, the Public Service Commission, on October 27, 1953,
cancelled the certificate of public convenience issued in her name, the defendants
Diwata Vargas and Ramon B. Aguas were jointly and severally sentenced to pay
damages andattorney's fees by the Court of First Instance of Manila. Diwata Vargas
appealed to the Court of Appeals which affirmed, with modifications, the lower court's
decision, making diwata vargas only subsidiarily liable.

ISSUE: WON the CA erred in ruling that Diwata is only subsidiarily liable.

RULING: Yes, the Court of Appeals erred in considering appellant-petitioner Diwata

Vargas only subsidiarily liable under Article 103 of the Revised Penal Code. This Court,
in previous decisions, has always considered the registered owner/operator of a
passenger vehicle, jointly and severally liable with the driver, for damages incurred by
passengers or third persons as a consequence of injuries (or death) sustained in the
operation of said vehicles.

It is even not necessary to prove who the actual owner of the vehicle and the employer
of the driver is. Granting that, in this case, the father of the driver is the actual owner
and that he is the actual employer, following the well settled principle that the operator
of record continues to be the operator of the vehicle in contemplation of law, as regards
the public and third persons, and as such is responsible for the consequences incident
to its operation, we must hold and consider such owner/operator of record as the
employer, in contemplation of law, of the driver.

For the foregoing considerations, we hold that Article 103 is not the law applicable in
this case; the petitioner stands liable, however, on the basis of the settled principle that
as the registered owner, she is directly and primarily responsible and liable for damages
sustained by passengers or third persons as a consequence of the negligent or careless
operation of the vehicle registered in her name.
Gelisan v. Alday
FACTS: Defendant Bienvenido Gelisan is the owner of a freight truck. Defendant Bienvenido
Gelisan and Roberto Espiritu entered into a contract under which Espiritu hired the same freight
truck of Gelisan for the purpose of hauling rice, sugar, flour and fertilizer at an agreed price of
P18.00 per trip within the limits of the City of Manila provided the loads shall not exceed 200 sacks.
It is also agreed that Espiritu shall hear and pay all losses and damages attending the carriage of the
goods to be hauled by him. The truck was taken by a driver of Roberto Espiritu.

Plaintiff Benito Alday, a trucking operator, and who owns about 15 freight trucks, had known the
defendant Roberto Espiritu since 1948 as a truck operator. Plaintiff had a contract to haul the
fertilizers of the Atlas Fertilizer Corporation from Pier 4, North Harbor, to its Warehouse in
Mandaluyong. Alday met Espiritu at the gate of Pier 4 and the latter offered the use of his truck with
the driver and helper at 9 centavos per bag of fertilizer. The offer was accepted by plaintiff Alday.
The fertilizer was delivered to the driver and helper of Espiritu with the necessary way bill receipts,
Exhibits A and B. Espiritu, however, did not deliver the fertilizer to the Atlas Fertilizer bodega at
Mandaluyong. The signatures appearing in the way bill receipts. Espiritu, however, did not deliver
the fertilizer to the Atlas Fertilizer bodega at Mandaluyong. The signatures appearing in the way bill
receipts of the Alday Transportation admittedly not the signature of any representative or employee
of the Atlas Fertilizer Corporation. Roberto Espiritu could not be found, and plaintiff reported the loss
to the Manila Police Department.

Subsequently, plaintiff Alday saw the truck in question on Sto. Cristo St. and he notified the Manila
Police Department, and it was impounded by the police, it was claimed by Bienvenido Gelisan from
the Police Department after he had been notified by his employees that the truck had been
impounded by the police; but as he could not produce at the time the registration papers, the police
would not release the truck to Gelisan. As a result of the impounding of the truck according to
Gelisan, . . . and that for the release of the truck he paid the premium of P300 to the surety
company. Benito Alday was compelled to pay the value of the 400 bags of fertilizer.

Petitioner’s Contention: ​Bienvenido Gelisan, upon the other hand, disowned responsibility. He
claimed that he had no contractual relations with the plaintiff Benito Alday as regards the hauling
and/or delivery of the 400 bags of fertilizer mentioned in the complaint; that the alleged
misappropriation or non-delivery by defendant Roberto Espiritu of plaintiff’s 400 bags of fertilizer,
was entirely beyond his (Gelisan’s) control and knowledge, and which fact became known to him, for
the first time when his freight truck was impounded by the Manila Police Department, at the instance
of the plaintiff; and that in his written contract of hire with Roberto Espiritu, it was expressly provided
that the latter will bear and pay all losses and damages attending the carriage of goods to be hauled
by said Roberto Espiritu.

ISSUE: ​Whether or not the Court of Appeals erred in ordering Bienvenido Gelisan to pay jointly and
severally with Roberto Espiritu, the respondent, Benito Alday.

HELD: ​The Court has invariably held in several decisions that the registered owner of a public
service vehicle is responsible for damages that may arise from consequences incident to its
operation or that may be caused to any of the passengers therein. The claim of the petitioner that he
is not liable in view of the lease contract executed by and between him and Roberto Espiritu which
exempts him from liability to third persons, cannot be sustained because it appears that the lease
contract, adverted to, had not been approved by the Public Service Commission. It is settled in our
jurisprudence that if the property covered by a franchise is transferred or leased to another without
obtaining the requisite approval, the transfer is not binding upon the public and third persons.
BA Finance Corp vs. CA G.R. No. 98275 November 13, 1992

Facts:

Amare, the driver of an Isuzu truck was involved in an accident which caused the death of three
persons. Amare was found guilty beyond reasonable doubt of reckless imprudence. BA Finance
was found liable for damages since the truck was registered in its name. BA Finance contends
that it should not be held liable since it was not Amare’s employer at the time of the accident. It
also contends that the Isuzu truck was in the possession of Rock Component Phil, by virtue of a
lease agreement. Hence, BA Finance wants to prove who the actual/real owner is at the time of
the accident, and in accordance with such proof, evade liability and lay the same on the person
actually owning the vehicle.

Issues:

1 WON BA Finance should be held liable.

2 WON BA Finance can escape liability by proving the actual/real owner of the truck.

Held:

1 Yes, BA Finance is liable.

The registered owner of a certificate of public convenience is liable to the public for the injuries
or damages suffered by passengers or third persons caused by the operation of said vehicle, even
though the same had been transferred to a third person. Under the same principle the registered
owner of any vehicle, even if not used for a public service, should primarily be responsible to the
public or to the third persons for injuries caused the latter while the vehicle is being driven on the
highways or streets.

2 No, the law does not allow him. The law, with its aim and policy in mind, ​does not relieve him
directly of the responsibility that the law fixes and places upon him as an incident or
consequence of registration. This may appear harsh but nevertheless, a registered owner who has
already sold or transferred a vehicle has the recourse to a third-party complaint, in the same
action brought against him to recover for the damage or injury done, against the vendee or
transferee of the vehicle.

While the registered owner is primarily responsible for the damage caused, he has a right to be
indemnified by the real or actual owner of the amount that he may be required to pay as damage
for the injury caused.
 Gutierrez v. Gutierrez, GR No. 34840

FACTS 
● On  February  2,  1930,  a  collision  happened  between  a  passenger  truck 
and  a  private  automobile  while  attempting  to  pass  each  other  on  the 
Talon  bridge  on  the  Manila  South  Road  in  the  Municipality  of  Las 
Pinas, Province of Rizal 
○ Chaffeur  Abelardo  Velasco  drove  the  truck.  Saturnino 
Cortez owned the truck. 
○ Bonifacio  Gutierrez,  18  years  old,  drove  the  automobile. 
His  parents,  Mr.  and  Mrs.  Gutierrez,  owned  it.  Only  the 
mother and several other members of the Gutierrez family, 
except  the  father,  was  in  the  automobile  at  the  time  of  the 
incident. 
● As  a  result  of  the  accident,  plaintiff  Narciso  Gutierrez,  a  truck 
passenger,  suffered  a  fractured  right  leg.  At  the  date  of  the  trial,  such 
injury has not yet healed properly. 

ISSUES​:  Whether  the  father  is  liable  for  the  acts  of  negligence  of  his  son, 
defendant Bonifacio Guiterrez? 

HELD​:  Yes.  At  the  same  time,  we believe that, as has been done in other cases, we 

can  take  cognizance  of  the  common  law  rule  on  the  same  subject.  In  the  United 
States,  it  is  uniformly  held  that  the  head  of  a  house, the owner of an automobile, 
who  maintains  it  for  the  general  use  of  his  family  is  liable  for  its  negligent 
operation  by  one  of  his  children,  whom  he designates or permits to run it, where 
the  car  is  occupied  and  being  used  at  the  time  of  the  injury  for  the  pleasure  of 
other  members  of  the  owner’s  family  than  the  child  driving  it.  The  theory  of the 
law  is  that  the  running  of  the  machine  by  a  child  to  carry  other  members  of  the 
family  is  within  the  scope  of  the  owner’s  business,  so  that  he  is  liable  for  the 
negligence of the child because of the relationship of master and servant. 

 
 
 

VILUAN V CA
(G.R. Nos. L-21477-81, April 29, 1966)

FACTS:

Seven persons were killed and thirteen others were injured in Bangar, La Union when a
 passenger bus on which they were riding caught fire after hitting a post and crashing against a tree.
The bus, owned by petitioner and driven by Hermenegildo Aquino, came from San Fernando, La
Union and was on its way to Candon, Ilocos Sur.
It appears that, as the bus neared the gate of the Gabaldon school building in the
municipality of Bangar, another passenger bus owned by Patricio Hufana and driven by Gregorio
Hufana tried to overtake it but that instead of giving way, Aquino increased the speed of his bus
and raced with the overtaking bus. Aquino lost control of his bus as a result of which it hit a post,
crashed against a tree and then burst into flames.
The heirs of those who died sued petitioner and the latter's driver, Aquino, for damages for
 breach of contract of carriage. Carolina Sabado,
Sabado , one of those injured, also sued petitioner and the
driver for damages.
Petitioner and her driver blamed respondent Gregorio Hufana for the accident. With leave
of court, they filed third party complaints against Hufana and the latter's employer, Patricio
Hufana.

ISSUE: W/N petitioner and respondent should have been held equally liable in the damage suits
since the proximate cause of the accident was found to be the concurrent negligence of the drivers
of the two buses

HELD: YES. The fact that the respondents were not sued as principals but were brought into the
cases as third party defendants should not preclude a finding of their liability.

In this case the third party complaints filed by petitioner and her driver charged respondents with
direct liability to the plaintiffs. It was contended that the accident was due "to the fault, negligence,
carelessness and imprudence of the third party defendant Gregorio Hufana". It should make no
difference therefore whether the respondents were brought in as principal defendants or as third-

 party defendants.
contract while thatNor should it make
of respondents any
arises difference
from that the liability of petitioner springs from
quasi-delict.

In case of injury to a passenger due to the negligence of the driver of the bus on which he was
riding and of the driver of another vehicle, the drivers as well as the owners of the two vehicles
are jointly and severally liable for damages. Some members of the Court, though, are of the view
that under the circumstances they are liable on quasi-delict.
BRITISH AIRWAYS VS CA
G.R. No. 92288​ February 9, 1993
Lessons Applicable: Actionable Document (Transportation)

FACTS:
■ February 15, 1981: First International Trading and General Services Co.
(First Int'l), a duly licensed domestic recruitment and placement agency,
received a telex message from its principal ROLACO Engineering and
Contracting Services (ROLACO) in Jeddah, Saudi Arabia to recruit Filipino
contract workers in its behalf
■ Early March 1981: ROLACO paid British Airways, Inc. (BA) Jeddah branch the
airfare tickets for 93 contract workers with specific instruction to transport
the workers to Jeddah on or before March 30, 1981
■ As soon as BA received a prepaid ticket advice from its Jeddah branch
informed ​First Int'l​.
■ Thereafter, ​First Int'l​ instructed ADB Travel and Tours. Inc. (its travel agent)
to book the 93 workers with BA but it failed
■ So ​First Int'l had to ​borrow P304,416.00 for the purchase of airline tickets
from the other airlines for the 93 workers who must leave immediately since
the visas are valid only for 45 days and the Bureau of Employment Services
mandates that contract workers must be sent to the job site within a period
of 30 days
■ First week of June, 1981: ​First Int'l​ was again informed by BA that it had
received a prepaid ticket advice from its Jeddah branch for the transportation
of 27 contract workers.
■ Immediately, First Int'l instructed its ADB to book the 27 contract workers
with the BA but only 16 seats were confirmed and booked on its June 9, 1981
flight.
■ June 9, 1981: only 9 workers were able to board said flight while the
remaining 7 workers were rebooked to:
■ June 30, 1981 - again cancelled by British without any prior notice to either
First Int'l or the workers
■ July 4,1981 - (6 + 7 workers) 13 workers were again cancelled and rebooked
to July 7, 1981.
■ July 6, 1981: First Int'l paid the travel tax of the workers as required by BA
but when the receipt of the tax payments was submitted, only 12 seats were
confirmed for July 7, 1981 flight
■ July 7, 1981: Flight was again cancelled without any prior notice
■ 12 workers were finally able to leave for Jeddah after First Int'l had bought
tickets from the other airlines
■ As a result of these incidents, First Int'l sent a letter to BA demanding
compensation for the damages it had incurred by the repeated failure to
transport its contract workers despite confirmed bookings and payment of
the corresponding travel taxes.
■ July 23, 1981: the counsel of First Int'l sent another letter to BA demanding
P350,000.00 damages and unrealized profit or income - denied
■ August 8, 1981: First Int'l received a telex message from ROLACO cancelling
the hiring of the remaining recruited workers due to the delay in transporting
the workers to Jeddah.
■ January 27, 1982: First Int'l filed a complaint for damages against First Int'l
 ■ CA Affirmed RTC: BA to pay First Int'l damages, attorneys fees and costs

ISSUE: W/N BA is not liable because there was no contract of carriage as no ticket was
ever issued

HELD: Affirmed. MODIFICATION that the award of actual damages be deleted

(reimbursed by ROLACO)
■ In dealing with the contract of common carriage of passengers for purpose of
accuracy, there are two (2) aspects of the same, namely:
■ (a) the contract "to carry (at some future time)," which contract is
consensual and is necessarily perfected by mere consent - applicable
in this case
■ (b) the contract "of carriage" or "of common carriage" itself which
should be considered as a real contract for not until the carrier is
actually used can the carrier be said to have already assumed the
obligation of a carrier
■ Even if a prepaid ticket advice (PTA) is merely an advice from the
sponsors that an airline is authorized to issue a ticket and thus no
ticket was yet issued, the fact remains that the passage had already
been paid for by the principal of the appellee, and the appellant had
accepted such payment
■ Besides, appellant knew very well that time was of the essence as the
prepaid ticket advice had specified the period of compliance therewith,
and with emphasis that it could only be used if the passengers fly on
BA
■ involvement of the BA in the contract "to carry" was well
demonstrated when the it immediately advised First Int'l
■ Acts of BA indeed constitute malice and evident bad faith which had
caused damage and besmirched the reputation and business image fo
First Int'l
Duavit vs. CA, Sarmiento & Catuar G.R. No. 82318 May 18, 1989

Facts:

Private respondents were on board a jeep when they met an accident with another jeep
driven by Sabiniano. This accident caused injuries to private respondents, thus they
filed a case for damages against driver Salbiniano and owner of the jeep Duavit. Duavit
admits ownership of the jeep but contends that he should not be held liable since
Salbiniano is not his employee and that the jeep was taken by Salbiniano without his
(Duavit) consent.

Issue: Whether or not the owner of a private vehicle which figured in an accident can be
held liable as an employer when the said vehicle was neither driven by an employee of
the owner nor taken with his consent.

Held: No, an owner of a vehicle cannot be held liable for an accident involving the said
vehicle if the same was driven without his consent or knowledge and by a person not
employed by him.

To hold the petitioner liable for the accident caused by the negligence of Sabiniano who
was neither his driver nor employee would be absurd as it would be like holding liable
the owner of a stolen vehicle for an accident caused by the person who stole such
vehicle.

In Duquillo v Bayot (1939), SC ruled that an owner of a vehicle cannot be held liable
for an accident involving a vehicle if the same was driven without his consent or
knowledge and by a person not employed by him. This ruling is still relevant and
applicable, and hence, must be upheld.

CA’s reliance on the cases of Erezo v Jepte and Vargas v Langcay is misplaced and
cannot be sustained. In Erezo v Jepte case, defendant Jepte was held liable for the
death of Erezo even if he was not really the owner of the truck that killed the latter
because he represented himself as its owner to the Motor Vehicles Office and had it
registered under his name; he was thus estopped from later on denying such
representation. In Vargas, Vargas sold her jeepney to a 3rd person, but she did not
surrender to the Motor VehiclesOffice the corresponding AC plates. So when the
jeepney later on figured in an accident, she was held liable by the court. Holding that
the operator of record continues to be the operator of vehicle in contemplation of law,
as regards the public and 3rd persons.

The circumstances of the above cases are entirely different from those in the present
case. Herein petitioner does not deny ownership of vehicle but denies having employed
or authorized the driver Sabiniano. The jeep was virtually stolen from the petitioner’s
garage. Decision and resolution annulled and set aside.
Neferoh @uihfers, Ibl. ^s Nkubfotikb \peliohist, Ibl.
A.P. Bk. ?96571= \eptej`er 4, 07?6

VKWIL3 Boture obf Ennelt kn K`hiaotikbs

Nolts3
Kb Ouaust 07, ?997, Neferoh @uihfers, Ibl. (N@I) ebteref ibtk ob oareejebt witd Nkubfotikb
\peliohists, Ibl. (N\I) wdere`y tde hotter, os su`lkbtroltkr, ubfertkkm tde lkbstrultikb kn tde
fiopdroaj wohh, loppiba `eoj, obf auife wohhs kn tde Vronohaor Whozo hklotef ot Jomoti Lity (tde
Wrkcelt), nkr o tktoh lkbtrolt prile kn W1,677,777.77. Ubfer tde oareejebt, N@I wos tk poy o
fkwbpoyjebt equivohebt tk 07% kn tde lkbtrolt prile obf tde `ohoble, tdrkuad o prkaress `ihhiba
every ?5 foys, poyo`he bkt hoter tdob ? weem nrkj presebtotikb kn tde `ihhiba.
N\I tdeb nihef o lkjphoibt nkr \uj kn Jkbey oaoibst N@I `enkre tde PVL kn Jomoti Lity seemiba tk
lkhhelt tde ojkubt represebtiba @ihhibas Bk. < obf 6, witd ollruef ibterest nrkj Ouaust ?, ?99? phus
jkroh obf exejphory fojoaes witd ottkrbey’s nees.
ottkrbey’s nees. Ib its lkjphoibt,N\I ohheaef tdot N@I renusef tk
poy soif ojkubt fespite fejobf obf its lkjphetikb kn 91% kn tde lkbtroltef wkrms.
PVL ruhef ib novkr kn N\I krferiba N@I tde poyjebt kn `ihhibas < & 6 phus ?0% heaoh ibterest nrkj
 Ouaust <7, ?99?.
?99?.
Vde LO onnirjef tde Felisikb kn tde hkwer lkurt, `ut witd jkfinilotikbs.

Issue3 QkB tde N@I is k`hiaef tk poy tde ?0 % ibterest kn tde `ihhibas < & 6 lkbsiferiba tde boture kn
tde k`hiaotikb.
k`hiaotikb.

Puhiba3
Vdis lose, dkwever, fkes bkt ibvkhve ob olquiesleble tk tde tejpkrory use kn o porty’s jkbey
porty’s jkbey `ut
o pernkrjoble kn o portiluhor servile. Nkr trobsoltikbs ibvkhviba poyjebt kn ibfejbities ib tde
lkblept kn fojoaes orisiba nrkj fenouht ib tde pernkrjoble kn k`hiaotikbs ib aeberoh obf/kr nkr
jkbey cufajebt bkt ibvkhviba o hkob kr nkr`eoroble kn jkbey, akkfs, kr lrefit, tde akverbiba
prkvisikb is Ort. 0079 kn tde Livih Lkfe preslri`iba o yeorhy >% ibterest. Vdus, \L krferef N@I tk
poy N\I tde `ihhibas < obf 6 phus ibterest refulef tk kbhy >% per obbuj lkbsiferiba tde nolt tdot tde
k`hiaotikb ibvkhvef dereib fkes bkt portome kn o hkob kr nkr`eoroble kn jkbey.
 TABLE OF CONTENTS
Obligations

The Hongkong & Shanghai Banking Corp. vs National Steel (Performance)…. Pp. 1

Coroan vs China Banking Corporation (Soliar! "ia#ilit!)………………………… Pp. $

Sps. %onsa! an omarco vs Soli#ank ('tingishment)…… …………………….. Pp. *

Contracts

+eorg vs Hol! Trinit!

Trinit! College, -nc ('ssential 'lements)………………………………
'lements)……………………………… Pp. 

/o0ales vs ime (/elativit! of Contracts)…………………………………………………… Pp. 2

PN3C vs 4eppel Philippine Holings, -nc (3ption Contract)………………………

Contract)……………………… Pp. 567

Centr! Properties, -nc. vs Ba#iano (Breach of Contract)………………

Contract)……………………………Pp.
……………Pp. 768

Slpicio "ines, -nc vs. Sesante (Breach of Contract)…………………………………

Contract)………………………………… Pp. 8619

:ictoria, et al. vs Pilaoan (Simlate Contract)………………………………………

Contract)……………………………………… Pp. 19611

Catha! Paci;ic <ir=a!s "t. vs Sps. >ente#ella (Breach of Contract)……… Pp. 1161$

Heirs of Nativia vs %ana aricia6Nativia, et, al (:oi Contract)……..Pp. 1$61*

Tan vs Hosana (:oi or -neistent Contract)…………………………………………Pp. 1*61

/anara vs elos <ngeles (:oi or -neisten Contracts)………………………..Pp. 1612

ercees <#ella , et al. vs Heirs of >rancisca San %an…………………………

%an………………………………Pp.
……Pp. 12

Sales
Thelma /orige? vs. Sps. %aime & <rmi Sioson (Contract to Sell)……………….Pp.
Sell)……………….Pp. 15

3scar :illarta vs +aioso Talavera ('@ita#le ortgage)………………………… Pp. 17

+regorio vs Clig (/eemption)……………………………………………………

(/eemption)…………………………………………………………………Pp.
……………Pp. 18

elecio omingo vs Sps. +enaro & 'lena olina…………………………………….

olina……………………………………. Pp. $96$1

'@ita#le Savings Bank vs /osalina Paces……………………………………………….Pp.

Paces……………………………………………….Pp. $1
Lease

Heirs of +amaliel <l#ano vs Sps. /o#erto & ena /avanes

/avanes ("ease Contract)… Pp.
Pp. $$

 Agency

ra. ercees 3liver vs PS Bank & "ilia Castro (Contract of <genc!)……..…….. Pp. $*

C-<< vs Anchan (Special Po=er of <ttorne!)……………………………………… Pp. $6$5

Partnership

ichael C. +! vs <tt!. +lenn +acott (+eneral Partnership)…………………….. Pp. $56$8

Credit 

Tarcisio Calilng vs Paramont -nsrance (Simple "oan)………………………… Pp. $86$

Sps. Tan vs China Banking Corp (<pplication of Pa!ments)…………………….. Pp. $6*9

Torts and Damages

Techno evelopment vs :iking etal -nstries, -nc ('emplar!)……………...

('emplar!)…………….. . Pp. *1

Sps. Timao vs /ral Bank of San %ose ('emplar!

('emplar! amages)……………………. Pp. *$

<nna arie +ma#on vs PNB (oral an 'emplar! amages)……………….. Pp. **

Torres6ari Brokerage vs >'B itsi arine -nsrance (asi6elict) Pp. *

'/<"C3 vs Sposes Slpicio & Patricia /amos (oral an <ctal amages)
……………… Pp. *26*5

$
Lease

Heirs of +amaliel <l#ano vs Sps. /o#erto & ena /avanes

/avanes ("ease Contract)… Pp.
Pp. $$

 Agency

ra. ercees 3liver vs PS Bank & "ilia Castro (Contract of <genc!)……..…….. Pp. $*

C-<< vs Anchan (Special Po=er of <ttorne!)……………………………………… Pp. $6$5

Partnership

ichael C. +! vs <tt!. +lenn +acott (+eneral Partnership)…………………….. Pp. $56$8

Credit 

Tarcisio Calilng vs Paramont -nsrance (Simple "oan)………………………… Pp. $86$

Sps. Tan vs China Banking Corp (<pplication of Pa!ments)…………………….. Pp. $6*9

Torts and Damages

Techno evelopment vs :iking etal -nstries, -nc ('emplar!)……………...

('emplar!)…………….. . Pp. *1

Sps. Timao vs /ral Bank of San %ose ('emplar!

('emplar! amages)……………………. Pp. *$

<nna arie +ma#on vs PNB (oral an 'emplar! amages)……………….. Pp. **

Torres6ari Brokerage vs >'B itsi arine -nsrance (asi6elict) Pp. *

'/<"C3 vs Sposes Slpicio & Patricia /amos (oral an <ctal amages)
……………… Pp. *26*5

$
THE
THE HON
HON! !ON
ON " SHANSHANH
HA#A# BAN
AN!#
!#N
N CO$PO
O$PO$A
$AT#
T#ON
ON%% L#&#
L#&#TE
TED
D 's(
's(
NAT#ONAL STEEL CO$PO$AT#ON " C#T) T$*ST BAN!#N CO$PO$AT#ON
($( NO( +,-.,/% Febr0ary 1.% 12+/
3A$DELE4A% 3(

><CTSD
The Natio
Nationa
nall Steel
Steel Corpor
Corporati
ation
on (NSC)
(NSC) an
an 4lockn
4lockner
er 'ast
'ast <sia
<sia "imit
"imite
e
(4lockner) entere into an 'port Sales Contract to =hich NSC sol 1,$99 metric
tons of prime col rolle coilsto 4lockner. -n secring its pa!ment to NSC, 4lockner
applie =ith HSBC an irrevoca#le
irrevoca#le "etter of Creit amonting to 58,999 AS ollars
naming NSC as the #ene;iciar! to the "etter of Creit.

HSBC then isse an irrevoca#le "etter of Creit in favor of NSc governe #!

ACP 99 an frther stiplate that HSBC has the o#ligation to NSC pon the
presentment of the ocments liste in the "etter of Creit.

There =as
=as an amenment on the "etter
"etter of Creit an it =as
=as one t=ice. The
;irst amenment =as for the transferring of the terms of the contract from >3B ST
lligan to >3B ST anila an frther increase the amont to E88,999, =hile the
secon amenment =as for the eliver! ate of the prime col rolle coils.

The prime col rolle coils =ere loae to : Sea ragon ner China 3cean
Shipping Compan! =ith Bill of "aing No. H4+ $55991 an the same arrive in
Hong
Hong 4ong.
4ong. There
Thereaft
after
er,, NSC
NSC throg
throghh Cit!
Cit! Trst
rst facil
facilita
itate
te the collec
collectio
tion
n of its
pa!ment from 4lockner #! the "etter of Creit isse #! HSBC. Thereafter, Cit! Trst 
sent HSBC a collection 3rer as HSBC ackno=lege the receipt.

4lockner refse pa!ment neither to give an! reason of sch refsal. NSC
sent HSBC a eman letter.

-SSA'D
Fho among the parties #ear the lia#ilit! to pa! the amont state in the
"etter of CreitG

H'"D
The Cort rle #ase on the principle of -nepenence on the la= on "etters
of Creit. -n this case, HSBC has the o#ligation as it #ins itself #oth to 4lockner an
NSC as it freel! an kno=ingl!
kno=ingl! mst perform an act, =here its o#ligation arises from
the t=o sorce, >irst, it has a contractal o#ligation to 4lockner =hen it agree to
pa! NSC pon the e presentment to it of the "C #! Cit! Trst, Secon, HSBC has
the o#ligation to NSC to honor the "C. The o#ligation of HSBC to pa! NSC ner the
"C =ill stan inepenent even if 4lockner refse to pa!.

*
$OSAL#NA CA$ODAN 's( CH#NA BAN!#N CO$PO$AT#ON
($( No( 1+25.1% Febr0ary 1.% 12+/
SERENO, CJ.

><CTSD
< complaint for a sm of mone! =as ;ile against Coroan, et.al #! China
Banking Corporation in relation to the promissor! note =hich the! promise to pa!
0ointl! an severall! the amont of $.8 illion pesos. >or the secrit! of the loan, a
real estate mortgage =as eecte an a Sret! <greement in favor of China Bank 
=as eecte. The =arranties =ere mae #! the principal e#tor.
<fter the petitioners faile to pa! their loan from China Bank espite the
emans mae this case arise.

-SSA'D
Fhether /osalina is lia#le 0ointl! an severall! =ith Bar#ara an /e##eca for
the pa!ment of the loan o#ligationG

H'"D

Strictl! speaking, garant! an sret! are nearl! relate, an man! of the
principles are common to #oth. Ho=ever, ner or civil la=, the! ma! #e
istingishe thsD < sret! is sall! #on =ith his principal #! the same
instrment, eecte at the same time, an on the same consieration. He is an
original promissor an e#tor from the #eginning, an is hel, orinaril!, to kno=
ever! efalt of his principal. Asall!, he =ill not #e ischarge, either #! the mere
inlgence of the creitor to the principal, or #! =ant of notice of the efalt of the
principal, no matter ho= mch he ma! #e in0re there#!. 3n the other han, the
contract of garant! is the garantors o=n separate nertaking, in =hich the
principal oes not 0oin. -t is sall! entere into #efore or after that of the principal,
an is often spporte on a separate consieration from that spporting the
contract of the principal. The original contract of his principal is not his contract,
an he is not #on to take notice of its non6performance. He is often ischarge #!
the mere inlgence of the creitor to the principal, an is sall! not lia#le nless
noti;ie of the efalt of the principal.

Simpl! pt, a sret! is istingishe from a garant! in that a garantor is

the insrer of the solvenc! of the e#tor an ths #ins himself to pa! if the
principal is na#le to pa! =hile a sret! is the insrer of the e#t, an he o#ligates
himself to pa! if the principal oes not pa!.
Fhen /osalina af;ie her signatre to the /eal 'state ortgage as mortgagor an
to the Sret! <greement as sret! =hich covere the loan transaction represente
#! the Promissor! Note, she there#! #on herself to #e lia#le to China Bank in case


the principal e#tors, Bar#ara an /e#ecca, faile to pa!. She conse@entl! #ecame
lia#le to responent #ank for the pa!ment of the e#t of Bar#ara an /e#ecca =hen
the latter t=o actall! i not pa!.

SPO*SES FLO$ANTE E( 3ONSA) and L*46#&#NDA L( 3ONSA) and &O&A$CO

#&PO$T CO(% #NC(% 's( SOL#DBAN! CO$PO$AT#ON 7no8 &ET$OPOL#TAN BAN! 
 AND T$*ST CO&PAN)9

($( No( 12/.5:% April /% 12+/

$E)ES% 3(

>actsD
Petitioners o#taine a loan in the name of omarco from Soli Bank. The!
eecte a promissor! note an secrit! to the loan the! mortgage * parcels of
lan.

Bt #ecase of the ;inancial crisis on 17 the! =ere strggling to pa!. <s
the! efalte to pa!, Soli#ank proceee to etra 0iciall! foreclose the
mortgage.

-SSA'D

Fhether the proposal of the sposes to etingish their o#ligation #! =a! of 
acion en pago novates the mortgage contract contractG

H'"D
3n the @estion of the petitioners faile proposal to etingish their loan
o#ligations #! =a! of acion en pago, no #a faith can #e impte to Soli#ank for
refsing the offere settlement as to rener itself lia#le for moral an eemplar!
amages after opting to etra0iciall! foreclose on the mortgage. -n Tecnogas
Philippines anfactring Corporation v. Philippine National Bank, the Cort helD
acion en pago is a special moe of pa!ment =here#! the e#tor offers another
thing to the creitor =ho accepts it as e@ivalent of pa!ment of an otstaning
o#ligation. The nertaking is reall! one of sale, that is, the creitor is reall! #!ing
the thing or propert! of the e#tor, pa!ment for =hich is to #e charge against the
e#tors e#t. <s sch, the essential elements of a contract of sale, namel!, consent,
o#0ect certain, an case or consieration mst #e present. -t is onl! =hen the thing
offere as an e@ivalent is accepte #! the creitor, that novation takes place,
there#!, totall! etingishing the e#t.
3n the ;irst isse, the Cort of <ppeals i not err in rling that Tecnogas has
no clear legal right to an in0nctive relief #ecase its proposal to pa! #! =a! of 
acion en pago i not etingish its o#ligation. Anenia#l!, Tecnogas proposal to
pa! #! =a! of acion en pago =as not accepte #! PNB. Ths, the naccepte
proposal neither novates the parties mortgage contract nor sspens its eection

2
as there =as no meeting of the mins #et=een the parties on =hether the loan =ill
#e etingishe #! =a! of acion en pago. Necessaril!, pon Tecnogas efalt in its
o#ligations, the foreclosre of the /' #ecomes a matter of right on the part of PNB,
for sch is the prpose of re@iring secrit! for the loans.

BEN3#E B( EO$ 's( HOL) T$#N#T) COLLEE% #NC(

($( No( +:2.2,% 30ly 12% 12+/
PE$E4% 3(

><CTSD

The Hol! Trinit! college has a ance grop an a gran choral fone #!
Sister ealle. The grop travels aron the =orl to compete. 'nri@e? allegel!
represente sister ealle an #ooke the ance grop airplane tickets from the
petitioner. The t=o eecte a emoranm of <greement =ith ee of 
<ssignment.

-SSA'D

Fhether the parties have entere into a vali contractG

H'"D

Ies. The essential re@isites of a contract ner <rticle 1*18 of the Ne= Civil
Coe areD
( 1) Consent of the contracting partiesJ ($) 3#0ect certain =hich is the s#0ect matter
of the contractJ (*) Case of the o#ligation =hich is esta#lishe. The valiit! of the
3< is #eing assaile for a efect in consent. Aner <rticle 1**9 of the Civil Coe,
consent ma! #e vitiate #! an! of the follo=ingD (1) mistake, ($) violence, (*)
intimiation, ( ) ne in;lence, an ( 2) fra. Aner the same provision, the
contract #ecomes voia#le. There is fra =hen one part! is ince #! the other to
enter into a contract, throgh an solel! #ecase of the latters insiios =ors or
machinations. Bt not all forms of fra can vitiate consent. Aner <rticle 1**9,
fra refers to olo casante or casal fra, in =hich, prior to or simltaneos =ith
eection of a contract, one part! secres the consent of the other #! sing
eception, =ithot =hich sch consent =ol not have #een given. Sr. ealle is
presme to kno= the import of her thm#mark in the 3<. Fhile she =as inee
con;ine at the AST Hospital at that time, responent ho=ever faile to prove that Sr.
ealle =as too ill to comprehen the terms of the contract. oreover, there is
nothing in the eposition that tens to prove that Sr. ealles consent =as vitiate.
The trial cort categoricall! rle that Sr. ealle af;ie her thm#mark as
Presient of Hol! Trinit! College an therefore, responent is a part! to the 3<.
'ffectivel!, responent has control an spervision of the +rop particlarl! in the
selection, hiring an termination of the mem#ers. Sr. ealle, as Presient of Hol!

5
Trinit!, is clothe =ith sf;icient athorit! to enter into a loan agreement. Ths, an!
agreement or contract entere into #! Sr. ealle as Presient of Hol! Trinit!
College relating to the +rop #ears the consent an approval of responent. -t is
throgh these !namics that =e cannot falt petitioner for rel!ing on Sr. ealles
athorit! to transact =ith petitioner.

3*ANA 6DA( DE $O3ALES 's( &A$CEL#NO D#&E

($( NO( +:.5.,% Febr0ary +2% 12+/
PE$ALTA% 3(

><CTSD

/o0ales is a registere o=ner of a parcel of lan locate at Nasg#, Batangas.

She eecte a pacto e retro contract =ith responent to =hich =as prchase in
the amont of P$,29$,*$.19. Consiering that the eecte sale =as a pacto e
retro, /o0ales reserve the right to reprchase the propert! from responent =ith
the agreement of a perio of nine months at the same prchase price. <fter the
agree a perio to reprchase the petitioner i not reprchase the s#0ect real
propert! espite repeate emans.

The petitioner enie the eection of the pacto e retro contract =ith the
responent an arge that ever!thing p to the signatre of the notar! p#lic =as
a falsit!.

The /TC, on %l! 1$, $995 ismisse the case on the gron that the case =as
not ;ile #! a real part!6in6interest.

-SSA'D

Fhether :illamin is priv! to the contract of pacto e retro sale #et=een petitioner
an responentG

H'"D

<s a general rle, an as consistentl! rle #! this cort, the parties to a
contract are al=a!s hel as the inispensa#le part! or real parties6in6interest, onl!
parties =ho eecte a contract are #ining to sch o#ligation an its faithfl
performance, an the onl! ones =ho has the right to #ring action in case of #reach
or efalt. <s to this case, the cort properl! fon that :illamin is not a priv! to the
contract, the s#0ect pacto e retro contract cannot eten to her as she is not a real
part!6in6interest, as she in no =a! =ol pre0ice her neither #ene;it from its
procees.

7
 Correlating to the general rle on real part!6in6interest on the la= on
contracts, as to the eecte pacto e retro contract, it is the venor (petitioner) an
the venee (responent), their heirs, sccessors, an assigns have the right to #ring
sch action of consoliation of title an o=nership prsant to <rticle 1515 of the
Civil Coe.

-n the case /ep#lic v. +ri0alo, this Cort rle an e;ine =ell of =ho is a
priv! to a contract, =here thesch priv! enotes the concept of sccession =ho has
the real right to s#stitte for the contracting parties in their personal rights tie
an #one in 0icial relations #! virte of a contract.

-n the case of :illamin, she cannot personall! s#stitte for responent, as

she =as on the =rong #elief that fning the prchase of the s#0ect real propert!
conferre her an! right over the same, nless other=ise, the pacto e retro contract 
epressl! conferre her an! right over the propert!, in sch case she is consiere
#! la= as a priv!, #t a#sence of sch =ol #e ftile on her part, as she =as in no
=a! an heir, sccessor, or assign of responent.

PH#L#PP#NE NAT#ONAL O#L CO&PAN) et al( 's( !EPPEL PH#L#PP#NES

HOLD#NS% #NC(
($( No( 121252% 30ly 15% 12+/
B$#ON% 3(

><CTSD

4eppel entere into a lease agreement =ith "?on Steveoring Corporation

stating that the eleven hectares of lan locate in Baan, Batangas =ill #e lease for
the perio of $2 !ears for Php $.1 million. That, at the option of "?on Steveoring,
the rental fee col #e converte to e@it! shares in 4eppel. <fter the lapse of the
lease contract, 4eppel =as given an option to prchase, =ith the provision that the
@ali;ication of a foreign corporation to o=n properties in the Philippines as
provie for #! la= is achieve. Anfortnatel!, 4eppelKs percentage of >ilipino
o=nership =as less than =hat the la= provie for. Therefore, the lease =ol not 
#e rene=e for another t=ent! ;ive !ears an there =ill #e no option to prchase.
Nevertheless, the PN3C prchase the lan from "?on Steveoring. Fhen 4eppel
=as rea! to prchase the lan, ho=ever, PN3C refse hence the case =as ;ile.

-SSA'D

Fhether or not the option to prchase the lan given to 4eppel is vali an
spporte #! a vala#le consierationG

H'"D

8
 <n option contract is a contract =here one person (the offerorLpromissor)
grants to another person (the offereeLpromisee) the right or privilege to #! (or to
sell) a eterminate thing at a ;ie price, if he or she chooses to o so =ithin an
agree perio. <s a contract, it mst necessaril! have the essential elements of 
s#0ect matter, consent, an consieration. <lthogh an option contract is eeme a
preparator! contract to the principal contract of sale, it is separate an istinct 
therefrom, ths, its essential elements shol #e istingishe from those of a sale.
<n option contract, the s#0ect matter is the right or privilege to #! (or to sell) a
eterminate thing for a price certain, =hile in a sales contract, the s#0ect matter is
the eterminate thing itself. The consent in an option contract is the acceptance #!
the offeree of the offerorKs promise to sell (or to #!) the eterminate thing, i.e., the
offeree agrees to hol the right or privilege to #! (or to sell) =ithin a speci;ie
perio. This acceptance is ifferent from the acceptance of the offer itself =here#!
the offeree asserts his or her right or privilege to #! (or to sell), =hich constittes
as his or her consent to the sales contract. The consieration in an option contract 
ma! #e an!thing of vale, nlike in a sale =here the prchase price mst #e in
mone! or its e@ivalent. There is sf;icient consieration for a promise if there is
an! #ene;it to the offeree or an! etriment to the offeror. >or niformit! an
consistenc! in contract interpretation, the #etter rle to follo= is that the
consieration for the option contract shol #e clearl! speci;ie as sch in the
option contract or clase. 3ther=ise, the offeree mst #ear the #ren of proving
that a separate consieration for the option contract eists. +iven or ;ining that
the <greement i not categoricall! refer to an! consieration to spport 4eppelKs
option to #! an for 4eppelKs failre to present evience in this regar, =e cannot 
phol the eistence of an option contract in this case. The a#sence of a
consieration spporting the option contract, ho=ever, oes not invaliate an
offer to #! (or to sell). <n option nspporte #! a separate consieration
stans as an naccepte offer to #! (or to sell) =hich, =hen properl! accepte,
ripens into a contract to sell. <ccoringl!, =hen an option to #! or to sell is not 
spporte #! a consieration separate from the prchase price, the option
constittes as an offer to #! or to sell, =hich ma! #e =ithra=n #! the offeror at 
an! time prior to the commnication of the offereeKs acceptance. Fhen the offer is
l! accepte, a mtal promise to #! an to sell ner the ;irst paragraph of 
<rticle 17 of the Civil Coe enses an the partiesK respective o#ligations
#ecome reciprocall! emana#le. <pplie to the present case, =e ;in that the offer
to #! the lan =as timel! accepte #! 4eppel.

CENT*$) P$OPE$T#ES% #NC( 's( ED;#N 3( BAB#ANO and E&&A CONCEPC#ON

($( No( 112:,<% 30ly 5% 12+/
PE$LAS=BE$NABE% 3(


><CTSD

Ba#iano =as hire #! Centr! Properties, -nc. (CP-) an later on =as mae
as :ice Presient for Sales. The emplo!ment contract states that he is prohi#ite
from iscssing con;iential matters, also from engaging con;licting trae an
#siness =hile emplo!e #! the same an =ithin one !ear from the ate of 
resignation or termination. >ailre to compl! an violate the terms =ol nllif!
an voi the compensation, an other #ene;its he receives. -n the coming events,
Ba#iano =as later terminate on the grons of (a) incrring <F3"J (#) violating
the MCon;ientialit! of ocments an Non6Compete ClaseM =hen he 0oine a
competitor enterprise =hile still =orking for CP- an provie sch competitor
enterprise information regaring CP- s marketing strategiesJ an (c) recriting CP-
personnel to 0oin a competitor.

-SSA'D

Fhether or not there is a #reach of contract #! Ba#ianoG

H'"D

<rticle 1*79 of the Civil Coe provies that MiOf the terms of a contract are
clear an leave no o#t pon the intention of the contracting parties, the literal
meaning of its stiplations shall control. Ths, in the interpretation of contracts, the
Cort mst ;irst etermine =hether a provision or stiplation therein is am#igos.
<#sent an! am#igit!, the provision on its face =ill #e rea as it is =ritten an
treate as the #ining la= of the parties to the contract. -n the case at #ar, CP-
primaril! invoke the MCon;ientialit! of ocments an Non6Compete ClaseM
fon in Ba#ianos emplo!ment contract to 0stif! the forfeitre of his commissions.

< 0icios revie= of the recors reveals that in his resignation letter ate
>e#rar! $2, $99, Ba#iano categoricall! amitte to CP- Chairman %ose <ntonio
that on >e#rar! 1$, $99, he soght emplo!ment from >irst +lo#al, an ;ive (2)
a!s later, =as amitte thereto as vice presient. >rom the foregoing, it is evientl!
clear that =hen he soght an eventall! accepte the sai position =ith >irst 
+lo#al, he =as still emplo!e #! CP- as he has not formall! resigne at that time.
-rrefraga#l!, this is a glaring violation of the MCon;ientialit! of ocments an Non6
Compete ClaseM in his emplo!ment contract =ith CP-, ths, 0stif!ing the forfeitre
of his npai commissions.

S*LP#C#O L#NES% #NC( 's( NAPOLEON SESANTE% no8 s0bstit0ted by &A$#BEL

 AT#LANO% !$#STEN &A$#E% CH$#ST#AN #ONE% !ENNETH !E$$N and !A$#SNA
!ATE% all s0rnamed SESANTE
($( No( +<1/,1% 30ly 1<% 12+/
BE$SA&#N% 3(

19
><CTSD

L: Princess of the 3rient, a passenger vessel o=ne an operate #!

Slpicio "ines, -nc., sank near >ortne -slan in Batangas. 129 passengers =ere
reporte lost. 3ne of the srvivor of the passenger, Sesante, ;ile for #reach of 
contract =ith amages.

-SSA'D

1) Fhether or not the petitioner is lia#le for #reach of contract =ith amages

$) Fhether or not the petitioner is lia#le for the responentKs lost #elongings

H'"D
1. Ies. <rticle 172 of the Civil Coe oes not esta#lish a presmption of 
negligence #ecase it eplicitl! makes the common carrier lia#le in the event of 
eath or in0r! to passengers e to the negligence or falt of the common carriers
emplo!ees. The lia#ilit! of common carriers ner <rticle 172 is emane #! the
t! of etraorinar! iligence re@ire of common carriers in safel! carr!ing their
passengers. 3n the other han, <rticle 1725 of the Civil Coe la!s o=n the
presmption of negligence against the common carrier in the event of eath or
in0r! of its passenger.OThe presmption of negligence applies so long as MM there is
evience sho=ing thatD (a) a contract eists #et=een the passenger an the common
carrierJ an (#) the in0r! or eath took place ring the eistence of sch contract.
-n sch event, the #ren shifts to the common carrier to prove its o#servance of 
etraorinar! iligence, an that an nforeseen event or force ma0ere ha case
the in0r!. The petitioner =as irectl! lia#le to Sesante an his heirs. < common
carrier ma! #e relieve of an! lia#ilit! arising from a fortitos event prsant to
<rticle 117 of the Civil Coe. Bt =hile it ma! free a common carrier from lia#ilit!,
the provision still re@ires eclsion of hman agenc! from the case of in0r! or
loss.

Fe agree =ith the petitioner that moral amages ma! #e recovere in an

action pon #reach of contract of carriage onl! =henD (a) eath of a passenger
reslts, or ( #) it is prove that the carrier =as gilt! of fra an #a faith, even if 
eath oes not reslt. ** Ho=ever, moral amages ma! #e a=are if the
contractal #reach is fon to #e =anton an eli#eratel! in0rios, or if the one
responsi#le acte fralentl! or =ith malice or #a faith. Fhile there is no har6
an6fast rle in etermining =hat is a fair an reasona#le amont of moral amages,
the iscretion to make the etermination is loge in the trial cort =ith the
limitation that the amont shol not #e palpa#l! an scanalosl! ecessive.

The a=ar of temperate amages =as proper. Temperate amages ma! #e

recovere =hen some pecniar! loss has #een sffere #t the amont cannot, from
the natre of the case, #e proven =ith certaint!.

11
-n contracts an @asi6contracts, the Cort has the iscretion to a=ar eemplar!
amages if the efenant acte in a =anton, fralent, reckless, oppressive, or
malevolent manner. -nee, eemplar! amages cannot #e recovere as a matter of 
right, an it is left to the cort to ecie =hether or not to a=ar them. >irst of all,
eemplar! amages i not have to #e speci;icall! pleae or prove, #ecase the
corts ha the iscretion to a=ar them for as long as the evience so =arrante.
<n, seconl!, eemplar! amages are esigne #! or civil la= to Mpermit the
corts to reshape #ehavior that is sociall! eleterios in its conse@ence #! creating
negative incentives or eterrents against sch #ehavior. M The actations of the
petitioner an its agents ring the incient attening the nfortnate sinking of the
L: Princess of the 3rient =ere far #elo= the stanar of care an circmspection
that the la= on common carriers emane. <ccoringl!, =e here#! ;i the sm of Pl
,999,999.99 in orer to serve fll! the o#0ective of eemplarit! among those engage
in the #siness of transporting passengers an cargo #! sea.

$. The rle that the common carrier is al=a!s responsi#le for the passengers
#aggage ring the vo!age nees to #e emphasi?e. <rticle 172 of the Civil Coe
oes not eempt the common carrier from lia#ilit! in case of loss, #t onl! highlights
the egree of care re@ire of it epening on =ho has the csto! of the
#elongings. Hence, the la= re@ires the common carrier to o#serve the same
iligence as the hotel keepers in case the #aggage remains =ith the passengerJ
other=ise, etraorinar! iligence mst #e eercise. >rthermore, the lia#ilit! of 
the common carrier attaches even if the loss or amage to the #elongings reslte
from the acts of the common carriers emplo!ees, the onl! eception #eing =here
sch loss or amages is e to force ma0ere

$OSA$#O 6#CTO$#A and EL&A P#DLAOAN 's( NO$&#TA 3ACOB P#DLAOAN%

HE$&#N##LDA P#DLAOAN and E*FE&#A P#DLAOAN
($( No( +:/.<2% April 12% 12+/
B$#ON% 3(

><CTSD

'lma an /osario are live6in partners, throgh their har =ork an
partnership the! ac@ire a hose an lot. Ho=ever, =hen /osario left to =ork 
overseas, 'lma mortgage the s#0ect propert!, =ith the fear of the propert! #eing
foreclose trne aske their sister6in6la=, 'femia =ho eventall! aske the help
of her aghter, Normita, to reeem the sai propert!. -nstea of eecting a ee of 
Sale the! eecte a ee of onation in favor of 'lma to avoi pa!ing Capital +ains
Ta. Fhen /osario iscovere the transaction the t=o eecte, she ;ile a

1$
complaint together =ith 'lma for the reformation of arging that the ee of 
onation =as simlate.

-SSA'D

Fhether the contract =as simlate or notG

H'"D

Fe ;in that the ee of onation =as simlate an the partiesK real intent 
=as to enter into a sale.

The petitioners arge that the ee of onation =as simlate an that the
parties entere into an e@ita#le mortgage. 3n the other han, the responents
en! the claim of e@ita#le mortgage an arge that the! valil! ac@ire the
propert! via sale. The /TC rle that there =as onation #t onl! as to half of the
propert!. The C< agree =ith the responents that the ee of onation =as not 
simlate, rel!ing on the presmption of reglarit! of p#lic ocments.

Fe ;irst =ell on the genineness of the ee of onation. There are t=o
t!pes of simlate ocments  a#solte an relative. < ocment is a#soltel!
simlate =hen the parties have no intent to #in themselves at all, =hile it is
relativel! simlate =hen the parties conceale their tre agreement. The tre
natre of a contract is etermine #! the partiesK intention, =hich can #e
ascertaine from their contemporaneos an s#se@ent acts.

CATHA) PAC#F#C A#$;A)S LTD( 's( SPS( A$N*LFO and E6EL)N F*ENTEBELLA
($( No( +,,1,-% 30ly 12% 12+/
SE$ENO% C3(

><CTSD

>ente#ella an compan! =as athori?e #! the Speaker of the Hose to

travel on of;icial #siness to <stralia to convene =ith the <stralian Parliament.
The! #oght Bsiness Class tickets from anila to S!ne! !et the! then change it 
to >irst Class. ring the ;light the! =ere not place on the >irst Class section an
=as not treate as =hat ;irst class passengers =as meant to #e treate #! the
emplo!ees of the carriage. Apon their arrival in the Philippines, the! emane a
formal apolog! an pa!ment of amages from petitioner. <fter concting an
investigation, the petitioner rle that the responents incrre no amage.

-SSA'SD

1) Fhether there =as a #reach of contract on the part of the petitionerG

1*
$) Fhether the petitioners are entitle to amagesG

H'"D

1) -n <ir >rance v. +illego, this Cort rle that in an action #ase on a #reach of 
contract of carriage, the aggrieve part! oes not have to prove that the common
carrier =as at falt or =as negligentJ all that he has to prove is the eistence of the
contract an the fact of its nonperformance #! the carrier. -n this case, #oth the trial
an appellate corts fon that responents =ere entitle to >irst Class
accommoations ner the contract of carriage, an that petitioner faile to
perform its o#ligation,

$) oral an eemplar! amages are not orinaril! a=are in #reach of 
contract cases. This Cort has hel that amages ma! #e a=are onl! =hen the
#reach is =anton an eli#eratel! in0rios, or the one responsi#le ha acte
fralentl! or =ith malice or #a faith. Ba faith is a @estion of fact that mst #e
proven #! clear an convincing evience. Both the trial an the appellate corts
fon that petitioner ha acte in #a faith. <fter revie= of the recors, Fe ;in no
reason to eviate from their ;ining. -n Singapore <irlines "imite v. >ernane?, #a
faith =as impte #! the trial cort =hen it fon that the gron staff ha not 
accore the attention an treatment =arrante ner the circmstances. The #a
faith in the present case is even more prononce #ecase petitioners gron staff 
ph!sicall! manhanle the passengers #! shoving them to the line, after another
staff ha inslte them #! trning her #ack on them.

HE#$S OF LEAND$O NAT#6#DAD AND 3*L#ANA 6( NAT#6#DAD 's( 3*ANA

&A*$#ClA=NAT#6#DAD% and SPO*SES 3EAN NAT#6#DAD C$*4 AND 3E$$) C$*4%
($( No( +:,.-.% &arch +.% 12+/
PE$ALTA% 3(

><CTSD

Sergio Nativia mortgage their t=o parcels of lan to PB. He an his
si#ling o=ne the ;irst lan an mortgage it, =hile the secon lan =as registere
in his name an aricia. < Special Po=er of <ttorne! =as isse to Sergio #! his
si#lings allo=ing him to mortgage the sai propert!.

<fter=ars, Sergio nfortnatel! ie an left the e#ts npai. "eanro
fearing that the properties =ill #e foreclose pai the o#ligation. Fhich in trn, the
responents faile to reim#rse "eanro an 0st ver#all! agree that SergioKs share
in the properties =ere to #e assigne in favor of "eanro an %liana.

1
-SSA'D

Fhether or not the ver#al agreement mae #et=een the si#lings an %liana,
covering the shares of Sergio, as pa!ment of his o#ligations is covere #! the Statte
of >ras espite the fact that it has #een partiall! eecteG

H'"D

There is no partial eection of an! contract, =hatsoever, #ecase petitioners

faile to prove, in the ;irst place, that there =as a ver#al agreement that =as entere
into.

'ven granting that sch an agreement eiste, the assignment of the shares of 
Sergio in the s#0ect properties in petitioners favor as pa!ment of Sergios
o#ligation cannot #e enforce if there is no =ritten contract to sch effect. Aner the
Statte of >ras, an agreement to conve! real properties shall #e nenforcea#le #!
action in the a#sence of a =ritten note or memoranm thereof an s#scri#e #!
the part! charge or #! his agent. <s earlier iscsse, the pieces of evience
presente #! petitioners, consisting of responents ackno=legment of Sergios
loan o#ligations =ith BP as em#oie in the 'tra0icial Settlement <mong Heirs,
as =ell as the cash vocher =hich allegel! represents pa!ment for taes an
transfer of title in petitioners name o not serve as =ritten notes or memorana of 
the allege ver#al agreement.

TO&AS P( TAN% 3$( 's( 3OSE ( HOSANA

($( No( +:2,./% Febr0ary -% 12+/
B$#ON% 3(

><CTSD

%ose eecte a Special Po=er of <ttorne! in favor of ilagros. Fithot the

kno=lege of %ose, ilagros then ha the po=er to sell the propert! the! #oght, to
Tan.

%ose after=ars ;ile a Complaint against his =ife for the <nnlment of 
SaleLCancellation of TitleL/econve!ance an amages. He claims that the SP< =as
false an the signatre is forge. He also claims that his =ife colle =ith Tan.

-SSA'D

Fhether or not the voi contract can #e se as the #asis for the amont of 
consieration paiG

12
H'"D

The ee of sale as ocmentar! evience ma! #e se as a means to

ascertain the trthflness of the consieration state an its actal pa!ment. The
prpose of introcing the ee of sale as evience is not to enforce the terms
=ritten in the contract, =hich is an o#ligator! force an effect of a vali contract.
The ee of sale, rather, is se as a means to etermine matters that occrre in
the eection of sch contract, i.e., the etermination of =hat each part! has given
ner the voi contract to allo= restittion an prevent n0st enrichment.

-t is #asic that if a voi contract has alrea! Q#een performe, the restoration
of =hat has #een given is in orer.R This principle springs from <rticle $$ of the Ne=
Civil Coe =hich states that Qever! person =ho throgh an act of performance #!
another, or an! other means, ac@ires or comes into possession of something at the
epense of the latter =ithot 0st or legal gron, shall retrn the same.R Hence, the
restittion of =hat each part! has given is a conse@ence of a voi an ineistent 
contract. Fhile the terms an provisions of a voi contract cannot #e enforce since
it is eeme ineistent, it oes not precle the amissi#ilit! of the contract as
evience to prove matters that occrre in the corse of eecting the contract, i.e.,
=hat each part! has given in the eection of the contract.

Hence, a voi ocment is amissi#le as evience #ecase the prpose of 

introcing it as evience is to ascertain the trth respecting a matter of fact, not to
enforce the terms of the ocment itself.

DES#DE$#O $ANA$A% 3$(% 's( 4ACA$#AS DELOS ANELES% 3$(

($( No( 122</5% A0g0st ,% 12+/
$E)ES% 3(

><CTSD

"eonor Paraa entere into a loan agreement =ith acarias Sr. in the amont 
of P59,999 spport her migration in Canaa. "eonor se as secrit! to the loan the
agricltral lan the! have. -f "eonor fails to pa! the loan, it =as agree that acarias
%r =ill take over the agricltral lan. Fhen Paraa migrate to Canaa she #roght 
=ith her the copies of the ocment an the title of the lan. Fhen she learne
a#ot the illegal settlers =ho attempte to occp! the lan she gave the original
ocment cop! to acaria Sr.

Iears after acaria Sr. #ecame ill an aske his sone acaria %r. to eman
Paraa to reprchase the propert!. Noel Paraa, the son of "eonor gave to acaria Sr.
the pa!ment price of Php 9,999.99, #t he refse to accept the mone!.

15
 /esponent then sent Paraa a letter insisting to enforce the ee of Sale
=ith /ight to /eprchase. Ho=ever, Paraa insiste that there =as no pacto e retro
sale an thereafter tenere an amont of Php 59,999 as pa!ment to the loan. She
s#se@entl! iscovere that the responent ha alrea! registere the propert!
an falsi;ie her af;iavit allo=ing the sale of the propert!.

-SSA'D

Fhether #oth petitioner an responent are at faltG

H'"D

The Cort rle af;irming #oth the ecision of the /TC an C<. <s to the
petitionerKs contention that he is a #!er in goo faith an is entitle for
reim#rsement is not tena#le as it =as his t! to investigate the title of the
propert! he seeks to #! appl!ing the principle of caveat emptor.

The Cort in this case frther rle that petitionerKs argment that #oth him
an responent are in pari elicto is misplace. Hence, he cannot #e consiere as a
#!er in goo faith as he is =ell a=are that the title of the propert! is still in the
name of "eonor Paraa.

-n the case Constantino, et. al. v. Heirs of Pero Constantino, %r. The octrine
of in pari elicto as enshrine in <rticle 111 an <rticle 11$ of the Civil Coe onl!
applies to the rights an o#ligations of parties in a contract =hich has an illegal or
nla=fl case an that =hich constitte a criminal offense. -t speci;icall! applies to
contracts =hich are generall! voi for the illegalit! of the s#0ect matter or o#0ect.
Ths, assming that #oth petitioner an responent are at e@al falt, the! o not 
have an! right to interpose sch claims as there can #e no case of action #et=een
them.

&E$CEDES N( ABELLA% &A( THE$ESA A( BALLESTE$OS and &A$#AN#TO N(

 ABELLA 's( HE#$S OF F$ANC#SCA C( SAN 3*AN namely> L#CE$#A SAN 3*AN
CAP#ST$ANO% BEN#NA SAN 3*AN 6AS?*E4% E6A$#STO SAN 3*AN% N#E6ES SAN
3*AN L*ST$E and &AT#LDE SAN 3*AN ?*#LON#O
($( No( +,1/1:% Febr0ary 1.% 12+/
JARDELEZA, J.

><CTSD

>rancisca San %an =as a tenant of the petitioners in a 5,999 s@are meter
lan in Camarines Sr. The t=o parties mae an agreement after=ars that San %an
=ill transfer the the other 5,999 s@are meters agricltral lan the petitioners o=n
in Naga Cit!.

17
 Fhen >rancisca ie her chilren an granchilren of >rancisca aske the
=ife of r. <#ella if the! col #il their propert! on the other propert! =hich
>ranisca vacate in =hich the =ife approve. <fter=ars the! =ere emane to
leave the premises =hich in trn the! refse claiming o=nership to the lan.
Hence, the case =as ;ile for @ieting of title an proof of o=nership of the lan.

-SSA'D

Fhether the <greement is voi for violating P $7G

H'"D

P $7 provies for onl! t=o eceptions to the prohi#ition on transfer, namel!,

(1) transfer #! hereitar! sccession an ($) transfer to the +overnment.

Ths, =e rle in Siacor v. +igantana an more recentl! in Cali=ag6

CarmonaO v. Cort of <ppeals, that sales or transfers of lans mae in violation of P
$7 an '3 $$8 in favor of persons other than the +overnment #! other legal means
or to the farmers sccessor #! hereitar! sccession are nll an voi. The
prohi#ition even etens to the srrener of the lan to the former lano=ner.

Aner P $7 an the prononcements of this Cort, transfer of lans ner

P $7 other than to sccessors #! hereitar! sccession an the +overnment is
voi. < voi or ineistent contract is one =hich has no force an effect from the
#eginning, as if it has never #een entere into, an =hich cannot #e valiate either
#! time or rati;ication. No form of valiation can make the voi <greement legal

THEL&A $OD$#*E4% @oined by her h0sband 's( SPO*SES 3A#&E S#OSON "
 A$&# S#OSON% et al(
($( No( +::+,2% 30ly 1<% 12+/
$E)ES% 3

><CTSD

Neri elos /e!es o=ns a parcel of lan =ith an area of 1.7 hectares in Bataan.
The mnicipalit! of 3rani Bataan then after prchase the sai lot that =ill #e se
as the mnicipalities p#lic market. The t=o parties agree that after the pa!ment is
mae in fll, Neri =ill srrener the mother title to the mnicipalit!.
"ater on, The petitioner fon ot that a terminal =ill #e #ilt on the lot so
she ;ile for an in0nction against the incm#ent ma!or. To spport her claim, she
presente an nate, nnotari?e ee of sale. Sometime later, Neri sol the same

18
lot to responents. The petitioner ;ile a complaint for the eclaration of Nllit! of 
the secon sale. This time, she presente a signe an notari?e ee of sale.

-SSA'D

Fhether or not the transaction mae #et=een Neri an petitioner /orige?
=as a contract of sale or a contract to sellG

H'"D

-tKs a mere contract to sell. espite the enomination of their agreement as

one of sale, the circmstances ten to sho= that Neri agree to sell the s#0ect 
propert! to Thelma on the conition that title an o=nership =ol pass or #e
transferre pon the fll pa!ment of the prchase price. This is the ver! natre of a
contract to sell, =hich is a M#ilateral contract =here#! the prospective seller, =hile
epressl! reserving the o=nership of the propert! espite eliver! thereof to the
prospective #!er, #ins himself to sell the propert! eclsivel! to the prospective
#!er pon fl;illment of the conition agree pon, i.e., the fll pa!ment of the
prchase price.M -t =as like=ise esta#lishe that Thelma =as not a#le to pa! the fll
prchase price, an that she =as onl! a#le to pa! P$,$*.29 of the agree selling
price of Pl ,$*,999.99. oreover, the allege eliver! of the propert!, even if tre, is
irrelevant consiering that in a contract to sell, o=nership is retaine #! the
registere o=ner in spite of the partial pa!ment of the prchase price an eliver!
of possession of the propert!. Ths, in /o@e v. <gao, the Cort rle that since
the petitioners have not pai the ;inal installment of the prchase price, the
conition =hich =ol have triggere the parties o#ligation to enter into an
there#! perfect a contract of sale cannot #e eeme to have #een fl;illeJ
conse@entl!, the! Mcannot valil! claim o=nership over the s#0ect portion even if 
the! ha mae an initial pa!ment an even took possession of the same.M

OSCA$ S( 6#LLA$TA 's( A*D#OSO TALA6E$A% 3$(

($( No( 12,21+% Febr0ary -% 12+/
CARPIO, J.

><CTSD

:illarta an Talavera =ho are istant relatives entere into a loan contract 
=here in :illarta =ill pa! Talavera * per month if he cannot pa! the loan. Iears
come an the interest rate =as increase into 7 an 19 #ecase of the ;inancial
crisis. Talavera, sing eceptive =ors an means to convince :illarta to eecte a
ee of a#solte sale over one of the parcels of lan that he o=ns an then again
there =ere t=o more ees of conve!ance over the other $ lots o=ne #! him that 
=as sol to Talavera. The last propert! that :illarta o=ne =as forci#l! sol to

1
Talavera =ith an nreasona#le amont =hich =as covere #! a ee of <#solte
Sale.

-SSA'D

Fhether or not there =as an e@ita#le mortgage #et=een the partiesG

H'"D

Fe agree =ith the lo=er cortsK assessment of the facts. The conct of the
parties prior to, ring, an after the eection of the ees of sale ae@atel!
sho=s that petitioner sol to responent the lots in @estion to satisf! his e#ts.

/esponent =as a#le to sf;icientl! eplain =h! the presmption of an

e@ita#le mortgage oes not appl! in the present case. The inae@ac! of the
prchase price in the t=o ees of sale ate 18 a! $991 =as spporte #! an
<f;iavit of Tre Consieration of the <#solte Sale of the Propert!. /esponent i
not tolerate petitionerKs possession of the lots. /esponent case the registration
an s#se@ent transfer of the $ lans ner his name, an pai taes thereon.
There =ere no etensions of time for the pa!ment of petitionerKs loansJ rather,
petitioner offere ifferent moes of pa!ment for his loans. -t =as onl! after three
instances of #once checks that petitioner offere the other t=o lans as pa!ment 
for his loans an eecte ees of sale in responentKs favor.

The transaction #et=een petitioner an responent is ths not an e@ita#le

mortgage, #t is instea a acion en pago.

 ANEC#TA $EO$#O 's( &A$#A C$#SOLOO 6DA( DE C*L#% TH$* HE$

 ATTO$NE)=#N=FACT ALF$EDO C*L# 3$(
($( No( +,255:% 3an0ary 12% 12+/
3A$DELE4A% 3(

><CTSD

aria =as then marrie to <lfreo. Fhen <lfreo =as still alive he =as
a=are a patent in a homestea then he ie =ithot a =ill <lfreo ie an the
lan =as <necita an her spose =hich in trn =as grante a title in their favor.

aria then ;ile a complaint after ;ive !ears of sale, alleging she =as onl!
=ithin her right to reprchase the lan ner the P#lic "an <ct. <necita contere
the claim alleging that aria is in #a faith in ;iling the complaint an that she 0st 
=ants to sell the hose for a higher price.

$9
 The /TC rle against aria #ecase for reemption to sccee there mst 
#e a vali consignation of the reprchase price if <necita i not accept the tener of 
pa!ment.

Ho=ever on appeal the C< reverse the rling of the /TC stating that tener
of pa!ment is sf;icient to have a right to reprchase the lan an that consignation
is not an element for reprchase.

-SSA'D

Fhether tener of pa!ment is a re@isite for the vali eercise of 

reemptionG

H'"D

Section 11 of the P#lic "an <ct proviesD Sec.11. Q'ver! conve!ance of 
lan ac@ire ner the free patent or homestea provisions, =hen proper, shall #e
s#0ect to reprchase #! the applicant, his =io=, or legal heirs, =ithin a perio of 
;ive !ears from the ate of the conve!ance.

-t is nispte, in fact, the parties alrea! stiplate, that the complaint for
reprchase =as ;ile =ithin the reglementar! perio of ;ive !ears. The parties also
agree that there =as no consignment of the reprchase price. Ho=ever, petitioner
arges that consignment is necessar! to valil! eercise the right of reemption. The
argment fails. -n Hlgan?a v. Cort of <ppeals, =e hel that the #ona ;ie tener of 
the reemption price or its e@ivalentUconsignation of sai price in cort is not 
essential or necessar! =here the ;iling of the action itself is e@ivalent to a formal
offer to reeem. <s eplaine in the sai case, QThe formal offer to reeem,
accompanie #! a #ona ;ie tener of the reemption price, =ithin the perio of 
reemption prescri#e #! la=, is onl! essential to preserve the right of reemption
for ftre enforcement #e!on sch perio of reemption an =ithin the perio
prescri#e for the action #! the statte of limitations. Fhere, as in the instant case,
the right to reeem is eercise thr the ;iling of 0icial action =ithin the perio of 
reemption prescri#e #! the la=, the formal offer to reeem, accompanie #! a
#ona ;ie tener of the reemption price, might #e proper, #t is not essential. The
;iling of the action itself, =ithin the perio of reemption, is e@ivalent to a formal
offer to reeem. R

Fe also o not agree =ith petitionerKs insistence that <rticle 1515 of the Civil
Coe applies in this case. <s fon #! the C<, the provision onl! speaks of the
amont to #e tenere =hen eercising the right to reprchase, #t it oes not state
the procere to #e follo=e in eercising the right. -n fact, in Peralta v. <lipio, =e
re0ecte the argment that the provisions on conventional reemption appl! as
spplementar! la= to the P#lic "an <ct, an clari;ie thatD

$1
. The P#lic "an "a= oes not ;i the form an manner in =hich reconve!ance
ma! #e enforce, nor prescri#e the metho an manner in =hich eman therefor
shol #e maeJ an! act =hich shol amont to a eman for reconve!ance shol,
therefore, #e sf;icient. (Anerscoring spplie.)

-n "ee v. Cort of <ppeals, the case cite #! petitioner, =e hel that the mere
sening of letters epressing the esire to reprchase is not sf;icient to eercise the
right of reemption. -n the sai case, the original o=ners of a homestea lot soght 
to compel the #!ers to resell the propert! to them #! =riting eman letters =ithin
the ;ive6!ear perio. The latter refse, #t the former ;ile a case for reemption
after the lapse of the ;ive!ear perio. Fe rle that the letters i not preserve the
former o=nersK right to reeem. The case ;ins no application in this case #ecase
=hile responent also sent letters to the petitioner, she also ;ile a complaint for
reprchase =ithin the ;ive6!ear perio. <s rle in Hlgan?a, the ;iling of the
complaint is the formal offer to reeem recogni?e #! la=.

Petitioner claims that even if the reemption is timel! mae, responent is

not entitle to the right of reprchase #ecase responent intens to resell the
propert! again for pro;it, an that her Qaim in reeeming the lan is prel! for
speclation an pro;it.R To spport her claim, petitioner states that responent an
her heirs are professionals an her si#lings are resiing in Canaa.

-nee, the main prpose in the grant of a free patent or homestea is to

preserve an keep in the famil! of the homesteaer that portion of p#lic lan =hich
the State has given to him so he ma! have a place to live =ith his famil! an #ecome
a happ! citi?en an a sefl mem#er of the societ!. Fe have rle in several
instances, that the right to reprchase of a patentee shol fail if the prpose =as
onl! speclative an for pro;it, or Qto ispose of it again for greater pro;itR or Qto
recover the lan onl! to ispose of it again to amass a heft! pro;it to themselves.R -n
all these instances, =e fon #asis for rling that there =as intent to sell the
propert! for a higher pro;it. Fe ;in no sch prpose in this case.

&ELEC#O DO&#NO 's( SPO*SES ENA$O &OL#NA and ELENA B( &OL#NA%

s0bstit0ted by ESTE$ &OL#NA
($( No( 1221<.% April 12% 12+/
B$#ON% 3

><CTSD

Sposes <nastacio an >lora omingo entere into a contract of loan =ith
sposes olina. The! mae as secrit! the propert! the! o=ne consisting of a V
nivie portion over an 18,15 s@. meter lan. Fhich in trn the! transferre the
interest to olina

$$
 elecio, one of the chilren of <nastacio an >lora, learne of the transfer
an ;ile a Complaint for <nnlment of Title an /ecover! of 3=nership against the
sposes olina. He allege that the transfer of interest =as invali #ecase her
mother =as alrea! ea =hen the sale transpire. Therefore there =as no consent.

-SSA'D

Fhether or not the sale of a con0gal propert! to the sposes olina is valiG

H'"D

<nastacio, as a co6o=ner, ha the right to freel! sell an ispose of his
nivie interest, #t not the interest of his co6o=ners. Conse@entl!, <nastactioKs
sale to the sposes olina =ithot the consent of the other co6o=ners =as not 
totall! voi, for <nastacioKs rights or a portion thereof =ere there#! effectivel!
transferre, making the sposes olina a co6o=ner of the s#0ect propert! to the
etent of <nastacioKs interest. This reslt conforms =ith the =ell6esta#lishe
principle that the #ining force of a contract mst #e recogni?e as far as it is legall!
possi#le to o so (@ano res non valet t ago, valeat @antm valere potest).

The sposes olina =ol #e a trstee for the #ene;it of the co6heirs of 
<nastacio in respect of an! portion that might #elong to the co6heirs after
li@iation an partition. The o#servations of %stice Paras cite in the case ofHeirs
of Protacio +o, Sr. :. Servacio are instrctiveD

   -Of it trns ot that the propert! alienate or mortgage reall! =ol
pertain to the share of the srviving spose, then sai transaction is vali. -f it trns
ot that there reall! =ol #e, after li@iation, no more con0gal assets then the
=hole transaction is nll an voi. Bt if it trns ot that half of the propert! ths
alienate or mortgage #elongs to the hs#an as his share in the con0gal
partnership, an half shol go to the estate of the =ife, then that corresponing to
the hs#an is vali, an that corresponing to the other is not. Since all these can
#e etermine onl! at the time the li@iation is over, it follo=s logicall! that a
isposal mae #! the srviving spose is not voi a# initio. Ths, it has #een hel
that the sale of con0gal properties cannot #e mae #! the srviving spose =ithot 
the legal re@irements. The sale is voi as to the share of the ecease spose
(ecept of corse as to that portion of the hs#anKs share inherite #! her as the
srviving spose). The #!ers of the propert! that col not #e valil! sol #ecome
trstees of sai portion for the #ene;it of the hs#anKs other heirs, the cesti @e
trst ent. Sai heirs shall not #e #arre #! prescription or #! laches.

E?*#TABLE SA6#NS BAN!% 's $OSAL#NDA C( PALCES

($( No( 1+.<51% &arch :% 12+/

$*
B$#ON% 3
><CTSD

-n the !ear of $992, Palces prchase a van throgh a loan a=are #!

'@ita#le Savings Bank. The loan =as secre #! a promissor! note an a Chattel
ortgage.

<fter=ars, Palces faile to pa! t=o monthl! installments, =hich effecte the
acceleration clase of the loan agreement. Palces asserte that she i not fail to
pa! the installments.

-SSA'D

Fhether there is a venor6venee relationship #et=een the petitioner an

the responentG

H'"D

-n this case, there =as no venor6venee relationship #et=een responent 

an petitioner. < 0icios persal of the recors =ol reveal that responent 
never #oght the s#0ect vehicle from petitioner #t from a *r part!, an merel!
soght ;inancing from petitioner for its fll prchase price. -n orer to ocment the
loan transaction #et=een petitioner an responent, a Promissor! Note =ith Chattel
ortgage =as eecte =herein, inter alia, responent ackno=lege her
ine#teness to petitioner in the amont of P1,15,199.99 an place the s#0ect 
vehicle as a secrit! for the loan. -n#ita#l!, a loan contract =ith the accessor!
chattel mortgage contract  an not a contract of sale of personal propert! in
installments  =as entere into #! the parties =ith responent staning as e#tor6
mortgagor an petitioner as the creitor6mortgagee. Therefore, the conclsion of 
the C< that <rticle 18 ;ins application in this case is misplace, an ths, mst #e
set asie

HE#$S OF A&AL#EL ALBANO 's( SPS( $OBE$TO and &ENA $A6ANES

($( No( +,-/.5% 30ly 12% 12+/
3A$DELE4A% 3(

Spose /avanes are the registere o=ner of a parcel of lan in =hich the
petitioners has #ilt a t=o6store! hose an lease the lan =ith the agreement that 
the! =ill vacate the propert! once the responent eman to. /esponents then
re@este for them to vacate the premises #ecase their aghter =ill #il a hose

$
on it. The petitioners oes not =ant to leave the premises arging that the! ha a
vali contract =ith /o#erto.

-SSA'D

Fhether the lease contract entere into #! petitioner /o#erto =as vali an =ol
sta! the eection of the 0gmentG

H'"D

No it =as not. To or min, instea of a spervening event, the eection of 
the lease contract partakes of the natre of a compromise. < compromise is a
contract =here#! the parties, #! making reciprocal concessions, avoi litigation or
pt an en to one alrea! commence. Anfortnatel! for petitioners, the
compromise that the! effecte is =anting of one of the essential re@isites of a vali
an #ining compromise66consent of all the parties in the case. -t is nispte that 
onl! /o#erto entere into a lease contract =ith petitioners. ena i not sign it, #t 
on the contrar!, enonces its eection as #eing one in evient #a faith an
=ithot athorit! from her as the sole o=ner of the propert!. Consiering that ena
i not participate in the eection of the lease contract, the compromise is not 
#ining on her. -n aition, the compromise is also not vali even #et=een
petitioners an /o#erto #ecase the recors sho= that the lan in @estion is
inee a paraphernal prope1i! of ena. Fithot an athori?ation sho=ing that 
/o#erto is acting on #ehalf of ena, he has no right an po=er to enter into a lease
contract involving enas eclsive propert!. Besies, even assming that the
propert! is con0gall! o=ne #! responent6sposes, this oes not #esto= pon
/o#erto the po=er to enter into a lease contract =ithot the consent of his =ife. Fe
have eplaine in /oas v. Cort of <ppeals, that consent of the =ife is re@ire for
lease of a con0gal realt! for a perio of more than one !ear, sch lease #eing
consiere a conve!ance an encm#rance ner the provisions of the Civil Coe.

D$A( &E$CEDES OL#6E$ 's( PH#L#PP#NE SA6#NS BAN! " L#L#A CAST$O
($( No( 1+.5/<% April .% 12+/
&endoa% 3(

><CTSD

Castro convince 3liver to loan ot her 1$ illion Peso eposit in PS#ank as
#rige ;inancing for the approve loans of #ank #orro=ers. The loan =ol then
charge  a month from the loan procees as #rige interest an in trn, Castro
=ol earn a commission of 19 from sch interest.

$2
 Becase of the great retrns of the transaction 3liver =as persae #!
Castro to o#tain a creit line =orth 19 illion pesos that =as secre #! a real
estate mortgage. The petitioner fon ot that Castro i not pa! the #alances of the
loan as instrcte #! him an that there =ere fralent transactions. The
petitioner sa= the ;inal eman letter sent to her.

-SSA'D

Fhether or not a contract of agenc! eists #et=een 3liver an CastroG

H'"D

-n this case, 3liver an Castro ha a #siness agreement =herein 3liver
=ol o#tain loans from the #ank, throgh the help of Castro as its #ranch managerJ
an after ac@iring the loan procees, Castro =ol len the ac@ire amont to
prospective #orro=ers =ho =ere =aiting for the actal release of their loan
procees. 3liver =ol gain  to 2 interest per month from the loan procees of 
her #orro=ers, =hile Castro =ol earn a commission of 19 from the interests.
Clearl!, an agenc! =as forme #ecase Castro #on herself to rener some service
in representation or on #ehalf of 3liver, in the frtherance of their #siness prsit.

< contract of agenc! ma! #e inferre from all the ealings #et=een 3liver
an Castro. <genc! can #e epress or implie from the acts of the principal, from his
silence or lack of action, or his failre to repiate the agenc! kno=ing that another
person is acting on his #ehalf =ithot athorit!. The @estion of =hether an agenc!
has #een create is orinaril! a @estion =hich ma! #e esta#lishe in the same =a!
as an! other fact, either #! irect or circmstantial evience. The @estion is
ltimatel! one of intention.

<ccoringl!, the la=s on agenc! appl! to their relationship. <rticle 1881 of the Ne=
Civil Coe provies that the agent mst act =ithin the scope of his athorit!. He ma!
o sch acts as ma! #e concive to the accomplishment of the prpose of the
agenc!. Ths, as long as the agent acts =ithin the scope of the athorit! given #! his
principal, the actions of the former shall #in the latter.

&ACTAN=CEB* #NTE$NAT#ONAL A#$PO$T A*THO$#T) 's( $#CHA$D E(

*NCH*AN
($( No( +,15-<% 30ne +% 12+/
&ENDO4A% 3(

><CTSD

$5
 /esponent claims he is the rightfl o=ner of the t=o parcels of lan =hich
he #oght from the heirs of one 'genio +oine? =hich it trne ot that the lot =as
sol #! <tanacio +oine?, the attorne!6in fact to the C<<, =hich is the preecessor
of C-<<. He also claims that there =as no vali special po=er of attorne! eecte
in favor of the heirs.
Therefore, responent pra!s for the nllit! of the a#solte sale against 
C-<<
-SSA'D

Fhether the sale #et=een <natacio an C-<< is valiG

H'"D

The Cort ;ins that the sale transaction eecte #et=een <tanacio, acting
as an agent of his fello= registere o=ners, an the C<< =as inee voi insofar as
the other registere o=ners =ere concerne. The! =ere represente =ithot a
=ritten athorit! from them clearl! in violation of the re@irement ner <rticles
187 an 1878 of the Civil Coe, =hich provieD

<rt. 187. Fhen a sale of a piece of lan or an! interest therein is throgh an agent,
the athorit! of the latter shall #e in =ritingJ other=ise, the sale shall #e voi.

<rt. 1878. Special po=ers of attorne! are necessar! in the follo=ing casesD



(2) To enter into an! contract #! =hich the o=nership of an immova#le is

transmitte or ac@ire either gratitosl! or for a vala#le consierationJ


The signi;icance of re@iring the athorit! of an agent to #e pt into =riting
=as ampli;ie in i?on v. Cort of <ppealsD

Fhen the sale of a piece of lan or an! interest thereon is throgh an agent,
the athorit! of the latter shall #e in =ritingJ other=ise, the sale shall #e voi. Ths
the athorit! of an agent to eecte a contract for the sale of real estate mst #e
conferre in =riting an mst give him speci;ic athorit!, either to conct the
general #siness of the principal or to eecte a #ining contract containing terms
an conitions =hich are in the contract he i eecte. < special po=er of attorne!
is necessar! to enter into an! contract #! =hich the o=nership of an immova#le is
transmitte or ac@ire either gratitosl! or for a vala#le consieration. The
epress manate re@ire #! la= to ena#le an appointee of an agenc! (coche) in
general terms to sell mst #e one that epressl! mentions a sale or that incles a
sale as a necessar! ingreient of the act mentione. >or the principal to confer the
right pon an agent to sell real estate, a po=er of attorne! mst so epress the

$7
po=ers of the agent in clear an nmistaka#le langage. Fhen there is an!
reasona#le o#t that the langage so se conve!s sch po=er, no sch
constrction shall #e given the ocment.

Fithot a special po=er of attorne! specif!ing his athorit! to ispose of an

immova#le, <tanacio col not #e legall! consiere as the representative of the
other registere co6o=ners of the properties in @estion. <tanacios act of conve!ing
"ot No. 8196< an "ot No. 8196B cannot #e a vali sorce of o#ligation to #in all
the other registere co6o=ners an their heirs #ecase he =as not clothe =ith an!
athorit! to enter into a contract =ith C<<. The other heirs col not have given
their consent as re@ire ner <rticle 172 of the Ne= Civil Coe #ecase there
=as no meeting of the mins among the other registere co6o=ners =ho gave no
=ritten athorit! to <tanacio to transact on their #ehalf. Therefore, no contract =as
perfecte insofar as the portions or shares of the other registere co6o=ners or their
heirs =ere concerne.

Ths, the Cort cannot give an! =eight either to the ee of Partition of "ot 
No. 819, 3pen Caastre (s#se@entl! eecte #! all the heirs of <m#rosio an
Sotera +oine? to the effect that the! ha ackno=lege the sale of the s#0ect lots
in favor of C<<) or to other ocments (sch as %oint <f;iavit of Con;irmation of 
Sale of <llote Shares <lrea! <0icate an itclaim of a Portion of "ot No.
819, 3pen Caastre) all of =hich gave the impression that the! ha rati;ie the sale
of the s#0ect lots in favor of C<<, C-<<s preecessor6in6interest.

The rle is that a voi contract proces no effect either against or in favor of 
an!one an cannot #e rati;ie. Similarl!, laches =ill not set in against a voi
transaction, as in this case, =here the agent i not have a special po=er of attorne!
to ispose of the lots co6o=ne #! the other registere o=ners. -n fact, <rticle 119
of the Civil Coe speci;icall! provies that an action to eclare the ineistence of a
voi contract oes not prescri#e.

The transaction entere into #! <tanacio an C<<, ho=ever, =as not entirel!
voi #ecase the lack of consent #! the other co6o=ners in the sale =as =ith respect 
to their shares onl!. <rticle * of the Ne= Civil Coe epressl! proviesD

<rt. *. 'ach co6o=ner shall have the fll o=nership of his part an the
frits an #ene;its pertaining thereto, an he ma! therefore alienate, assign or
mortgage it, an even s#stitte another person in its en0o!ment, ecept =hen
personal rights are involve. Bt the effect of the alienation or the mortgage, =ith
respect to the co6o=ners, shall #e limite to the portion =hich ma! #e allotte to
him in the ivision pon the termination of the co6o=nership.
The @ote provision recogni?es the a#solte right of a co6o=ner to freel!
ispose of his pro inivisoshare as =ell as the frits an other #ene;its arising from
that share, inepenentl! of the other co6o=ners. The sale of the s#0ect lots affects
onl! the sellers share pro iniviso, an the transferee gets onl! =hat correspons to

$8
his grantors share in the partition of the propert! o=ne in common. Since a co6
o=ner is entitle to sell his nivie share, a sale of the entire propert! #! one co6
o=ner =ithot the consent of the other co6o=ners is not nll an voiJ onl! the
rights of the co6o=nerLseller are transferre, there#! making the #!er a co6o=ner
of the propert!.

-n the case at #ench, althogh the sale transaction insofar as the other heirs
of the registere o=ners =as voi, the sale insofar as the etent of <tanacios
interest is concerne, remains vali. <tanacio =as one of the registere co6o=ners of 
the s#0ect lots, #t he =as not clothe =ith athorit! to transact for the other co6
o=ners. B! signing the ee of sale =ith the C<<, <tanacio effectivel! sol his
nivie share in the lots in @estion. Ths, C<< #ecame a co6o=ner of the
nivie s#0ect lots. <ccoringl!, <tanacios heirs col no longer alienate
an!thing in favor of Anchan #ecase he alrea! conve!e his pro iniviso share to
C<<.

&#CHAEL C( *) 's( ATT)( LENN C( ACOTT

($( No( 12/+.<% 3an0ary +-% 12+/
&ENDO4A% 3(

><CTSD

/esponent #oght t=o #ran ne= transrecievers from antech S!stems

Corporation in anila. The materials after testing it ot =ere in fact efective that is
=h! the responent retrne them an aske for replacements.

<fter=ars, antech faile to replace the items an the price pai #! the
responent. Hence, the complaint for amagaes. Fhile the case =as pening, it 
trne ot that antech =as not a corporation #t a +eneral Partnership an the
petitioner =as the +eneral anager.

 -SSA'D

Fhether or not the +eneral anager is soliaril! lia#le =ith the partnershipG

H'"D

PartnersK lia#ilit! is s#siiar! an generall! 0ointJ immeiate lev! pon the
propert! of a partner cannot #e mae.

+ranting that +! =as properl! impleae in the complaint, the eection of 
0gment =ol #e improper. <rticle 1815 of the Civil Coe governs the lia#ilit! of 
the partners to thir persons, =hich states thatD

$
<rticle 1815. <ll partners, incling instrial ones, shall #e lia#le pro rata =ith all
their propert! an after all the partnership assets have #een ehaste, for the
contracts =hich ma! #e entere into in the name an for the accont of the
partnership, ner its signatre an #! a person athori?e to act for the
partnership. Ho=ever, an! partner ma! enter into a separate o#ligation to perform a
partnership contract.
-n this case, ha he #een properl! impleae, +!Ks lia#ilit! =ol onl! arise
after the properties of SC =ol have #een ehaste. The recors, ho=ever,
misera#l! faile to sho= that the partnershipKs properties =ere ehaste. The
report of the sheriff sho=e that the latter =ent to the main of;ice of the 3TC6"T3
in e?on Cit! an veri;ie =hether eestomas, SC an +! ha personal
properties registere therein. +acott then instrcte the sheriff to procee =ith the
attachment of one of the motor vehicles of +!. The sheriff then serve the Notice of 
<ttachmentL"ev! pon Personalt! to the recor cstoian of the 3TC6"T3 of 
anal!ong Cit!. < similar notice =as serve to +! throgh his hosemai at his
resience.
Clearl!, no genine efforts =ere mae to locate the properties of SC that 
col have #een attache to satisf! the 0gment W contrar! to the clear manate of 
<rticle 1815. Being s#siiaril! lia#le, +! col onl! #e hel personall! lia#le if 
properl! impleae an after all partnership assets ha #een ehaste.
Secon, <rticle 1815 provies that the partnersK o#ligation to thir persons =ith
respect to the partnership lia#ilit! is pro rata or 0oint.1aX =phi1 "ia#ilit! is 0oint =hen
a e#tor is lia#le onl! for the pa!ment of onl! a proportionate part of the e#t. -n
contrast, a soliar! lia#ilit! makes a e#tor lia#le for the pa!ment of the entire e#t.
-n the same vein, <rticle 1$97 oes not presme soliar! lia#ilit! nlessD 1) the
o#ligation epressl! so statesJ or $) the la= or natre re@ires soliarit!. Fith
regar to partnerships, orinaril!, the lia#ilit! of the partners is not soliar!. The
0oint lia#ilit! of the partners is a efense that can #e raise #! a partner impleae
in a complaint against the partnership.
-n other =ors, onl! in eceptional circmstances shall the partnersK lia#ilit! #e
soliar! in natre. <rticles 18$$, 18$* an 18$ of the Civil Coe provie for these
eceptional conitions, to =itD
<rticle 18$$. Fhere, #! an! =rongfl act or omission of an! partner acting in the
orinar! corse of the #siness of the partnership or =ith the athorit! of his co6
partners, loss or in0r! is case to an! person, not #eing a partner in the
partnership, or an! penalt! is incrre, the partnership is lia#le therefor to the same
etent as the partner so acting or omitting to act.
<rticle 18$*. The partnership is #on to make goo the lossD
(1) Fhere one partner acting =ithin the scope of his apparent athorit! receives
mone! or propert! of a thir person an misapplies itJ an
($) Fhere the partnership in the corse of its #siness receives mone! or propert!
of a thir person an the mone! or propert! so receive is misapplie #! an!
partner =hile it is in the csto! of the partnership.
<rticle 18$. <ll partners are lia#le soliaril! =ith the partnership for
ever!thing chargea#le to the partnership ner <rticles 18$$ an 18$*.

*9
-n essence, these provisions articlate that it is the act of a partner =hich case
loss or in0r! to a thir person that makes all other partners soliaril! lia#le =ith
the partnership #ecase of the =ors Man! =rongfl act or omission of an! partner
acting in the orinar! corse of the #siness,M Mone partner acting =ithin the scope
of his apparent athorit!M an Mmisapplie #! an! partner =hile it is in the csto!
of the partnership.M The o#ligation is soliar! #ecase the la= protects the thir
person, =ho in goo faith relie pon the athorit! of a partner, =hether sch
athorit! is real or apparent.

-n the case at #ench, it =as not sho=n that +! or the other partners i a
=rongfl act or misapplie the mone! or propert! he or the partnership receive
from +acott. < thir person =ho transacte =ith sai partnership can hol the
partners soliaril! lia#le for the =hole o#ligation if the case of the thir person falls
ner <rticles 18$$ or 18$*. +acottKs claim stemme from the allege efective
transreceivers he #oght from SC, throgh the latters emplo!ee, eestomas. -t 
=as for a #reach of =arrant! in a contractal o#ligation entere into in the name
an for the accont of SC, not e to the acts of an! of the partners. >or sai reason,
it is the general rle ner <rticle 1815 that governs the 0oint lia#ilit! of sch
#reach, an not the eceptions ner <rticles 18$$ to 18$. Ths, it =as improper
to hol +! soliaril! lia#le for the o#ligation of the partnership.

TA$C#S#O S( CAL#L*N 's( PA$A&O*NT #NS*$ANCE et( al(

($( No( +:5/.+% 30ly ++% 12+/
BE$SA&#N% 3

><CTSD
Petitioner =as an intereste #!er of the shares of stock of /P Technical
Services, -nc. (/PTS-). He commnicate this intention to Pn?alan, the presient of 
the corporation. Ho=ever, the irectors an stockholers =as not in agreement of 
the proposal presente #! the petitioner #ecase it =ill reslt to a total control of 
the corporation #! the petitioner. He =as onl! allo=e to #! a limite amont of 
shares an its remaining #alance =ol #e se to ;inance a pro0ect that =as #eing
nertaken #! /PTS-. Petitioner =as isse a promissor! note garantee #! a
sret! #on #! the responent corporation.

Anfortnatel!, the promissor! note #ecame e an /PTS- faile to pa! the
amont of the promissor! note. Hence, the petitioner ;ile a complaint for sm of 
mone! against /PTS- an Paramont. The /TC rle in favor of the petitioner an
orere responent to pa! the o#ligation. The Spreme Cort af;irme the ecision
of he lo=er cort The petitioner after=ars ;ile a motion for eection at the /TC
an claime to The petitioner then ;ile a motion for eection at the /TC, an
claime entitlement to also collect the compon interest.

-SSA'D

*1
 Fhether or not the o#ligation earne a compon interest.

H'"D

The onl! interest to #e collecte from the responents is the 1 per annm
on the principal o#ligation of 718,729.99 reckone from 3cto#er 7, 187 ntil fll
pa!ment. There =as no #asis for the petitioner to claim compone interest 
prsant to <rticle $$1$ of the Civil Coe consiering that the 0gment i not 
incle sch o#ligation. <s sch, neither the /TC nor an! other cort, incling this
Cort, col appl! <rticle $$1$ of the Civil Coe #ecase oing so =ol infringe the
immta#ilit! of the 0gment. :eril!, the eection mst conform to, an not var!
from, the ecree in the ;inal an immta#le 0gment. -t is cogent to o#serve that 
ner the epress terms of the 0gment, the responents o#ligation to pa! the
interest per annm =as 0oint an several. This meant that the responents =ere in
passive soliarit! in relation to the petitioner as their creitor, ena#ling him to
compel either or #oth of them to pa! the entire o#ligation to him. State ifferentl!,
each of the responents =as a e#tor of the =hole as to the petitioner, #t each
responent, as to the other, =as onl! a e#tor of a part.

SPS( 3*AN CH*) TAN and &A$) TAN s0bstit0ted by their s0r'i'ing heirs% 3OEL
TAN and E$#C TAN% 's(CH#NA BAN!#N CO$PO$AT##ON
($( No( 1221::% April +,% 12+/
PE$E4% 3(

><CTSD

Petitioner secre several loans #! covere #! promissor! notes from

responent on 17. -t containe that if the petitioner efalts in pa!ment there
=ill #e an aitional 1 interest per a! of the total amont of o#ligation pto the
time the o#ligation is fll! pai. < real estate mortgage =as evience as secrit! to
the pa!ment of loan. <fter=ars, the petitioner faile to pa! the o#ligation, =hich
reslte to the foreclosre of the real estate mortgage eecte.

/esponent #ank then move the properties sol #! =a! of action after e
notice an p#lication. China Bank =as the highest #ier in the action an
therefore ac@ire the propert!. Ho=ever, the propert! =as not enogh to satisf!
the loan o#ligation of the petitioner. The responent #ank emane for the
remaining #alance to the petitioner #t there =as no compliance or
ackno=legement.

The trial cort orere the petitioner to pa! for the remaining #alance. Bt 
the petitioner arge that the propert! that =as ac@ire throgh action #! the
#ank =as alrea! enogh to satisf! the loan o#ligation. Hence the petition.

*$
-SSA'D

Fhether or not the foreclose properties are enogh to settle the o#ligationG

H'"D

The Cort anchore its ecision in favor of responent follo=ing the

provisions on pa!ment of e#ts ner the Civil Coe, particlarl! <rticles 1$2$ an
1$2*. -n this case, petitioner has the option to appl! the amont of sale of its
foreclose real properties. Ho=ever, petitioner is silent on the application of the sale
of its real properties =hich gave responent the right to elect or choose =here the
procees of the sale shol #e applie. S#se@entl!, responent chose to appl! the
procees to cover the incrre penalties an interest incrre #! petitioner on its
loan o#ligation. Conse@entl!, petitioner having the =rong assmption, thoght that 
the total amont of the sale of its real properties #! responent fll! covere its
ine#teness. <ppl!ing <rticle 1$2$ of the Civil Coe, if the e#tor =ho has ifferent 
kins of e#ts to one creitor faile to give preference on the application of its
pa!ment, the right to choose to =hich the same ma! #e applie passes on to the
creitor. Fhile <rticle 1$2* pertains to e#ts having incrre interests, petitioner is
on the =rong assmption that the sale of its real properties covere #oth interest 
an the principal of its e#t.

/esponent, having the right to choose the application of the sale of the real
properties it foreclose ;irst to choose the pa!ment of the interest an srcharges of 
the principal e#t. Hence, appl!ing <rticle 1$2*, the principal e#t is not eeme
settle =ithot ;irst covering the interest incrre. <s to this case, onl! the interest 
of the e#t =ere covere #! the total amont of sale of petitionerKs real properties.
Hence, the o#ligation of petitioner to responent has not #een fll! etingishe as
it still has the performance to pa! the remaining #alance.

TECHNO DE6ELOP&ENT " CHE&#CAL CO$PO$AT#ON 's( 6#!#N &ETAL

#ND*ST$#ES% #NCO$PO$ATED
($( No( 12-+<:% 30ly .% 12+/
PE$ALTA% 3(

><CTSD

/esponent #i a proposal to sppl! varios fa#ricate items to PN3C6'C

for its ;irst 9 F inanao6+eothermal pro0ect. <fter the pro0ect =as a=are to
the responent, the! met =ith the petitioner, =ho manfactres an anti6rst primer

**
calle Altra?inc Primer. The petitioner spplie the primer an the necessar!
personnel to spervise the application on the fa#ricate items. The fa#ricate items
in trn =ere spplie to PN3C6'C. Ho=ever, the fa#ricate items #egn eveloping
rst. /esponent then emane for the pll6ot of the items in the epense of the
petitioner. Then, PN3C6'C prompte the responent to ;inish the pro0ect as
schele an if ela! =ill #e incrre the! =ill #e lia#le.
Becase of the ela! the contract price =as ecrease #! PN3C6'C.
Therefore, responent claims for sm of mone! an amages against PN3C6'C for
the remaining #alance of the contract price, an against the petitioner for the allege
repairs one on the amage fa#ricate items.

-SSA'D

Fhether or not petitioner is entitle to eemplar! amages an attorne!Ks feesG

H'"D

No, it is not. <rticle $$* of the Civil Coe of the Philippines re@ires a part!
to ;irst prove that he is entitle to moral, temperate or compensator! amages
#efore he can #e a=are eemplar! amages. oreover, <rticle $$$9 of the same
Coe provies that in #reaches of contract, moral amages ma! #e a=are =hen
the part! at falt acte fralentl! or in #a faith. Ths, to 0stif! an a=ar for
eemplar! amages, the =rongfl act mst #e accompanie #! #a faith, an an
a=ar of amages =ol #e allo=e onl! if the gilt! part! acte in a =anton,
fralent, reckless or malevolent manner. -n the instant case, there is no sho=ing
that :- faile to pa! for its prchase paint procts fralentl! or in #a faith.
The Cort, therefore, oes not ;in Techno to #e entitle to eemplar! amages.
<s to Technos claim for the a=ar of attorne!s fees in the amont of 
P$99,999.99, as =ell as an honorarim of P2,999.99 per appearance, the Cort ;ins
sai amonts to #e inconsistent =ith the stiplation on the eliver! /eceipts an
-nvoices s#mitte #! Techno =hich provies that Mthe #!er agrees to pa!    in
case of an action is ;ile in Cort, an aitional T=ent!6>ive ($2) Per Cent of the
total amont of the o#ligation e an emana#le, in the natre of attorne!s fees.M
Ths, instea of the P$99,999.99 attorne!s fees, as =ell as the P2,999.99
honorarim per appearance, the a=ar of attorne!s fees mst #e compte on the
#asis of sai stiplation, =hich provies for a t=ent!6;ive percent ($2) charge on
the total amont e to petitioner Techno.

SPS( &A&E$TO and ADEL#A T#&ADO 's( $*$AL BAN! OF SAN 3OSE et( al(
($( No( 12+.-/% 30ly ++% 12+/
B$#ON% 3(

><CTSD

*
 Petitioners eecte a real estate mortgage over a parcel of lan an a chattel
mortgae over a rice mill machiner! an a iesel engine as secrit! to a loan from
/ral Bank of San %ose.

<fter the petitioners faile to pa! the o#ligation, the #ank informe them that 
it =ill foreclose the mortgages. Then the petitioners ;ile for the reformation of 
instrments an pra!e for a T/3 an amages. No =rit =as isse #! the cort 
therefore the #ank contine =ith the etra 0icial foreclosre of the properties
an the! =ere the highest #ier at the p#lic action. The title =as consoliate in
favor of the #ank e to the failre of the petitioners to reeem the propert! =ithin
one !ear.

-SSA'D

Fhether or not the petitioners are entitle for amagesG

H'"D

'emplar! or corrective amages are impose #! =a! of eample or

correction for the p#lic goo, in aition to moral, temperate, li@iate, or
compensator! amages. The a=ar of eemplar! amages is allo=e #! la= as a
=arning to the p#lic an as a eterrent against the repetition of sociall! eleterios
actions. The re@irements for an a=ar of eemplar! amages to #e proper are as
follo=sD >irst, the! ma! #e impose #! =a! of eample or correction onl! in
aition, among others, to compensator! amages, an cannot #e recovere as a
matter of right, their etermination epening pon the amont of compensator!
amages that ma! #e a=are to the claimant. Secon, the claimant mst ;irst 
esta#lish his right to moral, temperate, li@iate, or compensator! amages. <n
thir, the =rongfl act mst #e accompanie #! #a faithJ an the a=ar =ol #e
allo=e onl! if the gilt! part! acte in a =ante, fralent, reckless, oppressive, or
malevolent manner. -n the light of the appellate cortKs ;ining that the responents
are not entitle to moral amages, the a=ar of eemplar! amages, too, mst #e
elete for lack of legal #asis.

 ANNA &A$#E L( *&ABON 's( PH#L#PP#NE NAT#ONAL BAN!

($( No( 1215+.% 30ly 15% 12+/
B$##ON% 3(

><CTSD

<nna arie +ma#on has eight savings acconts =ith her mother an
si#lings =ith responent PNB. The petitioner calle Salvoro, the emplo!ee of PNB
=ho hanle their acconts, an re@este for its consoliation. Fhen +ma#on

*2
=ent to the #ank to =ithra= the mone!, she =as enie access #ecase her recors
=ere missing an Salvoro =as no=here to #e fon. <fter=ars, PNB resolve the
isse an consoliate the acconts an isse a pass#ook. Petitioner then ;ile for
amages.

-SSA'D

Fhether the petitioner is entitle to amagesG

H'"D

Ies, she is. Section $ of /ep#lic <ct No. 871, eclares the StateKs recognition of the
Q;iciar! natre of #anking that re@ires high stanars of integrit! an
performance.R PNB =as negligent for its failre to pate an properl! hanle <nna
arieKs acconts. The #ank is not a#solve from lia#ilit! #! the fact that it =as the
#ankKs emplo!ee =ho committe the =rong an case amage to the epositor.
<rticle $189 of the Ne= Civil Coe provies that the o=ners an managers of an
esta#lishment are responsi#le for amages case #! their emplo!ees =hile
performing their fnctions. The Cort agrees =ith the /TC that the PNB faile to
s#stantiate its allegation that <nna arie =as gilt! of contri#tor!
negligence. -n the present case, <nna arie cannot #e hel responsi#le for
entrsting her accont =ith Salvoro. <s sho=n in the recors, Salvoro =as the #ankKs
time eposit specialist. -n these lights, =e hol that <nna arie is entitle to moral
amages of P199,999.99. -n cases of #reach of contract, moral amages are
recovera#le onl! if the efenant acte fralentl! or in #a faith, or is gilt! of 
gross negligence amonting to #a faith, or in clear isregar of his contractal
o#ligations. <nna arie =as a#le to esta#lish the mental angish an serios
aniet! that she sffere #ecase of the PNBKs refsal to honor its o#ligations. <nna
arie is like=ise entitle to eemplar! amages of P29,999.99. <rticle $$$ of the
Ne= Civil Coe imposes eemplar! amages #! =a! of eample or correction for the
p#lic goo. To repeat, #anks mst treat the acconts of its epositors =ith
meticlos care an al=a!s have in min the ;iciar! natre of its relationship =ith
them. 'emplar! amages are a=are herein an as <nna arie =as compelle to
litigate to protect her interests, the a=ar of attorne!Ks fees an epenses of 
litigation of P129,999.99 is proper.

TO$$ES=&AD$#D B$O!E$AE% #NC( 's( FEB &#TS*# &A$#NE #NS*$ANCE CO(%

#NC(
($( +:.+1+% 30ly ++% 12+/
B$#ON% 3(

><CTSD

*5
 Son! Philippines, -nc. (Son!) has engage the services of petitioner to ship
varios electronic goos from Thailan an ala!sia to its =arehose in "agna.
TB- s#contracte the services of BT trcking services to transport the goos
from the port of anila to "agna =arehose. Son! kne= of the contract #et=een
BT an TB-. The trcks of BT arrive an picke p the goos ho=ever the!
cannot leave the port e to trck #an an the follo=ing a! =as a Sna!.
Therefore, there =as a ela! for t=o a!s. Come eliver! a! onl! three trcks
arrive at the =arehose =hile the forth trck =as fon a#anone on a roa
=ith the river an the shipment missing. TB- then emane pa!ment from BT
for the lost shipment #t BT refse. BT allege that the goos =ere hi0acke.
3n the other han, Son! ;ile a claim on its insrer of goos, =hich =as itsi,
=hich in trn emane pa!ment from TB-.

-SSA'D

Fhether or not TB- or BT ma! #e hel lia#le for @asi6 elictG

H'"D

-n the present case, the shipper, Son!, engage the services of TB-, a
common carrier, to facilitate the release of its shipment an eliver the goos to its
=arehose. -n trn, TB- s#contracte a portion of its o#ligation  the eliver! of 
the cargo  to another common carrier, BT. espite the s#contract, TB-
remaine responsi#le for the cargo. Aner <rticle 17*5, a common carrierKs
etraorinar! responsi#ilit! over the shipperKs goos lasts from the time these
goos are nconitionall! place in the possession of, an receive #!, the carrier
for transportation, ntil the! are elivere, actall! or constrctivel!, #! the carrier
to the consignee. That the cargo isappeare ring transit =hile ner the csto!
of BT  TB-Ks s#contractor  i not iminish nor terminate TB-Ks
responsi#ilit! over the cargo. <rticle 17*2 of the Civil Coe presmes that it =as at 
falt. Fe isagree =ith the lo=er cortsK rling that TB- an BT are soliaril!
lia#le to itsi for the loss as 0oint tortfeasors. Nota#l!, TB-Ks lia#ilit! to itsi
oes not stem from a @asi6elict (clpa a@iliana) #t from its #reach of contract 
(clpa contractal).

Fe like=ise isagree =ith the ;ining that BT is irectl! lia#le to

Son!Litsi for the loss of the cargo. Fhile it is nispte that the cargo =as lost 
ner the actal csto! of BT (=hose emplo!ee is the primar! sspect in the
hi0acking or ro##er! of the shipment), no irect contractal relationship eiste
#et=een Son!Litsi an BT. -f at all, Son!LitsiKs case of action against BT
col onl! arise from @asi6elict, as a thir part! sffering amage from the action
of another e to the latterKs falt or negligence, prsant to <rticle $175 of the Civil
Coe. -n clpa contractal, the plaintiff onl! nees to esta#lish the eistence of the

*7
contract an the o#ligorKs failre to perform his o#ligation. 3n the other han, the
plaintiff in clpa a@iliana mst clearl! esta#lish the efenantKs falt or negligence
#ecase this is the ver! #asis of the action. -n the present case, itsiKs action is
solel! premise on TB-Ks #reach of contract. itsi i not even se BT, mch
less prove an! negligence on its part. -f BT has entere the pictre at all, it is
#ecase TB- se it for reim#rsement for the lia#ilit! that TB- might incr from
its contract of carriage =ith Son!Litsi. <ccoringl!, there is no #asis to irectl!
hol BT lia#le to itsi for @asi6elict.

<N-"< '"'CT/-C C3P<NI vs. SP3AS'S SA"P-C-3 & P<T/-C-< /<3S

+./. No. 1212, >e#rar! 19, $915
B/-3N, %.

><CTSD

/esponents availe of the services of the responent. There#! reslting to a

contract of service =herein the electric compan! =ill sppl! electricit! to the
resience of responent. eralco installe an electric meter otsie the front =all of 
the sposes Sales. Fhen the service inspector of eralco concte an inspection
on the responents electric meter, the! fon ot that there =as an illegal
connection mae #! the sposes Sales. eralco isconnecte the electricit! sppl!
of the responent =ithot their kno=lege as the! =ere not at home ring the
inspection.
Fhen the responents fon ot that the! have no electricit! an that there
connection =as isconnecte, the! ;ile a complaint for Breach of Contract =ith
Preliminar! anator! -n0nction.

-SSA'D
Fhether or not the responents are entitle to amagesG

H'"D

Central in this case, as to the rling lai ot #! the Cort, is the entitlement of 
responents to amages reslting from '/<"C3Ks nla=fl isconnection of their
electricit! sppl!. /esponents entitlement ;irst to actal amages is tena#le e to
the reason that as to '/<"C3Ks refsal to re6connect responentKs electricit!
sppl!, responents enre for long eight (8) months =ithot electricit! an their
ail! epenses on foo an other hosehols increase.

Ho=ever, the Cort ;ins it reasona#le to iscss the tenor of actal amages an its
0sti;ication for a=ar =here it iscsse actal amages in the case of :iron
Transportation Co., -nc. v. elos Santos, the Cort ela#orate the re@isites of actal
amages that ;irst, there mst #e a pleaing of proof of the amages sffere, it 
frther rle that for actal amages to #e a#le to recover it mst #e prove
s#stantiall! an =ith reasona#le certaint!. <s corts cannot simpl! rel! on mere

*8
IX. NUISANCES

207. People vs De Guzman (90 Phil 132)

TOPIC: Nuisance: constitutionality of an ordinance

DOCTRINE: There can be no dispute that the passage of the ordinance was prompted by a desire
to abate nuisances resulting from the operation of lumber yards within residential zones, and this
falls under the legitimate exercise of police power by the municipal council.

The fact that, as contended by appellants, the municipal authorities of Lucena might have been
lax in the enforcement or allowed violations of other ordinances, is not a valid defense against the
instant prosecution. Proper action, if any, should be taken against the erring officials.

SUMMARY: Owner (appellants) of Lumber Yards were charged because their business is located
within the prohibited zone of their municipality. They were notified by the Mayor to remove and
transfer the lumber establishment, but failed to do so. At the Fiscal Office, they were also asked
the same thing within another period of time, but failed again. Upon prosecution, they contended
that the ordinance was unconstitutional. The SC held its constitutionality.

FACTS: defendants have appealed from a judgment of the Court of First Instance of Quezon,
finding them guilty of a violation of an Ordinance of the municipal council of Lucena, who were
originally charged in the justice of the peace court of Lucena which found them guilty and
sentenced each of them to pay a fine with subsidiary imprisonment in case of insolvency.

The separate informations filed against the appellants alleged that the said accused, being then
the owner and proprietor of a lumber yard (Tableria) located inside the prohibited zone of said
Municipality fail to remove and transfer her lumber establishment within the time granted her to
do so.

Municipal Ordinance No. 1, series of 1946 provides for the definition of Lumber Yards, the allowed
distance from the nearest house, prohibited zones for those not utilizing motors, how to secure
license and permit and penalties

It appears that appellants were the owners of the Victory Lumber Yard, Pacific Lumber, Capitol
Lumber, and International Construction & Supply, located within the area prohibited by the
Municipal Ordinance. They had been operating the lumber yards prior to the enactment of the
ordinance, and continued to do so thereafter. In January, 1947, they were duly notified by the
Mayor of Lucena to comply with said ordinance by moving their lumberyards out of the prohibited
zone on or before April 1, 1947.

Upon their failure to do so, the Mayor, on May 28, 1947, went to the Office of the Provincial Fiscal
of Quezon wherein he met appellant de Guzman and Eleuterio Lim, the latter in representation of
the Chinese Chamber of Commerce and the other appellants. Assistant Provincial Fiscal gave
the appellants another thirty days within which to comply with the ordinance. Upon their failure to
do so, the present prosecution was instituted.

The principal contention of the appellants is that the ordinance is unconstitutional, in that itis an
invasion of the property rights of lumberyard owners without due process of law, denies equal
protection of the laws, and discriminates against Chinese.

ISSUE: Whether the Municipal Ordinance is violative of the appellant’s constitutional rights
because of prohibitions in the said ordinance. - NO

RULING: In answer to this contention, it is sufficient to quote hereunder the syllabus of the
decision in the case of Benito Tan Chat et al., vs. the Municipality of Iloilo, in which the
constitutionality of a similar zoning ordinance was upheld by this Court:

Municipalities; power to abate nuisances.

—The defendant municipality, in the exercise of the powers delegated to it by the
Legislature, and by virtue of the police power conferred upon it by the express provisions
of section 2242 (h) of the Revised Administrative Code, has the power to enact ordinances
for the purpose of regulating and abating public nuisances particularly when the measure
is sound and redounds to the benefit of the inhabitants of the locality and is reasonably
exercised.

Nuisances "per se" and nuisances "per accidens".

Taking' into consideration the nature of the plaintiffs' business which consisted of a saw
mill and lumber yards, and the indisputable fact that the conduct thereof necessarily
disturbs passers-by and the neighbors, Held: That such business constitutes nuisances
per accidens or per se.

Zoning Ordinance.
The power of municipal corporations to divide their territory into industrial, commercial and
residential zones is recognized in almost all jurisdictions inasmuch as it is derived from
the police power itself and is exercised for the benefit and protection of their inhabitants.

Constitutionality.
In enacting the ordinance in question, the defendant municipality does not appropriate the
properties of the plaintiffs but simply prohibits the conduct of said industry or business
within the limits established therein, the provisions of which are in accordance with the old
and well-known maxim: salus populi suprema lex (the welfare of the people is the supreme
law). For this reason, it does not violate the constitutional rule prohibiting confiscation of
property without due compensation.

It cannot be seriously contended that there is discrimination in favor of Filipinos, because the
prohibition in the ordinance in question applies to all lumber yards regardless of the race of their
owners. As a matter of fact, appellant Irene de Guzman is, by her own admission, a Filipina.
Engracio Jalbuena and Nestorio Tolentino, who are alleged to have lumber yards within the
prohibited zone, no longer had the same when the trial Judge made an ocular inspection; and
Tolentino now runs only a furniture store therein.

There can be no dispute that the passage of the ordinance was prompted by a desire to abate
nuisances resulting from the operation of lumber yards within residential zones, and this falls
under the legitimate exercise of police power by the municipal council.

The fact that, as contended by appellants, the municipal authorities of Lucena might have been
lax in the enforcement or allowed violations of other ordinances, is not a valid defense against the
instant prosecution. Proper action, if any, should be taken against the erring officials.

Wherefore, the appealed judgment is affirmed, and it is so ordered with costs against the
appellants.

Espiritu vs Municipal Council, Pozorrubio (102 Phil 867)

TOPIC: Illegal constructions as nuisance

DOCTRINE: Town plazas are properties of public dominion, to be devoted to public use and to
be made available to the public in general. Hence it should ever be kept open to the public and
free from encumbrances or illegal private constructions.

SUMMARY: When the war ended, some residents of the town of Pozzorubio occupied the plaza
installing market stalls while some used the space as their residence. Several complaints was
received by the municipal council prompting it to order the occupants to remove their installations.
SC held that plazas should be open and that the market stalls are considered as nuisance.

FACTS:

During the last world war (WWII), the market building of the town of Pozorrubio was destroyed,
and after Liberation, the market vendors began constructing temporary and make- shift stalls,
even small residences, on a portion of the town plaza.

The Municipal Treasurer collected from these stall owners a fee per month. In time, the whole
municipal market was rehabilitated, but the owners of the structures on the plaza failed and
refused to transfer to said market place.

The Municipal Council of Pozorrubio received petitions from civic organizations like the Woman's
Club and the Puericulture Center, for the removal of the market stalls on the plaza, which were
being used not only as stalls but also for residence purposes, said organizations desiring to
convert said portion of the plaza into a children's park. The council was also given the letter-
circular of the Secretary of the Interior about the existence of these stalls on the public plaza, said
to be illegal.
As a result, the Municipal Council of Pozorrubio passed a resolution stating that the public market
had already been rehabilitated, and ordering the occupants and owners of the structures on the
plaza to remove their buildings within sixty days from receipt of the resolution.

In answer, eight of the market stall building owners filed a petition for prohibition in the CFI of
Pangasinan against the Municipal Council, the Municipal Mayor, and the Chief of Police of
Pozorrubio.

TC found that the fees collected are not for rent but rather as market stalls fees charge. And that
there was absolutely no contract or agreement between the appellants on one side and the
municipality on the other, about renting of the Plaza to the former.

Issue: w/n the market stalls and residence situated in the plaza can be classified as nuisance

Held:

Yes. There is reason to believe that the occupation of the plaza and the construction of temporary
buildings thereon by appellants mostly for market, even residence purposes, was merely tolerated
by the municipality, because of the destruction of the public market during the war, but the trouble
is that appellants, even after the rehabilitation of the old market, refused to transfer to said market
place, perhaps to save the trouble and expense of transferring their buildings, or possibly to
continue enjoying the benefits from the strategic position of their stalls at the plaza. (ayaw mag
si-alis)

There is absolutely no question that the town plaza cannot be used for the construction of market
stalls, specially of residences, and that such structures constitute a nuisance subject to abatement
according to law. Town plazas are properties of public dominion to be devoted to public use and
to be made available to the public in general. They are outside the commerce of man and cannot
be disposed of or even leased by the or even leased by themunicipality to private parties.
municipality to private parties.

While in case of war or during an emergency, town plazas may be occupied temporarily by private
individuals, as was done and as was tolerated by the Municipality of Pozorrubio, when the
emergency has ceased, said temporary occupation or use must also cease, and the town officials
should see to it that the town plazas should ever be kept open to the public and free from
encumbrances or illegal private constructions.

Case became moot and academic because the vendors voluntarily removed their stalls.

Iloilo Cold Storage vs Municipal Council (24 Phil 471)

TOPIC:
DOCTRINE:
SUMMARY:
FACTS: Upon authority granted by the respondent Municipal Council of Iloilo, Iloilo Cold Storage
(ICS) constructed an ice and cold storage plant in the city of Iloilo. Nearby residents complained
of its operation due to the smoke from the plant. After finding the complaints to be well-founded,
a resolution was passed wherein ICS was given a month to address the smoke complaint, and if
not done, its operations will be closed or suspended.

After receipt of such resolution and order, ICS commenced this action with CFI to enjoin the
Municipal Council from effecting such resolution, arguing that such order under the resolution was
without the intervention of the court, hence, it’s not obliged to do and will not do it. Pursuant to
CFI sustaining ICS’s demurrer to Municipal’s answer, Municipal elevated the case to the SC.

The issue in this case, according to the pleadings, relates to the power of the municipal council
to declare the plant of the petitioner a nuisance as operated, and the method of abating it.

ISSUE: Whether the municipal council has power to declare the plant of the petitioner a nuisance
as operated? - NO

RULING: The SC held that the municipal council is, under section 39 of the Municipal Code,
specifically empowered to declare and abate nuisances. However, the court then cited numerous
nuisance cases which discussed how it is clear that municipal councils have, under the code, the
power to declare and abate nuisances, but it is equally clear that they do not have the.power
to find as a fact that a particular thing is a nuisance when such thing is not a nuisance per
se; nor can they authorize the extrajudicial condemnation and destruction of that as a nuisance
which in its nature, situation, or use is not such. These things must be determined in the ordinary
courts of law.

In the present case it is certain that the ice factory of the plaintiff is not a nuisance per se. It is a
legitimate industry, beneficial to the people, and conducive to their health and comfort. If it be in
fact a nuisance due to the manner of its operation, that question cannot be determined by a mere
resolution of the board. The petitioner is entitled to a fair and impartial hearing before a judicial
tribunal.

A nuisance is, according to Blackstone, "Any thing that worketh hurt, inconvenience, or damage.
They arise from pursuing particular trades or industries in populous neighborhoods; from acts of
public indecency, keeping disorderly houses, and houses of ill fame, gambling houses, etc.

Kinds of Nuisance: Nuisances have been divided into two classes: Nuisances per se, and
nuisances per accidens. To the first belong those which are unquestionably and under all
circumstances nuisances, such as gambling houses, houses of ill fame, etc. The number of such
nuisances is necessarily limited, and by far the greater number of nuisances are such because of
particular facts and circumstances surrounding the otherwise harmless cause of the nuisance.
For this reason, it will readily be seen that whether a particular thing is a nuisance is generally a
question of fact, to be determined in the first instance before the term nuisance can be applied to
it. This is certainly true of a legitimate calling, trade, or business such as an ice plant.
The authority to decide when a nuisance exists is an authority to find facts, to estimate their force,
and to apply rules of law to the case thus made. This is a judicial function, and it is a function
applicable to a numerous class of important interests. To say to a man that he shall not use his
property as he pleases, under certain conditions, is to deprive him pro tanto of the enjoyment of
such property. If a man's property cannot be taken away from him except upon trial by jury, or by
the exercise of the right of eminent domain upon compensation made, neither can he, in any other
mode, be limited in the use of it. The right to abate public nuisances, whether we regard it as
existing in the municipalities, or in the community, or in the land of the individual, is a common
law right, and is derived, in every instance of its exercise, from the same source— that of
necessity.

Tan Chat vs Municipality of Iloilo (60 Phil 465)

TOPIC: Public Nuisance of Lumber Merchants.

DOCTRINE: One of the most usual powers enjoyed by municipal corporations is that of
suppressing nuisances. The abatement of nuisances by municipal corporations is a governmental
function. The power to abate nuisances may extend to abate nuisances created by public utilities.
Primarily, it is within the power of municipal authorities to determine and declare what shall
constitute a nuisance. A large discretion rests with the municipal governing body in determining
what constitutes nuisances.

SUMMARY: An ordinance was passed prohibiting lumber merchants along several streets in
Iloilo. Plaintiff then opposed such ordinance contending that such ordinance violates their rights.
Respondent Municipality however countered that it is within their power to abate public nuisance
and that the buildings where the sawmills are stored are fire hazards. The court held that the
ordinance was valid.

FACTS: On December of 1932, Municipal council of Iloilo passed an ordinance prohibiting the
storing and sale of lumber and the keeping of limber stores on several streets in Iloilo as the
municipal council considers it as a public nuisance. On the said ordinance, they have given the
subject residents to move and to comply.

The plaintiffs, merchants residing in said city, instituted an action in the Court of First Instance of
the province for the purpose of annulling said ordinance, alleging that the same is illegal and in
violation of their rights. It appears from the evidence that the plaintiffs are lumber merchants with
their place of business on Iznart Street and inside said buildings, sawed lumber is stored and on
the premises blocks and big pieces of lumber are deposited, which are sawed by means of a
small sawmill run by petroleum belonging to the plaintiff Benito Tan Chat. The loading of sawed
lumber sold by these merchants is usually done within said buildings without annoyance to the
neighbors nor to passers-by.
Defendant however countered that the streets named in the ordinance constitute the most
important commercial and residential zone and the most thickly populated section of the
downtown district of this municipality of Iloilo, capital of the Province of Iloilo. Respondent also
cited another ordinance following a plan of expansion, urbanization, beautification and the public
safety of its inhabitants, has declared the streets enumerated as zones for strong material and
fire proof buildings. That in violation of the ordinances mentioned, the plaintiffs residing on Iznart
Street and other persons and entities residing on the other streets referred, have constructed ugly
and unsightly buildings, without protection against fire and the spread thereof, wherein they have
operated and are operating sawmills and have piled and are piling large quantities of lumber and
sawdust, thus marring the beauty of said streets and creating a public nuisance and a source of
fire which constantly threatens with destruction and loss of valuable business and individual
properties. the defendant also claim that has given the plaintiffs ample and reasonable time to
enable them to remove and transfer their lumber stores and sawmills above mentioned, to some
other place not prohibited by the ordinance, but they refused and still refuse to do so without legal
excuse or justification.

The Lower court in its decision ruled that the ordinance is null and void and declared that the
lumber merchants along the enumerated street in the ordinance are not public nuisance.

ISSUE: Whether or not the sawmill and lumber stores of the plaintiffs constitute nuisances per se
or per accidens.

RULING: YES. Bearing in mind the nature of such business and the indisputable fact that the
conduct thereof necessarily disturbs and annoys passers-by and the neighbors, the court did not
hesitate to declare that said business constitutes nuisance per accidens or per se.

The ordinance clearly states that the sawmill and the sale of lumber by the plaintiffs on Iznart
Street constitute public nuisances; and although the question of f act herein involved may properly
be reviewed by the courts, the evidence of record sufficiently justifies such conclusion. The power
of the municipalities, in the exercise of their police power, to regulate and abate public nuisances
is indisputable, when the measure taken to that end is sound and reasonable, and redounds to
the benefit of the locality.

"One of the most usual powers enjoyed by municipal corporations is that of suppressing
nuisances. The abatement of nuisances by municipal corporations is a governmental function.
The power to abate nuisances may extend to abate nuisances created by public utilities. Primarily,
it is within the power of municipal authorities to determine and declare what shall constitute a
nuisance. A large discretion rests with the municipal governing body in determining what
constitutes nuisances.

The argument that the provision of ordinance giving the plaintiffs a fixed period to move their
sawmill and lumber stores to some other adequate place is unconstitutional, on the ground that
said measure is confiscatory and does not provide adequate compensation, is untenable, for the
reason that in this case the city of Iloilo does not take over the ownership of said business but
simply prohibits the conduct of said industry or business within the limits established in the
ordinance, and said prohibition is within the powers conferred upon the municipality. In enacting
the ordinance in question the city of Iloilo has done nothing but to safeguard the health, safety,
and welfare of its inhabitants, and it is perfectly fair that the herein plaintiffs should abide by the
provisions thereof which are in accordance with the old and well-known maxim: Salus populi
suprema lex.

In view of the foregoing, the above quoted ordinance is hereby declared valid and the judgment
appealed from is reversed, with costs of both instances against the plaintiff appellees.

Bengson vs Province of Pangasinan (62 Phil 816)

TOPIC:
DOCTRINE:
SUMMARY:
FACTS: Plaintiff Juan Bengzon owns a house constructed of wood and covered with nipa on Avenida
Rizal, municipality of Lingayen, Province of Pangasinan; that he had and his family have resided there
for twenty-seven years, his family being composed of eight members. Their house is two stories
constructed upon a lot which contains 720 square meter. Upon the adjacent lot the defendant, during
the years 1924 and 1925, constructed a reinforced concrete stand pipe 28 meters high and nine
meters in diameter. Within the base of this cylindrical tank there are three machines: One electrical,
one gasoline and one crude oil. On the side of the tank nearest the plaintiff's residence and at a
distance of 3.4 meters is a chimney which rises to about the height of the gable of the house. The tank
itself is 3.8 meters from the house of the plaintiff.

In March, 1927, the plaintiff protested to the governor of the province for the manner in which the plant
was being operated and asked that he be indemnified for the value of his house and lot so that he
might move his family and his effects to another residence.

After making an ocular inspection of the plant and hearing the testimony of the witnesses, the trial
court came to the conclusion that although the operation of the pumps and the tank creates some
annoyance and discomfort to the plaintiff, these are but ordinary and incidental to the reasonable
conduct of the defendant's water system. The court further held that inasmuch as the plaintiff did not
protest till after the plan was constructed, his action is barred for laches.

ISSUE: Whether or not the case presents an actionable nuisance.

RULING: In locating its pumping station within 3.8 meters from the house of the plaintiff, the defendant
should reasonably have foreseen that the noise, vibrations, smoke, odor and sparks coming from the
plant during its operation, not only during the day but during the night as well, would cause a constant
annoyance, discomfort and danger both to the property of the plaintiff and the health and comport of
himself and his family. The chimney which is just opposite the plaintiff's house at a distance of only
3.4 meters emits smoke, gases of crude oil and gasoline and occasionally sparks well. The plaintiff
testified that at times the smoke blinds him and his family affecting their lungs and their eyes and that
the noise and vibrations affect their sleep. As against the testimony of the plaintiff, who is exposed day
in and day out to these conditions, and of his neighbors who corroborate him, the brief ocular
inspection made by the court on one day, although conducted with eminent fairness, seems to us to
be entitled to less weight. The witnesses for the defendant, its employees, naturally minimize the
harmful effects to the plaintiff of the operation of the machines in the pumping plant. But the evidence
as a whole leaves us with clear conviction that the construction and operation of this pumping plant in
such close proximity to the plaintiff's residence has rendered the same practically uninhabitable
without exposing to risk the comfort, health and, in case of fire, even the live of the plaintiff and his
family.

We find from the preponderance of the evidence that the fair present value of the appellant's premises
involved in this suit is P3,000; and as, under the circumstances, the maintenance of the nuisance is
practically tantamount to an expropriation, we have concluded that the defendant-appellee should be
and it is hereby required and adjudged to pay by him to it of a valid conveyance of the premises, free
of liens and incumbrances, reserving to the plaintiff-appellant the right to remove his improvements
therefrom within three months from the date of payment of the said P3,000.

The judgment appealed from is reserved and the cause is remanded for further proceedings in
accordance with this decision. No special pronouncement as to costs in this instance.

Canlas vs De Aquino (2 SCRA 814)

TOPIC: Injunction can be issued even though there was no ruling as nuisance, specially in
damages to be suffered by the public

DOCTRINE: The operation of a hospital is a matter that, not only concerns its owners or
operators, but, also, if not more particularly, affects the health and welfare of the community, and
the damages sustained by the latter, in consequence, either of the obstruction to the proper
operation of said hospital or of its closing, can not possibly be compensated in full.

SUMMARY: Petitioner built a hospital but Tayag wants to build a rice mill in front of it. Injunction
was prayed for and granted but was lifted by Judge De Aquino because the rice mill was not yet
proved as a nuisance. Court ruled that the damages sustained by the public, in consequence,
either of the obstruction to the proper operation of said hospital or of its closing, can not possibly
be compensated in full.

FACTS: Petitioners, who are spouse and doctors of medicine, were granted a permit for the
construction of a house in Tarlac which will serve as a private hospital. The authority to operate
said hospital was approved by Director of Hospitals after the resolution of Provincial Board of
Tarlac. Before the said approval, respondent Jaime Tayag had obtained a permit to construct a
rice mill in front of the said hospital, just across the street. It appears, however, that a municipal
ordinance requires a sanitary permit issued by the local health officer, for operation of any
establishment which may exhale foul odor or cause physical discomfort to such degree as to
constitute a nuisance. Purporting to act pursuant to such ordinance, the municipal health officer
revoked the permit of Tayag.
Tayag was about to proceed with the construction of his rice mill despite this communication but
Petitioners filed for issuance of preliminary injunction enjoining tayag from constructing the rice
mill. CFI issued said order. Tayag filed for the dissolution of said writ, alleging that the same
"would work great damage to the defendant who has already spent a considerable sum of money",
and that petitioners "can be fully compensated for any damages that they may suffer as
respondent Tayag "is not only solvent but is willing to put up a bond in such amount as" the court
may fix. [I can buy you and your hospital, lol]

This motion of Tayag was granted by Judge De Aquino. MR was denied, hence this presence
petition.

ISSUE: WON the earlier injunction suit was proper even though the rice mill was not yet ruled as
a nuisance

RULING: YES. Worst still, it is obvious that, the operation of a hospital is a matter that, not only
concerns its owners or operators, but also, if not more particularly affects the health and welfare
of the community, and that the damage sustained by the latter, in consequence, either of the
obstruction to the proper operation of said hospital or of its closing, can not possibly compensated
in full.

Then, too, it would appear that respondent Judge issued the order complained of on account of
"very reliable information" he had received privately, to the effect that "these days a ricemill can
be operated without causing any noise or emitting any smoke in such a way as (not) to be a
nuisance to the neighborhood". In his order, denying the MR, respondent stated, by way of
justification for his reliance upon said "information", that, immediately after the construction of
Tayag's ricemill, the Court intended to inspect the same "and see whether it really can be operated
without noise or smoke" and that, if the ricemill is smoke while in was then found to "cause noise
and emit smoke while in operation", the court would "immediately enjoin its operation". This
process of reasoning entails such a serious error of judgment as to constitute a grave abuse of
discretion amounting to excess of jurisdiction.

Indeed, the main action was filed by petitioners herein for the purpose of joining and prohibiting
Tayag from the constructing a rice mill, so that, upon the construction thereof, said action would
become futile. Besides, the intention of respondent Judge to prohibit the continuance of the
operation of said rice mill, should it later be found to be a nuisance, is not sufficient to offset the
harm already done to the operation of the hospital, specially the injury suffered by the patients
therein and the public in general, which are hardly susceptible of estimation or compensation.
Needless to say, by permitting Tayag to construct his building, and purchase and install the
machinery for the operation of the rice mill, respondent Judge exposed him to much greater
damage than that which could possibly have resulted had the writ of preliminary injunction been
maintained until the final disposition of the case.

San Rafael Homeowners vs City of Manila (46 SCRA 40)

TOPIC: Premature cause of action based on nuisance

DOCTRINE: This Court cannot and should not substitute its judgment this early for that of the
respondents and on a purely theoretical basis rule that the bid submitted should not be opened,
or if opened should not be accepted, because not one of the plants therein offered to be
established would serve the purpose envisaged and because, if so established, it would so pollute
the environment as to constitute a nuisance. If and when such a result becomes a reality, or at
least an imminent threat, that will be the time the petitioners may come to court.

SUMMARY: City of Manila planned to hold a bidding for the construction of a garbage and refuse
disposal plant. Petitioners filed two civil cases on the ground that the plant to be constructed is a
nuisance. SC held that petitions for that purpose are premature. Only when such a result becomes
a reality, or at least an imminent threat, that will be the time the petitioners may come to court.

FACTS: Since 1955 the City of Manila had been conducting studies on the problem of garbage
and refuse disposal. In 1961 a pilot composting plant was in operation at the North Harbor. On 15
November 1965 city Ordinance No. 5274 was enacted, "authorizing the establishment, equipping
and construction of a garbage and refuse disposal plant ..." and appropriating the sum of
P15,000,000.00 for that purpose.

Pursuant to Ordinance No. 5274 the City of Manila advertised for and received bids for the
construction of the plant in accordance with specifications previously prepared by the
respondents.

Two civil cases were filed for a restraining order to stop the scheduled bidding. A joint decision
was promulgated by the lower court denying the writs prayed for and dismissing both petitions.

Petitioners contends that the advertised bidding for an incinerator was in excess of the
respondents' authority because an incinerator is a nuisance per se and because its establishment
would violate Ordinance No. 5274, the City Charter of Manila, the Revised Administrative Code,
and the Local Autonomy Act.

ISSUE: Whether a suit for prohibition of the bidding for the construction of the plant is proper. NO

RULING: The instant petitions for that purpose are premature. Certainly this Court cannot and
should not substitute its judgment this early for that of the respondents and on a purely theoretical
basis rule that the bid submitted should not be opened, or if opened should not be accepted,
because not one of the plants therein offered to be established would serve the purpose
envisaged and because, if so established, it would so pollute the environment as to constitute a
nuisance. If and when such a result becomes a reality, or at least an imminent threat, that will be
the time the petitioners may come to court.

That they are not successful now will not preclude them from doing so, because a continuing
nuisance calls for a continuing remedy. It is even a possibility that none of the bids submitted to
the respondents will be accepted for failure to come up to the standards required by the
specifications. And should an award be made notwithstanding such failure, demonstrable in court,
then a suit for prohibition would be proper.

Velasco vs Meralco (40 SCRA 342)

TOPIC: When noise may constitute an actionable nuisance

DOCTRINE: A noise may constitute an actionable nuisance, but it must be a noise which affects
injuriously the health or comfort of ordinary people in the vicinity to an unreasonable
extent. Injury to a particular person in a peculiar position or of specially sensitive characteristics
will not render the noise an actionable nuisance.

TEST: Whether rights of property, of health or of comfort are so injuriously affected by the noise
in question that the sufferer is subjected to a loss which goes beyond the reasonable limit imposed
upon him by the condition of living, or of holding property, in a particular locality in fact devoted to
uses which involve the emission of noise although ordinary care is taken to confine it within
reasonable bounds; or in the vicinity of property of another owner who though creating a noise is
acting with reasonable regard for the rights of those affected by it.

SUMMARY: Appellant Velasco owned a lot located near the construction of substation of
Meralco. It is undisputed that a sound unceasingly emanates from the substation. Thus,
Velasco sought a judicial decree for the abatement of the nuisance and asked that he be declared
entitled to recover compensatory, moral and other damages under Article 2202 of the Civil Code.
RTC dismissed the complaint. SC held that the conclusion must be that, contrary to the finding of
the trial court, the noise continuously emitted, day and night, constitutes an actionable
nuisance for which the appellant is entitled to relief.

FACTS: Appellant Velasco bought three (3) adjoining lots and subsequently, two (2) lots were
sold to Meralco, but retained the third lot, which was farthest from the street-corner, whereon he
built his house.

In September, 1953, the appellee company started the construction of the sub-station in question
and finished it the following November, without prior building permit or authority from the Public
Service Commission. The facility reduces high voltage electricity to a current suitable for
distribution to the company’s consumers. It was constructed at a distance of 10 to 20 meters from
the appellant’s house. The company built a stone and cement wall at the sides along the streets
but along the side adjoining the appellant’s property it put up a sawale wall but later changed it to
an interlink wire fence.

It is undisputed that a sound unceasingly emanates from the substation.

Plaintiff-appellant Velasco contends that the sound constitutes an actionable nuisance under
Article 694 of the Civil Code. Because subjection to the sound since 1954 had disturbed the
concentration and sleep of said appellant, and impaired his health and lowered the value of his
property. Wherefore, he sought a judicial decree for the abatement of the nuisance and asked
that he be declared entitled to recover compensatory, moral and other damages under Article
2202 of the Civil Code.

After trial, as already observed, the court below dismissed the claim of the plaintiff, finding
that the sound of the substation was unavoidable and did not constitute nuisance; that it
could not have caused the diseases of anxiety neurosis, pyelonephritis, ureteritis, lumbago and
anemia; and that the items of damage claimed by plaintiff were not adequate proved. Plaintiff then
appealed to this Court.

ISSUE: Whether this sound emanating from the substation constitutes an actionable nuisance or
not. YES

RULING: The general rule is that everyone is bound to bear the habitual or customary
inconveniences that result from the proximity of others, and so long as this level is not surpassed,
he may not complain against them. But if the prejudice exceeds the inconveniences that such
proximity habitually brings, the neighbor who causes such disturbance is held responsible for the
resulting damage, being guilty of causing nuisance.

The test is whether rights of property, of health or of comfort are so injuriously affected by the
noise in question that the sufferer is subjected to a loss which goes beyond the reasonable limit
imposed upon him by the condition of living, or of holding property, in a particular locality in fact
devoted to uses which involve the emission of noise although ordinary care is taken to confine it
within reasonable bounds; or in the vicinity of property of another owner who though creating a
noise is acting with reasonable regard for the rights of those affected by it.

In fact, Kentucky v. Anderson dealt with noise emanating from electrical machinery and
appliances. The determining factor, however, is not just intensity or volume. It must be of such
character as to produce actual physical discomfort and annoyance to a person of ordinary
sensibilities. However, appellant’s testimony is too plainly biased. Nor are the witnesses’
testimonies revealing on account of different perceptions. Consequently, sound level meters were
used.

As stated above, the sound exceeds average residential decibels. Also, the testimonies of
appellant’s physicians point to the noise as having caused appellant loss of sleep, irritation and
tension weakening his constitution. Notable lastly is the fact that in the Kentucky case, where the
nuisance was ordered abated, the average reading was 44 decibels while in the instant, the
readings include 52, 54, and 55.
 x x x Thus the impartial and objective evidence points to the sound emitted by the appellee’s
substation transformers being of much higher level than the ambient sound of the locality. The
measurements taken by Dr. Almonte, who is not connected with either party, and is a physician
to boot (unlike appellee’s electrical superintendent Buenafe), appear more reliable. The
conclusion must be that, contrary to the finding of the trial court, the noise continuously emitted,
day and night, constitutes an actionable nuisance for which the appellant is entitled to
relief, by requiring the appellee company to adopt the necessary measures to deaden or reduce
the sound at the plaintiff’s house, by replacing the interlink wire fence with a partition made of
sound absorbent material, since the relocation of the substation is manifestly impracticable and
would be prejudicial to the customers of the Electric Company who are being serviced from the
substation.

AWARD OF DAMAGES: Regarding the amount of damages claimed by appellant, it is plain that
the same are exaggerated. To begin with, the alleged loss of earnings at the rate of P19,000 per
annum is predicated on the Internal Revenue assessment,it appears that P5,000 thereof was the
appellant’s annual salary from the Quezon Memorial Foundation, which was not really connected
with the usual earnings derived from practice as a physician. Considering, therefore, his actual
earnings, the claimed moral damages of P100,000.00 are utterly disproportionate. The alleged
losses for shortening of appellant’s life expectancy are not only inflated but speculative.

As to the demand for exemplary or punitive damages, there appears no adequate basis for their
award. While the appellee Manila Electric Company was convicted for erecting the substation in
question without permit from the Public Service Commission, We find reasonable its explanation
that its officials and counsel had originally deemed that such permit was not required as the
installation was authorized by the terms of its franchise (as amended by Republic Act No. 150)
requiring it to spend within 5 years not less than forty million pesos for maintenance and additions
to its electric system, including needed power plants and substations.

Neither the absence of such permit from the Public Service Commission nor the lack of permit
from the Quezon City authorities (a permit that was subsequently granted) is incompatible with
the Company’s good faith, until the courts finally ruled that its interpretation of the franchise was
incorrect.

MITIGATE LIABILITY: (NB. Baka lang matanung) There are, moreover, several factors that
mitigate defendant’s liability in damages. The first is that the noise from the substation does not
appear to be an exclusive causative factor of plaintiffappellant’s illnesses. This is proved by the
circumstance that no other person in Velasco’s own household nor in his immediate neighborhood
was shown to have become sick despite the noise complained of. There is also evidence that at
the time the plaintiffappellant appears to have been largely indebted to various credit institutions,
as a result of his unsuccessful gubernatorial campaign, and this court can take judicial cognizance
of the fact that financial worries can affect unfavorably the debtor’s disposition and mentality.

The other factor militating against full recovery by the petitioner Velasco in his passivity in the face
of the damage caused to him by the noise of the substation. Realizing as a physician that the
latter was disturbing or depriving him of sleep and affecting both his physical and mental well
being, he did not take any steps to bring action to abate the nuisance or remove himself from the
affected area as soon as the deleterious effects became noticeable. To evade them appellant did
not even have to sell his house; he could have leased it and rented other premises for sleeping
and maintaining his office and thus preserve his health as ordinary prudence demanded. Instead
he obstinately stayed until his health became gravely affected, apparently hoping that he would
thereby saddle appellee with large damages.

215. Ramcar vs Millar (6 SCRA 517)

TOPIC: Nuisance: determination

DOCTRINE: Whether a particular thing is or is not a nuisance is a question of fact (Iloilo Cold
Storage Co. vs. Municipal Council, 24 Phil. 471; 61C.J.S. 864) and is properly within the
jurisdiction of the Court of Appeals, whose findings of fact are conclusive on the Supreme Court.

SUMMARY: (Same with Facts - Short Case)

FACTS: Ramcar operates and maintains an auto repair and body building shop. The six others
residing near the shop brought an action in the Court of First Instance of Manila to abate the
establishment as a nuisance because of the activity of repairing and building bodies of motor
vehicles which involves tools and machineries which gives rise to too much noise and annoyance.
The respondents repeatedly complained to the city authorities for the closure of the shop however
the city authorities were at loggerheads as to whether the immediate vicinity where the business
of Ramcar is located is in the residential zone.

The trial court dismissed the complaint and Millar, et al appealed to CA which reversed the trial
court's decision.

Ramcar brought the decision to the SC.

ISSUE: Whether Ramcar, Inc. permit to operate as a garage entitles it to conduct its business
and that the said business is not a nuisance according to Ordinance No 2906. - NO

RULING: The said ordinance restricts the kind of business, buildings and establishment that may
be built on commercial zones and the enumeration of permitted activities includes Garage and
gasoline service station.

The business of body building is not a nuisance per se; it becomes a nuisance only on the account
of the location. To abate it, it is not necessary to remove the buildings and structure built in the
place where it is presently located, as these, or parts thereof may be utilized for pursuits that are
not forbidden by law or ordinance.
A body building shop is not within the purview of a garage which designates a shop for storing,
repairing and servicing motor vehicles, being merely a modern substitute for the ancient livery
stable. The term repair presupposes for decay, dilapidation, injury or partial destruction of repaired
elements, for example broken or damaged parts of a structural whole to their original condition
cannot apply to building or remodeling of bodies or structures.

Whether a particular thing is a nuisance is a question of fact and is properly within the jurisdiction
of the CA whose findings of fact that the noise created by the use of tools is in violation of zoning
ordinance is conclusive. Sec 18 of RA 904 grants legislative powers to the municipal board to
declare, prevent and provide for the abatement of nuisance inaction by the board does not
preclude the ultimate case tried before them.

The award of damages arising from a nuisance authorized under Article 697 and 2196 of the Civil
Code.

Hidalgo Enterprise vs Balaman (91 Phil 488)

TOPIC: Bodies of water - not nuisance

DOCTRINE: The attractive nuisance doctrine generally is not applicable to bodies of water,
artificial as well as natural, in the absence of some unusual condition or artificial feature other
than the mere water and its location.

SUMMARY: Hidalgo maintains 2 tanks filled with water in its premises. A boy drowned. Issue is
whether swimming pools and tanks can be considered as attractive nuisance. SC adopts US
jurisprudence holding that they are not since the children are early instructed so that they are
sufficiently presumed to know the danger of natural or artificial bodies of water.

FACTS:

Petitioner Hidalgo Enterprises, Inc. was the owner of an ice-plant factory in Laguna where two
tanks of tanks full of water, nine feet deep, for cooling purposes of its engine.

While the factory compound was surrounded with fence, the tanks themselves were not provided
with any kind of fence or top covers. The edges of the tanks were barely a foot high from the
surface of the ground.

Through the wide gate entrance, which was continually open, motor vehicles hauling ice and
persons buying said commodity passed, and any one could easily enter the said factory, as he
pleased.

There was no guard assigned on the gate.

One day, the 3-year old- Mario Balandan was playing with and in company of other boys of his
age, entered the factory premises through the gate, to take a bath in one of said tanks; but he
drowned and died.

CFI and CA maintained that the tanks are considered “attractive nuisance” and neglected to adopt
the necessary precautions to avoid accident to persons entering its premises.

The attractive nuisance doctrine states that:

One who maintains on his premises dangerous instrumentalities or appliances of a character

likely to attract children in play, and who fails to exercise ordinary care to prevent children from
playing therewith or resorting thereto, is liable to a child of tender years who is injured thereby,
even if the child is technically a trespasser in the premises.

The principal reason for the doctrine is that the condition or appliance in question although its
danger is apparent to those of age, is so enticing or alluring to children of tender years as to
induce them to approach, get on or use it, and this' attractiveness is an implied invitation to such
children.

Issue: w/n a swimming pool or water tank an instrumentality or appliance likely to attract little
children in play? In other words is the body of water an attractive nuisance?

Held: No – PH adopts American Jurisprudence.

American Jurisprudence – NO. The attractive nuisance doctrine generally is not applicable to
bodies of water, artificial as well as natural, in the absence of some unusual condition or artificial
feature other than the mere water and its location.

The reason why a swimming pool or pond or reservoir of water is not considered an attractive
nuisance was lucidly explained by the Indiana Appellate Court as follows:

"Nature has created streams, lakes and pools which attract children. Lurking in their waters is
always the danger of drowning. Against this danger children are early instructed so that they are
sufficiently presumed to know the danger; and if the owner of private property creates an artificial
pool on his own property, merely duplicating the work of nature without adding any new danger,
* * * (he) is not liable because of having created an 'attractive nuisance.'

Therefore, as petitioner's tanks are not classified as attractive nuisance, the question whether the
petitioner had taken reasonable precautions becomes immaterial. And the other issue submitted
by petitioner—that the parents of the boy were guilty of contributory negligence precluding
recovery, because they left for Manila on that unlucky day leaving their son under the care of no
responsible individual—needs no further discussion.

Pablo Dissenting:
It is evident that the appellant should have enclosed said ponds as an ordinary precautionary
measure so that young children cannot enter, Children are naturally curious and eight year olds
they do not have perfect knowledge of things. Amazed by the natural attraction of the waters, they
will get into them with danger of their lives, unless there is something that prevent.

Ayala vs Barreto (33 Phil 538) (NASA BOOK THO, PAGE 240)
TOPIC:
DOCTRINE:
SUMMARY:
FACTS:
ISSUE:
RULING:

Sitchon vs. Aquino (98 Phil 458)

TOPIC: Public Nuisance, Demolishing of buildings that are public nuisance without the need of
public hearing and notice.

DOCTRINE: The police power of the state justifies the abatement or destruction, by summary
proceedings, of whatever may be regarded as a public nuisance; and the legislature may
authorize the summary abatement of a nuisance without judicial process or proceeding.

SUMMARY: This is a consolidation of 6 class suits whereby petitioners assail the order of the
City Engineer to demolish their houses which was declared as Public nuisance. Their houses
were built without the consent of authorities and they were only given 1 month to leave the
premises and the City engineer would effect the demolition. Petitioners filed an injunction
contending that they are not given due process as the order of demolition did not follow proper
notice and hearing. The court however ruled that the police power of the state justifies the
abatement or destruction, by summary proceedings without judicial process or proceedings
despite due process clause.

FACTS: Petitioners Sitchon et al, occupied portions of the public street of Calabash Road in the
City of Manila and constructed houses thereon without the consent of the authorities. It should be
noted that the constructions were such that the roads and drainage on both sides thereof were
obstructed. In some places, the ditches used for drainage purposes were completely obliterated.
What is more, said ditches cannot be opened, repaired or placed in proper condition because of
said houses Later on, some of them paid “concession fees or damages, for the use” of said
portions of the street, to a collector of the city treasurer, who issued receipts with an annotation
reading: “without prejudice to the order to vacate.”
However 4 years later, the respondent City Engineer advised and ordered them to vacate the
place and remove their houses therefrom within 1 month with the warning that otherwise he would
effect the demolition of said houses at their expense.

6 class suits were filed against the City Engineer of Manila to enjoin him from carrying out his
threat to demolish the houses of petitioners herein upon the ground that said houses constitute
public nuisances.

CFI Manila in its decision ruled against the petitioners declaring that the houses were a public
nuisance.

Petitioners contend that said decisions should be reversed upon the ground that, in trying to
demolish their respective houses without notice and hearing, the city engineer sought to deprive
them of their property without due process of law, apart from the fact that, under Articles 701 and
702 of the new Civil Code, the power to remove public nuisances is vested in the district health
officer, not in respondent city engineer.

Respondent on the other hand countered that that, before expressing his intent to demolish the
houses in question, respondent had advised and ordered the petitioners to remove said houses,
within the periods stated in the corresponding notices; that petitioners do not question, and have
not questioned, the reasonableness or sufficiency of said periods; and that they have never asked
respondent herein to give them an opportunity to show that their houses do not constitute public
nuisances. Besides, itis not disputed that said houses are standing on public streets, with the
exception of the houses involved in which are built on portions of riverbeds. It is clear, therefore,
that said houses are public nuisances, pursuant to Articles 694 and 695 of the Civil Code.

ISSUE: Whether the houses built on the streets provided in the ordinance are Public nuisance
and shall be demolished even without hearing.

RULING: YES. Houses constructed, without governmental authority, on public streets and
waterways, obstruct at all times the free use by the public of said streets and waterways, and,
accordingly, constitute nuisances per se, aside from public nuisances. As such, the summary
removal thereof, without judicial process or proceedings may be authorized by the statute or
municipal ordinance, despite the due process clause.

“The police power of the state justifies the abatement or destruction, by summary proceedings, of
whatever may be regarded as a public nuisance; and the legislature may authorize the summary
abatement of a nuisance without judicial process or proceeding. When necessary to insure the
public safety, the legislature may under its police power authorize municipal authorities summarily
to destroy property without legal process or previous notice to the owner. It is not an objection to
the validity of a police regulation that it does not provide for a hearing or for notice to the owner
before his property is subjected to restraint or destruction.
“In the exercise of the police power the state may authorize its officers summarily to abate public
nuisances without resort to legal proceedings and without notice or a hearing. Municipal
Corporations generally have power to cause the abatement of public nuisances summarily without
resort to legal proceedings.”
FAROLAN v SOLMAC MARKETING CORPORATION G.R. No. 83589 March 13,
1991

FACTS: Solmac Marketing Corporation was the assignee, transferee, and owner of an
importation of Clojus Recycling Plastic Products of what is technically known as
polypropylene film. Without defect, polypropylene film is sold at a much higher price as
prime quality film. Once rejected as defective due to blemishes, discoloration, defective
winding, holes, etc., polypropylene film is sold at a relatively cheap price without
guarantee or return, and the buyer takes the risk as to whether he can recover an average
30% to 50% usable matter. This latter kind of polypropylene is known as OPP film
waste/scrap and this is what respondent SOLMAC claimed the Clojus shipment to be.
The subject importation, consisting of seventeen (17) containers, arrived in December,
1981. Upon application for entry, the Bureau of Customs asked respondent SOLMAC for
its authority from any government agency to import the goods described in the bill of
lading upon examination of the shipment by the National Institute of Science and
Technology (NIST), it turned out that the fibers of the importation were oriented in such
a way that the materials were stronger than OPP film scrap. In other words, the Clojus
shipment was not OPP film scrap, as declared by the assignee respondent SOLMAC to the
Bureau of Customs and BOI Governor Lilia R. Bautista, but oriented polypropylene the
importation of which is restricted, if not prohibited.

DECISION OF LOWER COURTS:

1. Commissioner of Customs: Considering that the shipment was different from what had
been authorized by the BOI and by law, petitioners Parayno and Farolan withheld the
release of the subject importation.
2.Board of Investments: subject imports may be released but that holes may be drilled on
them by the Bureau of Customs prior to their release. Respondent Solmac filed the action
for mandamus and injunction with the RTC as above mentioned.
3. RTC: P100,000.00 and P50,000.00 for exemplary damages and attorney's fees and
litigation expenses
4. Court of Appeals: adjudged these public officers to pay solidarily and in their private
personal capacities respondent Solmac Marketing Corporation temperate damages in the
sum of P100,000.00, exemplary damages in the sum of P50,000.00, and P25,000.00, as
attorney's fees and expenses of litigation.

ISSUE: whether or not the petitioners acted in good faith in not immediately releasing
the questioned importation, or, simply, can they be held liable, in their personal and
private capacities, for damages to the private respondent.

RULING:
Yes. Thus, they cannot be held liable.

There is no clear and convincing proof showing the alleged bad faith of the petitioners.
On the contrary, the record is replete with evidence bolstering the petitioners' claim of
good faith.
 1. on the strength of the National Institute of Science and Technology (NIST) finding
that the petitioners withheld the release of the subject importation for being
contrary to law
2. Bureau of Customs sought the advice of the BOI on whether the subject
importation might be released.
3. Parayno also testified during the trial that up to that time (of the trial) there was
no clear-cut policy on the part of the BOI
regarding the entry into the Philippines of oriented polypropylene (OPP)

The confusion over the disposition of this particular importation obviates bad faith.
When a public officer takes his oath of office, he binds himself to perform the
duties of his office faithfully and to use reasonable skill and diligence, and to
act primarily for the benefit of the public. Good faith: "refer[ring] to a state
of the mind which is manifested by the acts of the individual concerned. It
consists of the honest intention to abstain from taking an unconscionable
and unscrupulous advantage of another. It is the opposite of fraud, and its
absence should be established by convincing evidence."
It is the duty of the Court to see to it that public officers are not hampered in
the performance of their duties or in making decisions for fear of personal
liability for damages due to honest mistake. Whatever damage they may have
caused as a result of such an erroneous interpretation, if any at all, is in the
nature of a damnum absque injuria. Mistakes concededly committed by
public officers are not actionable absent any clear showing that they were
motivated by malice or gross negligence amounting to bad faith. After all,
"even under the law of public officers, the acts of the petitioners are
protected by the presumption of good faith. The presumption, disputable though
it may be, that an official duty has been regularly performed applies in favor of the
petitioners. Omnia praesumuntur rite et solemniter esse acta. (All things are presumed
to be correctly and solemnly done.) It was private respondent's burden to overcome
this juris tantum (rebuttable) presumption.

VILLA REY TRANSIT vs CA

Facts: Petitioner Villa Rey Transit Inc., due to the negligence of its bus
driver, was involved in a vehicular accident resulted to the death of
Policronio Quintos, Jr., Private respondents’ brother. The private
respondents brought this action against herein petitioner as owner and
operator of said passenger bus. The RTC ruled in favor of the
Respondents and that the mishap was not the result of any
unforeseeable fortuitous event or emergency but was the direct result
of the negligence of the driver of the defendant. The defendant must,
therefore, respond for damages resulting from its breach of contract for
carriage. As the complaint alleged a total damage of only P63,750.00.
Aggrieved, petitioner went to the CA to reverse the decision of the RTC.
CA affirmed the decision of the RTC, hence this case.

Issue: Whether the RTC erred in computing the compensatory damages

awarded to the respondents?

Held: Yes, the Court ruled that the CA affirming the award in toto is
erroneous, and modified the amount awarded to the respondents. Thus,
life expectancy is, not only relevant, but, also, an important element in
fixing the amount recoverable by private respondents herein. Although
it is not the sole element determinative of said amount, no cogent
reason has been given to warrant its disregard and the adoption, in this
case, of a purely arbitrary standard, such as a four-year rule. In short,
the Court of Appeals has not erred in basing the computation of
petitioner’s liability upon the life expectancy of Policronio Quintos, Jr..

It should be noted, also, that the Court are mainly concerned with the
determination of the losses or damages sustained by the private
respondents, as dependents and intestate heirs of the deceased, and
that said damages consist, not of the full amount of his earnings, but of
the support, they received or would have received from him had he not
died in consequence of the negligence of petitioner’s agent. In fixing
the amount of that support, We must reckon with the “necessary
expenses of his own living”, which should be deducted from his
earnings. Thus, it has been consistently held that earning capacity, as an
element of damages to one’s estate for his death by wrongful act is
necessarily his net earning capacity or his capacity to acquire money,
“less the necessary expense for his own living. Stated otherwise, the
amount recoverable is not loss of the entire earning, but rather the loss
of that portion of the earnings which the beneficiary would have
received. In other words, only net earnings, not gross earning, are to be
considered that is, the total of the earnings less expenses necessary in
the creation of such earnings or income and less living and other
incidental expenses.

DAVILA vs PAL
Facts: There was a plane crash that involved PAL’s planes, the route of which was fromIloilo-Romblon-
Manila. It crashed at Mt. Baco, Mindoro, one hour and fifteen minutes after take-off. All passengers and
crew of the said plane died. The plane in this case was a DC-3 type of aircraft, manufactured in 1942 and
acquired by the defendant in 1948. It had flown almost 18,000 hours at the time of its ill-fated flight. Despite
its age, however, it had been certified as airworthy by theCivil Aeronautics Administration. The petitioners
of this case are the parents of Pedro Avila Jr. who was one of the passengers of this flight. At the time of
his death, he was single and 30 years of age. His life expectancy was 25 years. The route prescribed by
the Civil Aeronautics Administration for the flight of the plane in the afternoon of November 23, 1960 was
Iloilo-Romblon-Manila, the latter stage, denominated as airway "Amber I," being a straight lane from
Romblon toManila. The prescribed elevation of the flight was 6,000 ft. The plane reported its position after
take-off and again when it was abeam the Roxas homer. However, it did not intercept the airway "Amber I"
over Romblon as it was supposed to do, and the pilot did not give his position then although Romblon was
a compulsory checking point. The fact was that the plane had deviated from the prescribed route by 32miles
to the west when it crashed at Mt. Baco. The reading of the altimeter of the plane when its wreckage was
found was 6,800 ft.It was suggested that in the course of the flight between Romblon and Mindoro the
aircraft was drifted westward by the cross-winds then blowing in the region. Thedefendant, however, has
not given a definite explanation as to why, if such was the case, the pilot failed to make the necessary
correction in his flight to compensate for the drift. According to the defendant's witness, Maj. Mijares, Chief
of the Aviation Safety Division of the Civil Aeronautics Administration and Chairman of the CAAInvestigating
Committee, there was a navigational error, to which several factors contributed: "the weather observation
at that time from the Weather Bureau was not so good between Mt. Baco and Romblon and the wind aloft
was quite strong,which would be also one of the causes for the drifting of the aircraft; and the other strong
probability, I would say, would be the malfunction of the aircraft navigational instrument." He further
explained that "a cross-wind can drift the plane if the pilot will not make the necessary correction, if his
navigational instrument is malfunctioning and the visual reference outside the aircraft could not make the
necessary corrections." There is nothing in the testimony of Maj. Mijares to show just how strong the cross-
winds were in the region at the time, although in the investigation of the accident by the Senate Committee
on transportation there was testimony that the cross-winds had a velocity of either 20 to 25 knots or 25 to
35 knots an hour. Considering The relatively short distance from Romblon to Mt. Baco and the brief span
of time it would take to fly that distance, cross-winds with the velocity stated could not have possibly
deviated the plane by as much as 32 miles.What is undisputed therefore is that the pilot did not follow the
route prescribed for his flight, at least between Romblon and Manila. Since up to that point overRomblon,
where he was supposed to intersect airway "Amber I" the weather was clear, the most reasonable
conclusion is that his failure to do so was intentional,and that he probably wanted to fly on a straight line to
Manila. It was a violation of air-craft traffic rules to which, under the circumstances, the accident may be
directly attributable.So, the Davila spouses filed an action for damages against PAL for the death of their
son, and the CFI – Iloilo awarded the spouses the following sums:(1) For the death of Pedro T. Davila, Jr.
the amount of P6,000.00;(2) For the loss of the earning capacity of the deceased at the rate of
P12,000.00per annum for five (5) years in the amount of Sixty Thousand Pesos. (P60,000.00);(3) For moral
damages in favor of the plaintiffs Ten Thousand Pesos (P10,000.00);(4) For exemplary damages in the
amount of Ten Thousand Pesos (P10,000.00);(5) For actual damages the amount of Five Thousand Pesos
(P5,000.00) broken down to as follows: A rolex watch valued at P600.00; a pistol worth P300.00; burial
expenses P600.00; for the lot and the mausoleum P3,500.00;(6) For Attorney's fees the amount of Ten
Thousand Pesos (P10,000.00) or a total amount of One Hundred and One Thousand Pesos (P101,000.00)
To pay the costs of this proceedings. The Davila spouses appealed this ruling directly to the Supreme Court
asking for an increase in the indemnity awarded for the death of their son, while PAL asked for exoneration,
if not mitigation, of such liability.

Issue: How much should be awarded to the Davila spouses, if any?

Held: According to Article 2206, paragraph (1), of the Civil Code, "the defendant shall be liable for the loss
of the earning capacity of the deceased and indemnity shall be paid to the heirs of the latter." This Article,
while referring to "damages for death caused by crime or quasi-delict," is expressly made applicable by
Article 1764"to the death of a passenger caused by the breach of contract by a common carrier." The
deceased, Pedro Davila, Jr., was single and 30 years of age when he died. At What age one's normal life
expectancy is 33-1/3 years, according to the formula (2/3x [80-30]) adopted by this Court in the case of
Villa Rey Transit, Inc. vs. Court of Appeals on the basis of the American Expectancy Table of Mortality or
the Actuarialof Combined Experience Table of Mortality. However, although the deceased was in relatively
good health, his medical history shows that he had complained of andbeen treated for such ailments as
backaches, chest pains and occasional feelings of tiredness. It is reasonable to make an allowance for
these circumstances and consider, for purposes of this case, a reduction of his life expectancy to 25 years.In
the same case of Villa Revenue Transit this Court stated:"... earning capacity, as an element of damages
to one's estate for his death by wrongful act is necessarily his net earning capacity or his capacity to acquire
money, less the necessary expense for his own living. Stated otherwise, the amount recoverable is not loss
of the entire earnings, but rather the loss of that portion of the earnings which the beneficiary would have
received. In other words, only net earnings, not gross earnings, are to be considered, that is, the total of
the earning less expenses necessary in the creation of such earnings or income and less living and other
incidental expenses."Considering the fact that the deceased was getting his income from three (3)different
sources, namely from managing a radio station, from law practice and from farming, the expenses incidental
to the generation of such income were necessarily more than if he had only one source. Together with his
living expenses,a deduction of P600.00 a month, or P7,200.00 a year, seems to Us reasonable,leaving a
net yearly income of P7,800.00. This amount, multiplied by 25 years, orP195,000.00 is the amount which
should be awarded to the plaintiffs in this particular respect.

Jose MENDOZA vs. PAL No. L-3678, Feb 29, 1952 J. Montemayor

DOCTRINE: Common carriers are not obligated by law to carry and to deliver merchandise, and
persons are not vested with the right of prompt delivery, unless such common carriers previously
assume the obligation. Said rights and obligations are created by a specific contract entered into
by the parties.

FACTS: Jose Mendoza was the owner of the Cita Theater in Naga, Camarines Sur. Appellant,
taking advantage of the fiesta or town holiday of the City of Naga, held on September 17 and 18,
yearly, which was usually attended by many people, decided to exhibit a film which would fit the
occasion and have a special attraction and significance to the people attending said fiesta. A month
before the holiday, he contracted with the LVN pictures, Inc., a movie producer in Manila for him
to show during the town fiesta the Tagalog film entitled "Himala ng Birhen" or Miracle of the
Virgin. He made extensive preparations including advertisements. On September 17, 1948, LVN
pictures delivered to the defendant Philippine Airlines (PAL a can containing the film "Himala ng
Birhen" consigned to the Cita Theater. However, For reasons not explained by the defendant, but
which would appear to be the fault of its employees or agents, this can of film was not unloaded
at Pili Air Port a little after four o'clock in the afternoon of September 17th and it was brought
back to Manila. Mendoza received it on September 20 and exhibited the film but he had missed
his opportunity to realize a large profit as he expected for the people after the fiesta had already
left for their towns. Consequently, Mendoza brought this action against the PAL. The lower court
held that PAL is not liable.

ISSUES: (1) WON Mendoza, PAL, and LVN Pictures entered into a contract of transportation. (2)
WON PAL may be held liable for damages.

RULING: (1) Yes, they entered into a contract of transportation. Common carriers are not
obligated by law to carry and to deliver merchandise, and persons are not vested with the right of
prompt delivery, unless such common carriers previously assume the obligation. Said rights and
obligations are created by a specific contract entered into by the parties. In the present case, the
findings of the trial court which as already stated, are accepted by the parties and which we must
accept are to the effect that the LVN Pictures Inc. and Jose Mendoza on one side, and the defendant
company on the other, entered into a contract of transportation. Here, the contract of carriage
between the LVN Pictures Inc. and the defendant carrier contains the stipulations of the delivery
to Mendoza as consignee. His demand for the delivery of the can of film to him at the Pili Air Port
may be regarded as a notice of his acceptance of the stipulation of the delivery in his favor
contained in the contract of carriage, such demand being one of the fulfillment of the contract of
carriage and delivery. In this case he also made himself a party to the contract, or at least has come
to court to enforce it. His cause of action must necessarily be founded on its breach.

(2) No, PAL may not be held liable for damages. The trial court correctly found that the defendant
company could not have foreseen the damages that would be suffered by Mendoza upon failure to
deliver the can of film on the 17th of September, 1948 for the reason that the plans of Mendoza to
exhibit that film during the town fiesta and his preparations, specially the announcement of said
exhibition by posters and advertisement in the newspaper, were not called to the defendant's
attention. In the similar case of Chapman vs. Fargo, a New York case,it was held: "but before
defendant could be held to special damages, such as the present alleged loss of profits on account
of clelay or failure of delivery, it must have appeared that he had notice at the time of delivery to
him of the particular circumstances attending the shipment, and which probably would lead to such
special loss if he defaulted." The decision appealed from is affirmed.

Marchan vs. Mendoza G.R. No. L-24471

FACTS: A passenger bus of the Philippine Rabbit Bus Lines, driven by Silverio Marchan, fell into a ditch
while travelling on its way to Manila. As a result of which respondents Arsenio Mendoza, his wife and child,
passengers of the said bus were thrown out to the ground resulting in their multiple injuries. It was proven
that the bus was traveling at high speed without due regard to the safety of its passengers and that
passengers complained and asked Machan, the driver to slow down. On the contrary, Marchan increased
its speed while approaching a truck which was then parked, apparently to avoid collision with the incoming
vehicle from the opposite direction. The rear tires of the bus skidded because of its high speed which
caused the bus to fall into a ditch. Subsequently, Marchan was convicted for physical injuries through
reckless imprudence.

ISSUE: Whether or not Marchan and Philippine Rabbit Bus Lines are liable for the injuries suffered by its
passengers.

RULING: The Supreme Court held that the proximate cause of the accident was the gross negligence of
Marchan who when driving is expected to have employed the highest degree of care. He should have been
assiduously prudent in handling his vehicle to insure the safety of his passengers. There is no reason why
he shouldn’t stop the vehicle upon noticing a parked truck in front of him. He must have taken precautionary
measures in securing the safety of his passengers. Philippine Rabbit is also liable because common carriers
cannot escape liability for the death or injuries to passengers through the negligence and willful acts of the
former's employees, although such employees may have acted beyond the scope of their authority or in
violation of the orders. The awarding of compensatory damages is reasonable because Arsenio Mendoza
had suffered paralysis on the lower extremities, which will incapacitate him to engage in his customary
occupation throughout the remaining years of his life. The awarding of exemplary damages likewise is found
just although the plaintiffs did not specify such claim. The court is called upon the exercise and can use its
discretion in the imposition of punitive or exemplary damages even though not expressly prayed or pleaded
in the plaintiffs' complaint.

Lopez v. Pan American World Airways

Facts:

Reservation for first class accommodation in Pan American Airlines from

Tokyo to San Francisco was made by Delfin Faustino for then Senator
Fernando Lopez and company. First class tickets were issued and paid
for. The party left Manila for Tokyo as scheduled. Senator Lopez
requested Minister Busuego to contact the airlines regarding their
accommodation. However, they were informed that there was no
accommodation for them. Because of some urgent matters to attend to
in San Francisco, they were constrained to take the tourist flight “under
protest”.

Issues:

(1) Whether the defendant acted in bad faith for deliberate refusal to
comply with its contract to provide first-class accommodation to the
plaintiff

(2) Whether moral and exemplary damages should be awarded

Held:

(1) From the evidence of defendant it is in effect admitted that

defendant - through its agents - first cancelled plaintiffs, reservations
by mistake and thereafter deliberately and intentionally withheld from
plaintiffs or their travel agent the fact of said cancellation, letting them
go on believing that their first class reservations stood valid and
confirmed. In so misleading plaintiffs into purchasing first class tickets
in the conviction that they had confirmed reservations for the same,
when in fact they had none, defendant wilfully and knowingly placed
itself into the position of having to breach its a foresaid contracts with
plaintiffs should there be no last-minute cancellation by other
passengers before flight time, as it turned out in this case. Such
actuation of defendant may indeed have been prompted by nothing
more than the promotion of its self-interest in holding on to Senator
Lopez and party as passengers in its flight and foreclosing on their
chances to seek the services of other airlines that may have been able
to afford them first class accommodations. All the time, in legal
contemplation such conduct already amounts to action in bad faith. For
bad faith means a breach of a known duty through some motive of
interest or ill-will.

At the time plaintiffs bought their tickets, defendant, therefore, in

breach of its known duty, made plaintiffs believe that their reservation
had not been cancelled. Such willful-non-disclosure of the cancellation
or pretense that the reservations for plaintiffs stood - and not simply
the erroneous cancellation itself - is the factor to which is attributable
the breach of the resulting contracts. And, as above-stated, in this
respect defendant clearly acted in bad faith.

(2) First, then, as to moral damages. As a proximate result of defendant's

breach in bad faith of its contracts with plaintiffs, the latter suffered
social humiliation, wounded feelings, serious anxiety and mental
anguish. For plaintiffs were travelling with first class tickets issued by
defendant and yet they were given only the tourist class. At stop-overs,
they were expected to be among the first-class passengers by those
awaiting to welcome them, only to be found among the tourist
passengers. It may not be humiliating to travel as tourist passengers; it
is humiliating to be compelled to travel as such, contrary to what is
rightfully to be expected from the contractual undertaking.

The rationale behind exemplary or corrective damages is, as the name

implies, to provide an example or correction for public good. Defendant
having breached its contracts in bad faith, the court, as stated earlier,
may award exemplary damages in addition to moral damages. In view
of its nature, it should be imposed in such an amount as to sufficiently
and effectively deter similar breach of contracts in the future by
defendant or other airlines. In this light, we find it just to award
P75,000.00 as exemplary or corrective damages.
ARCO PULP v. DAN T. LIM, GR No. 206806, 2014-06-25
Facts:
Dan T. Lim works in the business of supplying scrap papers, cartons, and other raw
materials, under the name Quality Paper and Plastic Products, Enterprises, to factories
engaged in the paper mill business.[4] From February 2007 to March 2007, he delivered...
scrap papers worth P7,220,968.31 to Arco Pulp and Paper Company, Inc. (Arco Pulp and
Paper) through its Chief Executive Officer and President, Candida A. Santos.[5] The parties
allegedly agreed that Arco Pulp and Paper would either pay Dan T. Lim the value... of the
raw materials or deliver to him their finished products of equivalent value.[6]
Dan T. Lim alleged that when he delivered the raw materials, Arco Pulp and Paper issued a
post-dated check dated April 18, 2007[7] in the amount of P1,487,766.68 as partial
payment, with the assurance that the check would not bounce.[8] When he deposited the
check on April 18, 2007, it was dishonored for being drawn against a closed account.[9]
On the same day, Arco Pulp and Paper and a certain Eric Sy executed a memorandum of
agreement[10] where Arco Pulp and Paper bound themselves to deliver their finished
products to Megapack Container Corporation, owned by Eric Sy, for his account.
According... to the memorandum, the raw materials would be supplied by Dan T. Lim,
through... his company, Quality Paper and Plastic Products.
On
May 5, 2007, Dan T. Lim sent a letter[12] to Arco Pulp and Paper demanding payment of
the amount of ?7,220,968.31, but no payment was made to him.[13]
Dan T. Lim filed a complaint[14] for collection of sum of money with prayer for attachment
with the Regional Trial Court, Branch 171, Valenzuela City, on May 28, 2007. Arco Pulp and
Paper filed its answer[15] but failed to have its... representatives attend the pre-trial hearing.
Hence, the trial court allowed Dan T. Lim to present his evidence ex parte.[16]
Dan T. Lim appealed[18] the judgment with the Court of Appeals. According to him,
novation did not take place since the memorandum of agreement between Arco Pulp and
Paper and Eric Sy was an exclusive and private agreement between them. He argued that
if... his name was mentioned in the contract, it was only for supplying the parties their
required scrap papers, where his conformity through a separate contract was
indispensable.[19]
On January 11, 2013, the Court of Appeals[20] rendered a decision[21] reversing and
setting aside the judgment dated September 19, 2008 and ordering Arco Pulp and Paper to
jointly and severally pay Dan T. Lim the amount of
P7,220,968.31 with interest at 12% per annum from the time of demand; P50,000.00 moral
damages; P50,000.00 exemplary damages; and P50,000.00 attorney's fees.[22]
The appellate court ruled that the facts and circumstances in this case clearly showed the
existence of an alternative obligation.[23] It also ruled that Dan T. Lim was entitled to
damages and attorney's fees due to the bad faith exhibited by Arco Pulp and
Paper in not honoring its undertaking.[24]
Respondent, on the other hand, argues that the Court of Appeals was correct in ruling that
there was no proper novation in this case. He argues that the Court of Appeals was correct
in ordering the payment of ?7,220,968.31 with damages since the debt of petitioners
remains... unpaid.[28] He also argues that the Court of Appeals was correct in holding
petitioners solidarily liable since petitioner Candida A. Santos was "the prime mover for
such outstanding corporate liability."[29]
In their reply, petitioners reiterate that novation took place since there was nothing in the
memorandum of agreement showing that the obligation was alternative. They also argue
that when respondent allowed them to deliver the finished products to Eric Sy, the original...
obligation was novated.[30]
Issues:
The issues to be resolved by this court are as follows:
1. Whether the obligation between the parties was extinguished by novation
2. Whether Candida A. Santos was solidarily liable with Arco Pulp and Paper Co., Inc.
3. Whether moral damages, exemplary damages, and attorney's fees can be awarded
Ruling:
The petition is denied.
The obligation between the... parties was an alternative... obligation
"In an alternative obligation, there is more than one object, and the fulfillment of one is
sufficient, determined by the choice of the debtor who generally has the right of
election."[32] The right of election is extinguished when the party who may... exercise that
option categorically and unequivocally makes his or her choice known.[33] The choice of
the debtor must also be communicated to the creditor who must receive notice of it since:
The object of this notice is to give the creditor . . . opportunity to express his consent, or to
impugn the election made by the debtor, and only after said notice shall the election take
legal effect when consented by the creditor, or if impugned by the latter,... when declared
proper by a competent court.[34]
According to the factual findings of the trial court and the appellate court, the original
contract between the parties was for respondent to deliver scrap papers worth
P7,220,968.31 to petitioner Arco Pulp and Paper. The payment for this delivery became
petitioner Arco Pulp and
Paper's obligation. By agreement, petitioner Arco Pulp and Paper, as the debtor, had the
option to either (1) pay the price or (2) deliver the finished products of equivalent value to
respondent.[35
The appellate court, therefore, correctly identified the obligation between the parties as an
alternative obligation, whereby petitioner Arco Pulp and Paper, after receiving the raw
materials from respondent, would either pay him the price of the raw materials or, in the...
alternative, deliver to him the finished products of equivalent value.
The trial court erroneously ruled that the execution of the memorandum of agreement
constituted a novation of the contract between the parties. When petitioner Arco Pulp and
Paper opted instead to deliver the finished products to a third person, it did not novate the
original... obligation between the parties.
Petitioner Arco Pulp and Paper's act of tendering partial payment to respondent also
conflicts with their alleged intent to pass on their obligation to Eric Sy. When respondent
sent his letter of demand to petitioner Arco Pulp and Paper, and not to Eric Sy, it showed
that the... former neither acknowledged nor consented to the latter as his new debtor. These
acts, when taken together, clearly show that novation did not take place.
Since there was no novation, petitioner Arco Pulp and Paper's obligation to respondent
remains valid and existing. Petitioner Arco Pulp and Paper, therefore, must still pay
respondent the full amount of P7,220,968.31.
Petitioners are liable for damages
Under Article 2220 of the Civil Code, moral damages may be awarded in case of breach of
contract where the breach is due to fraud or bad faith:
Since a finding of bad faith is generally premised on the intent of the doer, it requires an
examination of the circumstances in each case.
When petitioner Arco Pulp and Paper issued a check in partial payment of its obligation to
respondent, it was presumably with the knowledge that it was being drawn against a closed
account. Worse, it attempted to shift their obligations to a third person without the consent
of... respondent.
Petitioner Arco Pulp and Paper's actions clearly show "a dishonest purpose or some moral
obliquity and conscious doing of a wrong, a breach of known duty through some motive or
interest or ill will that partakes of the nature of fraud."[48] Moral damages... may, therefore,
be awarded.
According to these guidelines, the interest due on the obligation of P7,220,968.31 should
now be at 6% per annum, computed from May 5, 2007, when respondent sent his letter of
demand to petitioners. This interest shall continue to be due from the finality of this decision
until... its full satisfaction.
WHEREFORE, the petition is DENIED in part. The decision in CA-G.R. CV No. 95709 is
AFFIRMED.
Petitioners Arco Pulp & Paper Co., Inc. and Candida A. Santos are hereby ordered
solidarily to pay respondent Dan T. Lim the amount of P7,220,968.31 with interest of 6% per
annum at the time of demand until finality of judgment and its full satisfaction, with moral
damages... in the amount of P50,000.00, exemplary damages in the amount of P50,000.00,
and attorney's fees in the amount of P50,000.00.
SO ORDERED.

SEVEN BROTHERS SHIPPING CORPORATION vs. DMC-CONSTRUCTION RESOURCES, INC. G.R.

No. 193914. November 26, 2014, C.J. Sereno

Petitioner questions the decision of the CA awarding respondent nominal damages after having ruled that
the actual damages awarded by the RTC was unfounded. Petitioner argues that nominal damages are only
awarded to vindicate a right that has been violated and not to indemnify a party for any loss suffered by the
latter. The SC ruled that what should have been awarded was temperate and not nominal damages.
Temperate or moderate 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. Considering
that it has been established that respondent suffered a loss, even if the amount thereof cannot be proven
with certainty, the Court ruled that what should have been awarded was temperate damages.

FACTS: On February 23, 1996, the cargo ship M/V “Diamond Rabbit” (the Vessel) owned and operated by
Petitioner Seven Brothers Shipping Corporation was anchored at the causeway of the port of Bislig.

The Master of the vessel, however, decided to go to PICOP Pier in Surigao del Sur to dock there. Due to
the bad weather that day, the vessel, while sailing to PICOP Pier, experienced some difficulties in
maneuvering and controlling its engine. Thus, in order to stop the vessel from drifting and swinging, its
Master decided to drop the starboard anchor. However, the uncontrollable and unmaneuverable vessel
drifted and dragged its anchor until it hit several structures at the pier. One of the structures it hit was the
coal conveyor facility owned by respondent DMC.

Thereafter, DMC sent a formal demand letter to petitioner Seven Brothers claiming damages for the
destruction of its vessel. Petitioner Seven Brothers, however, failed to pay DMC prompting the latter to file
a complaint for damages against it before the RTC.

Finding negligence on the part of the vessel’s captain, the RTC ruled in favor of DMC and awarded it actual
damages in the amount of P3,523,179.92. On appeal, the CA affirmed the decision of the RTC but modified
the nature of the damages awarded, from actual to nominal, on the premise that actual damages had not
been proved. Hence, the instant petition wherein Petitioner Seven Brothers argues that under Articles 2221
and 2223 of the Civil Code, nominal damages are only awarded to vindicate or recognize a right that has
been violated, and not to indemnify a party for any loss suffered by the latter. They are not awarded as a
simple replacement for actual damages that were not duly proven during trial. Petitioner Seven Brother
further contends that assuming that nominal damages were properly awarded by the CA, Petitioner Seven
Brothers is of the belief that the amount thereof must be equal or at least commensurate to the injury
sustained by the claimant. Considering that respondent DMC failed to substantiate its actual loss, it was
therefore improper for the CA to award nominal damages of 3,523,175.92, which was based on DMC’s
“highly speculative claims.”

ISSUE Whether the CA erred in awarding nominal damages to DMC.

RULING Yes. The Court ruled that temperate, and not nominal, damages should be awarded to DMC in
the amount of P3,523,175.92.

In this case, two facts have been established by the appellate and trial courts: that DMC suffered a loss
caused by petitioner Seven Brothers; and that DMC failed to sufficiently establish the amount due to him,
as no actual receipt was presented.
Temperate or moderate 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.

Under the Civil Code, when an injury has been sustained, actual damages may be awarded under the
following condition: Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he has duly proved. Such compensation is
referred to as actual or compensatory damages.

Jurisprudence has consistently held that “[t]o justify an award of actual damages x x x credence can be
given only to claims which are duly supported by receipts.” The Court takes this to mean by credible
evidence. Otherwise, the law mandates that other forms of damages must be awarded, to wit: Art. 2216.
No proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplary
damages, may be adjudicated. The assessment of such damages, except liquidated ones, is left to the
discretion of the court, according to the circumstances of each case. Under Article 2221 of the Civil Code,
nominal damages may be awarded in order that the plaintiff’s right, which has been violated or invaded by
the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any
loss suffered. The Court has laid down the concept of nominal damages in the following wise:

Nominal damages are ‘recoverable where a 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.’

In contrast, under Article 2224, temperate or moderate 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. This principle was thoroughly explained in Araneta v. Bank of America, which cited the Code
Commission, to wit: The Code Commission, in explaining the concept of temperate damages under Article
2224, makes the following comment: In some States of the American Union, temperate damages are
allowed. There are cases where from the nature of the case, definite proof of pecuniary loss cannot be
offered, although the court is convinced that there has been such loss. For instance, injury to one's
commercial credit or to the goodwill of a business firm is often hard to show with certainty in terms of money.
Should damages be denied for that reason? The judge should be empowered to calculate moderate
damages in such cases, rather than that the plaintiff should suffer, without redress from the defendant's
wrongful act.

Given these findings, the Court is of the belief that temperate and not nominal damages should have been
awarded, considering that it has been established that DMC suffered a loss, even if the amount thereof
cannot be proven with certainty.
Werr Corporation International shall pay petitioner Highlands
Prime, Inc. liquidated damages.

Facts: Highlands Prime, Inc. (HPI) and Werr Corporation

International (Werr) are domestic corporations engaged in
property development and construction, respectively. For the
construction of 54 residential units contained in three clusters
of five-storey condominium structures, known as “The Horizon-
Westridge Project,” in Tagaytay. The project was not completed
on the last extension given. Thus, HPI terminated its contract
with Werr.

Not having received any payment, Werr filed a Complaint for

arbitration against HPI before the CIAC to recover the
₱14,834,926.71 representing the balance of its retention money.
In its Answer, HPI countered that it does not owe Werr because
the balance of the retention money answered for the payments
made to suppliers and for the additional costs and expenses
incurred after termination of the contract. By way of
counterclaim, HPI prayed for the payment of liquidated damages

After due proceedings, the CIAC rendered its Decision on August

11, 2008 where it granted Werr’s claim for the balance of the
retention money and arbitration costs. It also granted HPI’s
claim for liquidated damages in the amount of ₱2,535,059.0l
equivalent to 9.327 days of delay, but denied its counterclaim
for damages, attorney’s fees, and litigation expenses.

The CIAC further ruled that Werr incurred only 9.327 days of
delay. Citing Article 137629 of the Civil Code and considering
the failure of the Agreement to state otherwise, it applied the
industry practice in the construction industry that liquidated
damages do not accrue after achieving substantial compliance.
While according to the CA, delay should be computed from October
27, 2006 until termination of the contract on November 28, 2006,
or 33 days, since the contract prevails over the industry
practice.

Werr argues that the CA erred in modifying the CIAC decision on

the amount of liquidated damages and arbitration costs. It
insists that the appellate court disregarded Articles 1234,
1235, and 1376 of the Civil Code and the industry practice. On
the other hand, HPI argues that Werr was unjustly enriched when
the CA disallowed HPI’ s recovery of the amounts it paid to
suppliers.
Issue: Whether or not the industry practice of computing
liquidated damages only up to substantial completion of the
project applies in the computation of liquidated damages.
Consequently, whether delay should be computed until termination
of the contract or until substantial completion of the project.

Ruling: We reject this claim of Werr and find that while this
industry practice may supplement the Agreement, Werr cannot
benefit from it.

At the outset, we do not agree with the CA that industry

practice be rejected because liquidated damages are provided in
the Agreement, autonomy of contracts prevails, and industry
practice is completely set aside. Contracting parties are free
to stipulate as to the terms and conditions of the contract for
as long as they are not contrary to law, morals, good customs,
public order or public policy. Corollary to this rule is that
laws are deemed written in every contract.

Deemed incorporated into every contract are the general

provisions on obligations and interpretation of contracts found
in the Civil Code. The Civil Code provides:

Art. 1234. If the obligation has been substantially performed in

good faith, the obligor may recover as though there had been a
strict and complete fulfillment, less damages suffered by the
obligee.

Art. 1376. The usage or custom of the place shall be borne in

mind in the interpretation of the ambiguities of a contract, and
shall fill the omission of stipulations which are ordinarily
established.

In previous cases, we applied these provisions in construction

agreements to determine whether the project owner is entitled to
liquidated damages. We held that substantial completion of the
project equates to achievement of 95% project completion which
excuses the contractor from the payment of liquidated damages.

Considering the foregoing, it: was error for the CA to

immediately dismiss the application of industry practice on the
sole ground that there is an existing agreement as to liquidated
damages. As expressly stated under Articles 1234 and 1376, and
in jurisprudence, the construction industry’s prevailing
practice may supplement any ambiguities or omissions in the
stipulations of the contract.

In this case, clause 41.5 of the Agreement is undoubtedly a

valid stipulation. However, while clause 41.5 requires payment
of liquidated damages if there is delay, it is silent as to the
period until when liquidated damages shall run. The Agreement
does not state that liquidated damages is due until termination
of the project; neither does it completely reject that it is
only due until substantial completion of the project. This
omission in the Agreement may be supplemented by the provisions
of the Civil Code, industry practice, and the CIAP Document No.
102. Hence, the industry practice that substantial compliance
excuses the contractor from payment of liquidated damages
applies to the Agreement.

Nonetheless, we find that Werr cannot benefit from the effects

of substantial compliance. Here, there is no dispute that Werr
failed to prove that it completed 95% of the project before or
at the time of the termination of the contract. As found by
CIAC, it failed to present evidence as to what accomplishment it
achieved from the time of the last billing until the termination
of the contract. What was admitted as accomplishment at the last
billing is 93.18%. For this reason, even if we adopt the rule
that no liquidated damages shall run after the date of
substantial completion of the project, Werr cannot claim benefit
for it failed to meet the condition precedent, i.e., the
contractor has successfully proven that it actually achieved 95%
completion rate.

More importantly, Werr failed to show that it is the

construction industry’s practice to project the date of
substantial completion of a project, and to compute the period
of delay based on the rate in past progress billings just as
what the CIAC has done. Consequently, the CIAC erred when it
assumed that Werr continued to perform works, and if it did,
that it performed them at the rate of accomplishment of the
previous works in the absence of evidence.

Atlantic Erectors, Inc. v. Court of Appeals

[G.R. No. 170732, October 11, 2012, 684 SCRA 55]

DOCTRINE:
Liquidated damages – The parties to a contract are allowed to stipulate on liquidated damages to be paid in case
of breach. It is attached to an obligation in order to ensure performance and has a double function: (1) to provide for
liquidated damages, and (2) to strengthen the coercive force of the obligation by the threat of greater responsibility
in the event of breach. As a pre-condition to such award, however, there must be proof of the fact of delay in the
performance of the obligation.

Effect of default – As long as the contractor fails to finish the works within the period agreed upon by the parties
without justifiable reason and after the owner makes a demand, then liability for damages as a consequence of such
default arises.

FACTS:
Respondent Herbal Cove Realty Corporation (Herbal Cove) wanted to build a a subdivision project somewhere in
Tagaytay City. It hired petitioner Atlantic Erectors Inc. (Atlantic) to build the project. The Construction
Contract indicated a contract price of almost P16.7Million and to finish building within 180 days. To secure payment
in case of non completion of the project, the contract also provides:

ARTICLE IX
FAILURE TO COMPLETE WORK
Section 1: The CONTRACTOR acknowledges that the OWNER shall not suffer [loss] by the delay or failure of the
CONTRACTOR to finish and complete the works called for under this Contract within the time stipulated in Section 6,
Article IV. The CONTRACTOR hereby expresses covenants and agrees to pay to the Owner liquidated damages
equivalent to the One-Tenth of One Percent (1/10 of 1%) of the Contract Price per calendar day of
delay until completion, delivery and acceptance of the said Works by the OWNER to a maximum
amount not to exceed 10%.

Atlantic was asked to commence construction on July 8, 1996, but eventually, it asked for an extension citing bad
weather and delayed turnover of project sites which Herbal Cove granted but ultimately, Atlantic failed to deliver.
Herbal Cove terminated the contract on October 3, 1997 and demanded liquidated damages. Herbal Cove also hired
another contractor to finish the job. It filed a case with the Construction Industry Arbitration Commission (CIAC). The
CIAC found in favor of Herbal Cove but did not award liquidated damages for failure to comply with 15-day notice of
termination (provided for in its contract.). The CA awarded liquidated damages.

ISSUE: Whether or not Atlantic is liable for liquidated damages.

HELD:

Yes. The CIAC disallowed liquidated damages because Herbal Cove failed to comply with the rule on notice.
However, the contract is the law between the parties and there are provisions in the same contract which provide
"the Contractor shall be required to pay the Owner the liquidated damages in the amount stipulated in the Contract
Agreement, the said payment to be made as liquidated damages, and not by way of penalty. The Owner may deduct
from any sum due or to become due the Contractor any sums accruing for liquidated damages as herein stated."
also, "Neither the taking over by the Owner of the work for completion by administration nor the re-letting of the
same to another Contractor shall be construed as a waiver of the Owner’s rights to recover damages against the
original Contractor and/or his sureties for the failure to complete the work as stipulated." Thus, under the contract,
Herbal Cove's right to liquidated damages is distinct from the right to terminate contract.
TAMARGO vs. CA et al

G.R. No. 85044 June 3, 1992 FELICIANO, ​J.:

FACTS: ​Adelberto Bundoc, then a minor of 10 years of age, shot Jennifer Tamargo with
an air rifle which resulted in her death. Accordingly, a civil complaint for damages was
filed with the RTC of Vigan, Ilocos Sur by petitioners, parents of Jennifer, against
respondent spouses, Adelberto’s natural parents with whom he was living at the time of
the tragic incident. In addition to this case for damages, a criminal information or
Homicide through Reckless Imprudence was filed against Adelberto, who was acquitted
and exempted from criminal liability on the ground that he bad acted without
discernment.

Prior to the incident the spouses Rapisura had filed a petition to adopt the minor
Adelberto before the then CFI of Ilocos Sur. This petition for adoption was granted ​after
Adelberto had shot and killed Jennifer

In their Answer, respondent spouses, Adelberto’s natural parents, claimed that not they,
but rather the adopting parents were indispensable parties to the action since parental
authority had shifted to the adopting parents from the moment the successful petition
for adoption was ​filed.

The trial court ruled against the adopting parents, who filed an MR which was later
denied for being filed beyond the reglementary period. Petitioners went to the CA on a
petition for mandamus ​and certiorari ​questioning the trial court’s decision. The CA
dismissed the petition, ruling that petitioners had lost their right to appeal. Hence this
petition for review

ISSUE: ​Who should be responsible for the tortuous act of the minor Adelberto, his
natural parents or adopting parents?

HELD:​ Natural parents.

It is not disputed that Adelberto’s voluntary act of shooting Jennifer with an air rifle
gave rise to a cause of action on ​quasi-delict ​against him. As Article 2176 of the Civil
Code provides:
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​ . . .

Upon the other hand, the law imposes civil liability upon the father and, in case of his
death or incapacity, the mother, for any damages that may be caused by a ​minor child
who lives with them. Article 2180 of the Civil Code reads:

The obligation imposed by article 2176 is demandable not only for one’s own acts or
omissions, but also for those of persons for whom one is responsible.

The father and, in case of his death or incapacity, the mother, are responsible for the
damages caused by the ​minor children who ​live in their company.

xxx xxx xxx

The responsibility treated of in this Article shall cease when the person herein
mentioned prove that they observed all the diligence of a good father of a family to
prevent damage. (Emphasis supplied)

The natural parent spouses rely on Article 36 of the Child and Youth Welfare Code
which reads as follows:

Art. 36. ​Decree of Adoption​. — If, after considering the report of the Department of
Social Welfare or duly licensed child placement agency and the evidence submitted
before it, the court is satisfied that the petitioner is qualified to maintain, care for, and
educate the child, that the trial custody period has been completed, and that the best
interests of the child will be promoted by the adoption, a decree of adoption shall be
entered, which shall be effective he date the original petition was filed. The decree shall
state the name by which the child is thenceforth to be known.

The Bundoc spouses further argue that the above Article 36 should be read in relation to
Article 39 of the same Code:

Art. 39. ​Effect of Adoption. ​— The adoption shall:

xxx xxx xxx

(2) ​Dissolve the authority vested in the natural parents​, except where the adopter is the
spouse of the surviving natural parent;

xxx xxx xxx

and urge that their Parental authority must be deemed to have been dissolved as of the
time the Petition for adoption was ​filed.

The Court is not persuaded. As earlier noted, under the Civil Code, the basis of parental
liability for the torts of a minor child is the relationship existing between the parents
and the minor child ​living with the​m and over whom, the law presumes, the parents
exercise ​supervision and control.

Article 221 of the Family Code of the Philippines insisted upon the requisite that the
child, doer of the tortious act, shall have been in the actual custody of the parents sought
to be held liable for the ensuing damage:

Art. 221. Parents and other persons exercising parental authority shall be civilly liable
for the injuries and damages caused by the acts or omissions of their unemancipated
children ​living in their company and under their parental authority subject to the
appropriate defenses provided by law.

In the instant case, however, to hold that parental authority had been retroactively
lodged in the Rapisura spouses so as to burden them with liability for a tortious act that
they could not have foreseen and which they could not have prevented (since they were
at the time in the United States and had no physical custody over the child Adelberto)
would be unfair and unconscionable. Such a result, moreover, would be inconsistent
with the philosophical and policy basis underlying the doctrine of vicarious liability. Put
a little differently, no presumption of parental dereliction on the part of the adopting
parents, the Rapisura spouses, could have arisen since Adelberto was not in fact subject
to their control at the time the tort was committed.
Maria Teresa Cuadra vs Alfonso Monfort 

FACTS: 

Maria  Teresa  Cuadra  and  Maria  Teresa  Monfort  were  both  classmates  in 
Mabini  Elementary  School  Bacolod  City.  In  July  1962,  their  teacher  assigned 
the  class  to  weed  the  school  premises.  While  they  were  doing  so,  MT  Monfort 
found  a  headband  and  she  jokingly  shouted  it  as  an  earthworm  and  thereafter 
tossed  it  at  MT  Cuadra  who  was  hit  in  her  eye.  MT  Cuadra’s  eye  got  infected. 
She  was  brought  to  the  hospital;  her  eyes  were  attempted  to  be  surgically 
repaired  but  she  nevertheless  got  blind  in  her  right  eye.  MT  Cuadra’s  parents 
sued  Alfonso  Monfort  (MT  Monfort’s  dad)  based  on  Article  2180  of  the  Civil 
Code.  The  lower  court  ruled  that  Monfort  should  pay  for  actual  damages  (cost 
of hospitalization), moral damages and attorney’s fees. 

ISSUE: 

Whether or not Monfort is liable under Article 2180. 

HELD: 

No.  Article  2180  provides  that  the  father,  in  case  of  his incapacity or death, the 
mother,  is  responsible  for  the  damages  caused  by  the  minor  children  who  live 
in  their  company.  The  basis  of  this  vicarious,  although  primary,  liability  is 
fault  or  negligence,  which  is  presumed  from  that  which  accompanied  the 
causative  act  or  omission.  The  presumption  is  merely  prima  facie  and  may 
therefore  be  rebutted.  This  is  the clear and logical inference that may be drawn 
from  the  last  paragraph  of  Article  2180,  which  states  “that  the  responsibility 
treated  of  in  this  Article  shall  cease  when  the  persons  herein  mentioned  prove 
that  they  observed  all  the  diligence  of  a  good  father  of  a  family  to  prevent 
damage.” 

In  the  case  at  bar  there  is  nothing  from  which  it  may  be  inferred  that  Alfonso 
Monfort  could  have  prevented  the  damage  by  the  observance  of  due  care,  or 
that he was in any way remiss in the exercise of his parental authority in failing 
to  foresee  such  damage,  or  the  act  which  caused  it.  On  the  contrary,  his  child 
was  at  school,  where  it  was  his  duty  to  send  her  and  where  she  was,  as  he  had 
the  right  to  expect her to be, under the care and supervision of the teacher. And 
as  far  as  the  act  which  caused  the  injury  was  concerned,  it  was  an  innocent 
prank  not  unusual  among  children  at  play  and  which  no  parent,  however 
careful,  would  have  any  special  reason  to  anticipate  much  less  guard  against. 
Nor  did  it  reveal  any  mischievous  propensity,  or  indeed  any  trait  in the child’s 
character  which  would reflect unfavorably on her upbringing and for which the 
blame could be attributed to her parents. 

JUSTICE BARREDO Dissenting; 

MT  Monfort  is  already  13  years  old  and  should  have  known  that  by  jokingly 
saying  “aloud  that  she  had  found  an  earthworm  and,  evidently  to  frighten  the 
Cuadra  girl,  tossed  the  object  at  her,”  it  was  likely  that  something  would 
happen  to  her  friend,  as  in  fact,  she  was  hurt.  There  is  nothing  in  the  record 
that  would  indicate  that  Alfonso  had  properly  advised  his  daughter  to  behave 
properly  and  not  to  play  dangerous  jokes  on  her  classmate  and  playmates,  he 
can  be  liable  under  Article  2180 of the Civil Code. There is nothing in the record 
to  show  that  he  had  done  anything  at  all  to  even  try  to  minimize  the  damage 
caused upon by his child. 
ISABELA EXCONDE v DELFIN CAPUNO and DANTE CAPUNO
Bautista, Angelo, J. June 29, 1957 G.R. No. L-10134
Doctrine
ART. 1903 (Spanish Civil Code). The obligation impossed by the next preceding articles is enforceable not
only for personal acts and omissions, but also for those of persons for whom another is responsible.
The father, and, in case of his death or incapacity, the mother, are liable for any damages caused by the
minor children who live with them.
xxx xxx xxx
Finally, teachers or directors of arts and trades are liable for any damages caused by their pupils or
apprentices while they are under their custody.

The civil liability which the law impose upon the father, and, in case of his death or incapacity, the mother,
for any damages that may be caused by the minor children who live with them, is the necessary consequence
of the parental authority they exercise over them which imposes upon the parents the "duty of supporting
them, keeping them in their company, educating them and instructing them in proportion to their means",
while, on the other hand, gives them the "right to correct and punish them in moderation" (Articles 154 and
155, Spanish Civil Code).

Summary Fifteen year-old Dante Capuno was convicted of double homicide through reckless imprudence for causing
the death of two persons. They were his passengers while he was driving a jeep that turned turtle while they
were in a school procession. The mother of the deceased filed an action for damages against Dante and his
father, Delfin, asking for P2,959. The father argued, however, that he can’t be held liable because his son
was not under his supervision when the incident happened and that he didn’t know about the school event.
The trial court sustained his claim and only ordered Dante to pay for the damages, but the Supreme Court
ruled that, in line with Art. 1903 of the old Civil Code, the civil liability must be imposed on the father and
in his absence, the mother . The only way he can relieve himself of the liability is by proving that he
exercised the diligence of a good father in preventing the damage which the defendants failed to do. The
teachers or directors of Dante cannot be held liable because the provision only refers to schools of arts and
trades, not academic institutions.
Facts  Dante Capuno was a member of the Boy Scouts and a student of the Balintawak Elementary School.
On March 31, 1949, he attended a school parade in honor of Jose Rizal upon the instruction of the
school supervisor. From the school, he boarded a jeep along with other students and when it began
to run, he took the wheels from the driver and drove the jeep.
 The jeep didn’t reach far before it turned turtle wherein its two passengers, Amado Ticzon and
Isidore Caperiña, died. At the time, Dante’s father, Delfin, was not with his son and was not aware
of the school event.
 Dante was found guilty of double homicide through reckless imprudence. During the trial, the
mother of one of the deceased, the petitioner, reserved the right to bring a separate civil action
against Dante and his father. She asked for P2,959 in damages. The trial court, however, sustained
Delfin’s defense and awarded the damages only to Dante.
 Upon appeal, plaintiff argued that Delfin should be held jointly and severally liable with his son
because at the time the latter committed the negligent act which resulted in the death of the victim,
he was a minor and was then living with his father.

Ratio/Issues
(1) Whether or not Delfin Capuno can be held civilly liable, jointly and severally with his son
for damages resulting from the death of Isidoro Caperiña caused by the negligent act of
the minor (YES)
a) See doctrine. The only way by which they can relieve themselves of this liability is if they
prove that they exercised all the diligence of a good father of a family to prevent the damage
(Article 1903, last paragraph, Spanish Civil Code).
b) The civil liability for “teachers or directors of arts and trades for the damages caused by their
pupils or apprentices while they are under their custody” in Art. 1903 applies only to an
institution of arts and trades and not to any academic educational institution. It is clear that
 neither the head of that school, nor the city school's supervisor, could be held liable for the
negligent act of Dante because he was not then a student of an institute of arts and trades as
provided by law.

Held Defendants Delfin Capuno and Dante Capuno shall pay to plaintiff, jointly and severally, the sum of
P2,959.00 as damages
Prepared by: Eunice V. Guadalope [Torts and Damages | Prof. Mirasol]

Dissenting opinion (JBL Reyes):

- The father, Delfin, should be relieved of liability because there is no reason to distinguish between teachers of arts
and trades and that of academic institutions. In the phrase, “teachers or heads of establishments of arts and trades"
in Art. 1903 of the old Civil Code, the words "arts and trades" does not qualify "teachers" but only "heads of
establishments".
- Where the parent places the child under the effective authority of the teacher, the latter, and not the parent, should
be the one answerable for the torts committed while under his custody, for the very reason that the parent is not
supposed to interfere with the discipline of the school nor with the authority and supervision of the teacher while
the child is under instruction.
- If a teacher or scout master was present, then he should be the one responsible for allowing the minor to drive the
jeep without being qualified to do so. On the other hand, if no teacher or master was at hand to watch over the
pupils, the school authorities are the ones answerable for that negligence, and not the father.
- The father had every reason to assume that in ordering a minor to attend a parade with other children, the school
authorities would provide adequate supervision over them. Thus, the father has rebutted the presumption of Art.
1903 and the burden of proof shifted to the Exconde to show actual negligence on the part of the parent in order to
render him liable.
 Mercado v CA

No. L-14342, 30 May 1960

FACTS:

 Plaintiff-appellant Manuel Quisumbing Jr is the son of co-plaintiff-appellants Ana Pineda and

Manuel Quisumbing while Augusto Mercado is the son of defendant-appellee Ciriaco
Mercado.

 Manuel Jr and Augusto were classmates in teh Lourddes Catholic School. One day, they
quarrelled over a pitogo (an empty nutshell used by children as a piggybank).

 Augusto owned a pitogo which he lent to Benedicto and in turn the latter lent it to Renato
Legaspi. Renato was not aware that the pitogo was owned by Augusto. Manuel Jr was not
also aware that Benedicto was the owner. When Augusto tried to get the pitogo from Renato,
Augusto resented Manuel Jr’s remark and aggressively pushed the latter. They started to
fight and Augusto was able to give successive blows to Manuel Jr. Augusto then cut Manuel
Jr, on the right cheek with a piece of razor.

 Manuel Jr and his father filed a complaint against the defendant.

 CFI: dismissed the complaint

 CA: condemned petitioner to pay P2,000 as moral damages and P50 for medical expenses

ISSUE:

1. WON Manuel Jr is entitled to receive moral damages by reason of wound inflicted by Augusto.
NO.

2. WON the teacher or head of the schoool should be held responsible instead of the father
since the incident happened in a Catholic school. NO!!!

RULING:

1. While moral damages include physical suffering, which must have been caused to a boy
wounded by another boy in a fight, they should not be awarded if the decision of the court does
not declare that any of the cases specified in Article 2219 of the CC in which moral damages may
be recovered, has attended or occasioned the physical injury. Here, it does not appear that a
criminal action for physical injuries was ever presented, since the offender was 9 years old, and it
does not appear that he acted with discernment when he inflicted the physical injuries. Even if it
be assumed that the court considered the offender guilty of a quasi-delict when it imposed the
moral damages, the award should not be sustained since it is apparent that the proximate cause
of the injury caused to the offended party was his own fault or negligence for having infered with
Augusto while trying to get the pitogo from another boy. Thus, the grant of moral damages is not
justified.

2. Article 2180 of the NCC “which provides that "teachers or heads of establishments of arts and
trades shall be liable for damages caused by their pupils and students or apprentices, so long as
they remain in their custody", applies to an institution of arts and trades and not to any academic
institution and contemplates a situation where the pupil lives and boards with the teacher, such
that the control, direction and influence on the pupil supersede those of the parents. In these
circumstances the control or influence over the conduct and actions of the pupil would
pass from the father and mother to the teacher, and so would the responsibility for the
torts of the pupil.

Such a situation does not appear in this case; the pupils appear to go to school during school
hours and go back to their homes with their parents after school is over. The situation
contemplated in the last paragraph of Article 2180 does not apply, nor does paragraph 2 of said
article, which makes father or mother responsible for the damages caused by their minor children.
Thus, the claim of petitioner that responsibility should pass to the school must denied.
 PALISOC v. BRILLANTES

G.R. No. L-29025 [October 4, 1971]

FACTS:

Deceased Dominador Palisoc and defendant Virgilio Daffon were automotive

mechanics students at the Manila Technical Institute (MTI). In the afternoon of March
10, 1966 during recess, an altercation transpired between the deceased and the
defendant. At the time of the incident, Dominador was sixteen years old while Virgilio
was already of age. Virgilio was working on a machine with Dominador looking at them.
The situation prompted Virgilio to remark that Dominador was acting like a foreman. As
a result, Dominador slapped Virgilio on the face. Virgilio retaliated by inflicting severe
blows upon Dominador’s stomach, which caused the latter to stumble upon an engine
block and faint. The latter died, the cause of death being “shock due to traumatic
fracture of the ribs”. The parents of Dominador filed an action for damages against (1)
Virgilio, (2) Valenton, the head/president of MTI, (3) Quibule who was the teacher in
charge at the time of the incident, and (4) Brillantes who is a member of the board of
directors and former sole proprietor of MTI.

The trial court held Virgilio liable but absolved the other defendants-officials. It
stated that the clause “so long as they remain in their custody” contained in Article 2180
of the Civil Code applies only where the pupil lives and boards with the teachers, such
that the control or influence on the pupil supersedes those of the parents., and such
control and responsibility for the pupil’s actions would pass from the father and mother
to the teachers. This legal conclusion was based on the dictum in Mercado v. CA, which
in turn based its decision in Exconde v. Capuno. The trial court held that Article 2180
was not applicable in this case, as defendant Virgilio did not live with the
defendants-officials at the time of the incident. Hence, this petition.

ISSUE:

Who must be held liable for damages for the death of Dominador together with
the defendant?

HELD:

The head/president and teacher of MTI (Valenton and Quibule respectively)

were held liable jointly and severally with the Virgilio for damages. No liability attaches
to Brillantes as a mere member of the MTI board of directors. Similarly, MTI may not be
held liable since it had not been properly impleaded as party defendant.
 The phrase used in Article 2180, “so long as the students remain in their
custody” means the protective and supervisory custody that the school and its heads and
teachers exercise over the pupils and students for as long as they are at attendance in
the school, including recess time. There is nothing in the law that requires that for such
liability to attach the pupil or student who commits the tortuous act must live and board
in the school. The dicta in the cases of Mercado as well as in Exconde v. Capuno on
which it relied are deemed to have been set aside. The rationale of such liability of
school heads and teachers for the tortious acts of their pupils and students, so long as
they remain in their custody, is that they stand, in loco parentis to a certain extent to
their pupils and students and are called upon to “exercise reasonable supervision over
the conduct of the child.” In this case, The unfortunate death resulting from the fight
between the protagonists-students could have been avoided, had said defendants
complied with their duty of providing adequate supervision over the activities of the
students in the school premises to protect their students from harm. Since Valenton and
Quibule failed to prove that they observed all the diligence of a good father of a family to
prevent damage, they cannot likewise avail of the exemption to the liability. The
judgment of the appellate court was modified, while claim for compensatory damages
was increased in accordance with recent jurisprudence and the claim for exemplary
damages denied in the absence of gross negligence on the part of the said defendants.
AMADORA v. CA
G.R. No. L-44745, Apr. 15, 1988

FACTS:

The setting is the Colegio-de San Jose Recoletos, which was NOT a school of arts and trades but
an academic institution of learning. A few days before the commencement exercises, student
Alfredo Amadora went to school to finish his physics experiment as a prerequisite for graduation.
When he was in the auditorium, he was shot to death by his classmate Pablito Daffon.

Pablito was convicted of homicide thru reckless imprudence. Alfredo’s parents filed a civil action
for damages under NCC 2180 against the school, its rector, the high school principal, the dean of
boys, the physics teacher, together with Pablito and two other students, through their parents.
The complaint against the students was dropped.

CONTENTIONS ON CUSTODY
 PETITIONERS: AMADORA UNDER SCHOOL’S CUSTODY. He was in school to
show his physics experiment as a graduation prerequisite.
 RESPONDENTS: AMADORA NOT UNDER SCHOOL’S CUSTODY. Semester
already ended.

THE GUN ISSUE

Days before the incident, the dean of the boys confiscated from Gumban an unlicensed
pistol but later returned it to him without making a report to the principal or taking any further
action. PETITIONERS contend that this was the same pistol, as Gumban was one of Daffon’s
companions when the latter fired the gun that killed Amadora, and that Amadora would not have
been killed if the gun was not returned by the dean of the boys.

RULING OF COURTS
CFI held the remaining defendants liable. CA, however, reversed CFI and all defendants
were absolved. CA found that NCC 2180 was not applicable since the school was not a school
of arts and trades. It also held that the students were not in the school’s custody at the time
of the incident since the semester already ended. In addition, there was no clear identification of
the gun, and that the defendant exercised the necessary diligence in preventing injury.

ISSUE: Whether or not the defendants are liable under Article 2180 NCC.
HELD: NO. The rector, the high school principal and the dean of boys cannot be held liable
because none of them was the teacher in charge during the time of the accident. Each of them
was exercising only a general authority over the student body and not the direct control and
influence exerted by the teacher placed in charge of particular classes or sections and thus
immediately involved in its discipline. Finally, the Colegio de San Jose-Recoletos cannot be held
directly liable under the Article because only the teacher or the head of the school of arts and
trades is made responsible for the damage caused by the students of apprentice. Neither can it
be held liable to answer for the tort committed by any other private respondents for none of them
has been found to have been charged with the custody of the offending students or has been
remiss in the discharge of his duties in connection with such custody.
FACTS:
■ 1962: Sergio Banez started burying huge stones which were remnants of the
old school shop that was destroyed in World War II because they were serious
hazards to the school children
■ October 7, 1963: Edgardo Aquino gathered 18 of his male pupils, aged 10 to
11, after class dismissal and ordered them to dig beside a one-ton concrete
block in order to make a hole wherein the stone can be buried.
■ The work was left unfinished.
■ October 8, 1963: Aquino called Reynaldo Alonso, Francisco Alcantara, Ismael
Abaga and Novelito Ylarde of the original 18 pupils to continue the digging
■ they dug until the excavation was 1 meter and 40 centimeters deep
■ Aquino alone continued digging while the pupils remained inside the
pit throwing out the loose soil that was brought about by the digging
■ When the depth was right enough to accommodate the concrete block,
they got out of the hole
■ Aquino left the children to level the loose soil around the open hole
while he went to see Banez who was about 30 meters away to key to the
school workroom where he could get some rope
■ A few minutes after Aquino left, Alonso, Alcantara and Ylarde, playfully
jumped into the pit.
■ without any warning at all, Abaga jumped on top of the concrete block
causing it to slide down towards the opening.
■ Alonso and Alcantara were able to scramble out of the excavation on time
■ unfortunately for Ylarde, the concrete block caught him before he
could get out, pinning him to the wall in a standing position
■ Ylarde sustained the following injuries, which he died of 3 days later.

■ Ylarde's parents filed a suit for damages against both Aquino and Soriano,
principal
■ lower court:
1. digging done by the pupils is in line with their course called Work Education
2. Aquino exercised the utmost diligence of a very cautious person
3. demise of Ylarde was due to his own reckless imprudence
■ CA: affirmed
■
ISSUE: W/N Aquino and Soriano should be held liable for negligence

HELD: YES. the petition GRANTED. Edagardo Aquino to pay petitioners the following:
(1) Indemnity for the death of Child Ylarde P30,000.00
(2) Exemplary damages 10,000.00
(3) Moral damages 20,000.00
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 a quasi-delict and is
governed by the provisions of this Chapter.

Art. 2180. x x x
xxx xxx xxx

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages
caused by their pupils and students or apprentices, so long as they remain in their
custody.

■ As regards the principal, We hold that he cannot be made responsible for the
death of the child Ylarde, he being the head of an academic school and not a
school of arts and trades
■ Soriano did not give any instruction regarding the digging
■ GR: teachers shall be liable for the acts of their students
■ EX: where the school is technical in nature, in which case it is the head
thereof who shall be answerable
■ Aquino acted with fault and gross negligence when he:
(1) failed to avail himself of services of adult manual laborers
(2) required the children to remain inside the pit even after they had finished
digging, knowing that the huge block was lying nearby and could be easily
pushed or kicked aside by any pupil who by chance may go to the perilous
area
(3) ordered them to level the soil around the excavation when it was so
apparent that the huge stone was at the brink of falling
(4) went to a place where he would not be able to check on the children's
safety
(5) left the children close to the excavation, an obviously attractive nuisance.
■ negligent act of Aquino in leaving his pupils in such a dangerous site has a
direct causal connection to the death of the child Ylarde
■ it was but natural for the children to play around
■ the child Ylarde would not have died were it not for the unsafe
situation created by Aquino
■ the excavation should not be placed in the category of school gardening,
planting trees, and the like as these undertakings do not expose the children
to any risk that could result in death or physical injuries
■ A reasonably prudent person would have foreseen that bringing children to an
excavation site, and more so, leaving them there all by themselves, may result
in an accident. An ordinarily careful human being would not assume that a
simple warning "not to touch the stone" is sufficient to cast away all the
serious danger that a huge concrete block adjacent to an excavation would
present to the children. Moreover, a teacher who stands in ​loco parentis ​to his
pupils would have made sure that the children are protected from all harm in
his company.
G.R. No. 84698 February 4, 1992

PHILIPPINE SCHOOL OF BUSINESS A!INIS"RA"ION, #UAN . LI!, BEN#A!IN P. PAULINO,

AN"ONIO !. !AG"ALAS, COL. PERO SACRO a$% L". !. SORIANO, petitioners,
vs.
COUR" OF APPEALS, HON. REGINA ORO&E'(BENI"E',
ORO&E'(BENI"E', )$ *er +aa+)-y a Pre)%)$/ #u%/e o0
Bra$+* 4, Re/)o$a "r)a Cour-, !a$)a, SEGUNA R. BAU"IS"A a$% ARSENIA .
BAU"IS"A, respondents.

FAC"S3 Carlitos Bautista was a third year student at the Philippine School of Business Administration.
 Assailants, who were not members of the schools academic community, while in the premises of PSBA,
stabbed Bautista to death. This incident prompted his parents to file a suit against PSBA and its
corpor
corporate
ate offic
officers
ers for damage
damages
s due to their
their allege
alleged
d neglige
negligence
nce,, reckle
recklessn
ssness
ess and lack
lack of securi
security
ty
precautions, means and methods before, during and after the attack on the victim.

The defendants filed a motion to dismiss, claiming that the compliant states no cause of action against
them based on uasi!delicts, as the said rule does not cover academic institutions. The trial court denied
the motion to dismiss. Their motion for reconsideration was likewise dismissed, and was affirmed by the
appellate court. "ence, the case was forwarded to the Supreme Court.

ISSUE3 #hether or not PSBA is liable for the death of the student.

RULING3 Because the circumstances of the present case evince a contractual relation between the
PSBA and Carlitos Bautista, -*e rue o$ ua)(%e)+- %o $o- reay /o5er$ . A perusal of Article $%&'
shows that obligations arising from uasi!delicts or tort, also known as e(tra!contractual obligations,
arise only between parties not otherwise bound by contract, whether e(press or implied. "owever, this
impression has not prevented this Court from determining the e(istence of a tort even when there
obtains a contract.

 Article $%)*, in con+unction with Article $%&' of the Civil Code, establishes the rule in in o+o are$-) .
 Article $%)* 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.
"owever, this material situation does not e(ist 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. But it does
not necessarily follow that PSBA is absolved form liability.

*e$ a$ a+a%e7)+ )$-)-u-)o$ a++e- -u%e$- 0or e$ro7e$-, -*ere ) e-ab)*e% a +o$-ra+-
be-ee$ -*e7, reu-)$/ )$ b)a-era ob)/a-)o$ *)+* bo-* ar-)e ) bou$% -o +o7y )-* . or 
its part, the school undertakes to provide the student with an education that would presumably suffice to
euip him with the necessary tools and skills to pursue higher education or a profession. This includes
ensuring the safety of the students while in the school premises. -n the other hand, the student
covenants to abide by the schools academic reuirements and observe its rules and regulations.

/n the circumstances obtaining in the case at bar, however, there is, as yet, no finding that the contract
between the school and Bautista had been breached thru the formers negligence in providing proper 
security measures. This would be for the trial court to determine. And, even if there be a finding of 
negligence, the same could give rise generally to a breach of contractual obligation only. 0sing the test
of Cangco,
Cangco, supra,
supra, the negligence of the school would not be relevant absent a contract. /n fact, that
negligence becomes material only because of the contractual relation between PSBA and Bautista. /n
other words, a contractual relation is a condition sine qua nonto
nonto the schools liability. The negligence of 
the school cannot e(ist independently of the contract, unless the negligence occurs under the
circumstances set out in Article $% of the Civil Code.
Soliman v. Tuazon

G.R. No. 66207, 18 May 1992

FACTS:

In the morning of 13 August 1982, while the plaintiff was in the campus ground and
premises of, REPUBLIC CENTRAL COLLEGES, as he was and is still a regular enrolled
student of said school taking his morning classes, the defendant, JIMMY B. SOLOMON,
who was on said date and hour in the premises of said school performing his duties and
obligations as a duly appointed security guard under the employment, supervision and
control of his employer-defendant R.L. SECURITY AGENCY, INC., headed by Mr.
Benjamin Serrano, without any provocation, in a wanton, fraudulent, reckless,
oppressive or malevolent manner, with intent to kill, attack, assault, strike and shoot the
plaintiff on the abdomen with a .38 Caliber Revolver, a deadly weapon, which ordinarily
such wound sustained would have caused plaintiff’s death were it not for the timely
medical assistance given to him. The plaintiff was treated and confined at Angeles
Medical Center, Angeles City, and, as per doctor’s opinion, the plaintiff may not be able
to attend to his regular classes and will be incapacitated in the performance of his usual
work for a duration of three to four months before his wounds would be completely
healed.

Private respondent Colleges filed a motion to dismiss, contending that the complaint
stated no cause of action against it. Private respondent argued that it is free from any
liability for the injuries sustained by petitioner student for the reason that private
respondent school was not the employer of the security guard charged and hence was
not responsible for any wrongful act of Solomon.

ISSUE:

WON the respondent college is liable for the acts of the security guard.

RULING:

No. Under Article 2180 of the Civil Code, the obligation to respond for damage inflicted
by one against another by fault or negligence exists not only for one’s own act or
omission, but also for acts or omissions of a person for whom one is by law responsible.
Among the persons held vicariously responsible for acts or omissions of another person
are the following:

xxx xxxxxx
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are not
engaged in any business or industry.

xxx xxxxxx

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages
caused by their pupils, their students or apprentices, so long as they remain in their
custody.

x xx x xx x xx

The first paragraph quoted above offers no basis for holding the Colleges liable for the
alleged wrongful acts of security guard Jimmy B. Solomon inflicted upon petitioner
Soliman, Jr. Private respondent school was not the employer of Jimmy Solomon. The
employer of Jimmy Solomon was the R.L. Security Agency Inc., while the school was the
client or customer of the R.L. Security Agency Inc. It is settled that where the security
agency, as here, recruits, hires and assigns the work of its watchmen or security guards,
the agency is the employer of such guards or watchmen. Liability for illegal or harmful
acts committed by the security guards attaches to the employer agency, and not to the
clients or customers of such agency.

The fact that a client company may give instructions or directions to the security guards
assigned to it, does not, by itself, render the client responsible as an employer of the
security guards concerned and liable for their wrongful acts or omissions. Those
instructions or directions are ordinarily no more than requests commonly envisaged in
the contract for services entered into with the security agency. There being no
employer-employee relationship between the Colleges and Jimmy Solomon, petitioner
student cannot impose vicarious liability upon the Colleges for the acts of security guard
Solomon.
 SALVOSA vs IAC

Facts:

Baguio Colleges Foundation is an academic institution. However, it is also an institution

of arts and trade because BCF has a full-fledged technical-vocational department offering
Communication, Broadcast and Teletype Technician courses as well as Electronics
Serviceman and Automotive Mechanics courses.

Within the premises of the BCF is an ROTC Unit. The Baguio Colleges Foundation ROTC
Unit had Jimmy B. Abon as its duly appointed armorer. As armorer of the ROTC Unit,
Jimmy B. Abon received his appointment from the AFP. Not being an employee of the
BCF, he also received his salary from the AFP, as well as orders from Captain Roberto C.
Ungos. Jimmy B. Abon was also a commerce student of the BCF.

On 3 March 1977, at around 8:00 p.m., in the parking space of BCF, Jimmy B. Abon
shot Napoleon Castro a student of the University of Baguio with an unlicensed firearm
which the former took from the armory of the ROTC Unit of the BCF. As a result,
Napoleon Castro died and Jimmy B. Abon was prosecuted for, and convicted of the crime
of Homicide.

Subsequently, the heirs of Napoleon Castro sued for damages, impleading Jimmy B. Abon
and the BCF .

Issue:

WON BCF is subsidiarily liable.

Ruling of the Case:

Under the penultimate paragraph of Art. 2180 of the Civil Code, teachers or
heads of establishments of arts and trades are liable for “damages caused by
their pupils and students or apprentices, so long as they remain in their
custody.” The rationale of such liability is that so long as the student remains in the
custody of a teacher, the latter “stands, to a certain extent, in loco parentis as to the
student and is called upon to exercise reasonable supervision over the conduct of the
student.” Likewise, “the phrase used in [Art. 2180 — ‘so long as (the students) remain in
their custody means the protective and supervisory custody that the school and its heads
and teachers exercise over the pupils and students for as long as they are at attendance in
the school, including recess time.”

In line with the case of Palisoc, a student not "at attendance in the school" cannot be in
"recess" thereat. A "recess," as the concept is embraced in the phrase "at attendance in
the school," contemplates a situation of temporary adjournment of school activities where
the student still remains within call of his mentor and is not permitted to leave the school
premises, or the area within which the school activity is conducted. Recess by its nature
does not include dismissal. Likewise, the mere fact of being enrolled or being in
the premises of a school without more does not constitute "attending school"
or being in the "protective and supervisory custody" of the school, as
contemplated in the law

Jimmy B. Abon cannot be considered to have been “at attendance in the school,” or in the
custody of BCF, when he shot Napoleon Castro. Logically, therefore, petitioners cannot,
under Art. 2180 of the Civil Code, be held solidarity liable with Jimmy B. Abon for
damages resulting from his acts.
St. Francis High School vs. CA

Facts:

Ferdinand Castillo a freshman student at St. Francis HS wanted to join a school pincin but his parents did not allow
him because of short notice however his parents allowed him to bring food to the teachers for the picnic with a directive to go
back home after doing so. Hpwever, because of persuasion of the teachers, Ferdinand went on with them to the beach.

During the picnic and while the students and teachers were in the water, one of the female teachers was drowning.
Some students including Ferdinand came to recuse, but in the process, it was Ferdinand himself who drowned. His body was
recovered but efforts to resuscitate him ashore failed. He was brought to a certain Dr. Luna in Quezon and later to Mt. Carmel
General Hospital where he was pronounced dead on arrival. Spouses filed a complaint against the school for damages which
respondents incurred from the death of their 13 year old son.

Respondent’s contention: The death of their son was due to the failure of the petitioners to exercise the proper diligence of a
good father of the family in preventing their son from drowning.

RTC: Ruled in favor of respondents and against the petitioner-teachers but dismissed the case against the School St. Francis
High School as it was found out the principal did not consent thereto. "The students, young as they were then (12 to 13 years
old), were easily attracted to the sea without aforethought of the dangers it offers. Yet, the precautions and reminders allegedly
performed by the defendants-teachers definitely fell short of the standard required by law under the circumstances”

CA: Held the School also liable. The school and the principal are liable under Article 2176 taken together with the 1st, 4th and
5th paragraphs of Article 2180 of the Civil Code. They cannot escape liability on the mere excuse that the picnic was not an
'extra-curricular activity of the St. Francis High School.' We find from the evidence that, as claimed by plaintiffs-appellants, the
school principal had knowledge of the picnic even from its planning stage and had even been invited to attend the affair; and
yet he did not express any prohibition against undertaking the picnic, nor did he prescribe any precautionary measures to be
adopted during the picnic.

Issue:

1.) Whether or not there was negligence attributable to the defendants which will warrant the award of damages to the
plaintiffs
2.) Whether or not Art. 2180, in relation to Art. 2176 of the New Civil Code is applicable to the case at bar
3.) Whether or not the award of exemplary and moral damages is proper under the circumstances surrounding the case
at bar.

Ruling:

Under the law, it is clear that before an employer may be held liable for the negligence of his employee, the act or
omission which caused damage or prejudice must have occurred while an employee was in the performance of his assigned
tasks.

Hence on the first issue, the teachers/petitioners were not in the actual performance of their assigned tasks. The
incident happened not within the school premises, not on a school day and most importantly while the teachers and students
were holding a purely private affair, a picnic. This picnic had no permit from the school head or its principal, Benjamin Illumin
because this picnic is not a school sanctioned activity neither is it considered as an extra-curricular activity.

On the Second issue, The application therefore of Article 2180 has no basis in law and neither is it supported by any
jurisprudence. If we were to affirm the findings of respondent Court on this score, employers will forever be exposed to the
risk and danger of being hailed to Court to answer for the misdeeds or omissions of the employees even if such act or omission
he committed while they are not in the performance of their duties. Finally, no negligence could be attributable to the
petitioners-teachers to warrant the award of damages to the respondents-spouses.

On the third issue, no moral nor exemplary damages may be awarded in favor of respondents-spouses. The case at
bar does not fall under any of the grounds to grant moral damages.

"Art. 2217. Moral Damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similarly
 injury. Though incapable of pecuniary computation, moral damages may be recovered if they
are the proximate result of the defendant's wrongful act or omission."

Moreover, as already pointed out hereinabove, petitioners are not guilty of any fault or negligence, hence, no moral
damages can be assessed against them.
PHILIPPINE RABBIT BUS LINES and FELIX PANGALANGAN v.
PHIL-AMERICAN FORWARDERS, ARCHIMEDES BALINGIT, and
FERNANDO PINEDA
1975 / Aquino / Appeal from CFI order

FACTS:
Pineda recklessly drove a freight truck [owned by ​Phil-American
Forwarders​] along the national highway at Pampanga, and the ​truck bumped the
PRBL bus driven by Pangalangan​. As a result, ​Pangalangan suffered injuries
and the ​bus was damaged and could not be used for 79 days​, thus depriving
PRBL of earnings amounting to P8,665.51. Balingit was the manager of Phil-American
Forwarders.

PRBL and Pangalangan filed a complaint for damages ​against Phil-American

Forwarders, Balingit, and Pineda. Defendants said Balingit was not Pineda’s employer.
Balingit moved that the complaint against him be dismissed on the ground that PRBL
and Pangalangan had no cause of action against him. ​CFI dismissed the complaint
against Balingit​, on the ground that ​he is not the manager of an establishment
as contemplated in NCC 2180​.

ISSUE AND HOLDING

WON the terms “employers” and “owners and managers of an establishment or
enterprise” embrace the manager of a corporation owning a truck, the reckless operation
of which allegedly resulted in the vehicular accident from which the damage arose. ​NO.

RATIO
Those terms do not include the manager of a corporation. It may be gathered from the
context of NCC 2180 that the term “manager” (“director” in the Spanish version) is used
in the sense of “employer”. Hence, no tortious or quasi-delictual liability can be imposed
on Balingit as manager of Phil-American Forwarders, in connection with the vehicular
accident in question, because ​he himself may be regarded as an employee ​or
dependiente ​of Phil-American Forwarders​. ​CFI AFFIRMED.
 JOHNSON vs. DAVID

FACTS:

On the 13th of November, 1903, the plaintiff was riding a bicycle and was passing
over the bridge in front of the Binondo Church in the city of Manila. While proceeding at
a slow rate of speed down the incline from the bridge toward Calle San Fernando and
being on the north side of said bridge, he was run into by the defendant's carriage that
was drawn by one horse and was driven by the cochero of the defendant. The plaintiff
rang the bell of his bicycle to attract the attention of the defendant’s cochero, as he was
unable to stop for the reason that other carriages were coming behind him. It is during
this incident that the plaintiff alleges that he was riding on his bicycle on the left path of
the bridge, as required by the ordinance, and that defendant’s cochero made a detour
with the horse and carriage and attempted to approach said bridge upon the left side in
a diagonal direction.

The plaintiff and the carriage collided, the result of which threw the former to the
ground. Plaintiff alleges that reasonable care was not taken by defendant’s cochero in
driving or approaching the said bridge, and that defendant’s cochero was negligent and
careless in driving defendant’s vehicle, thereby causing the collision, and as the result of
said collision plaintiff’s bicycle was greatly damaged and practically destroyed, being
run over by the horse and carriage after being dashed to the ground; that the plaintiff
was thrown upon his head and shoulders upon the ground. It is important to note that
the defendant was not present in the carriage at the time the accident happened.

ISSUE:

Whether the owner of a carriage driven by his cochero, liable for injuries growing
out of the negligence of said cochero, in the absence of such owner?

HELD:

​ o evidence was adduced during the trial of said cause to show that the
NO. N
defendant had been negligent in the employment of the cochero or that he had any
knowledge that such cochero was incompetent or of the general negligent character of
said cochero, if such existed.

Chapter 2, title 16, book 4 of the Civil Code provides when a person is liable for
his own negligence, as well as for the negligence of others. Said chapter also
enumerates the other persons for whose negligence be shall respond in damages.

Defendant’s cochero or servant was driving his horse and carriage in

the streets of the city of Manila and negligently caused injury to a passenger in
the street. Defendant was not present in the carriage at the time of the alleged
injury. Held, That Defendant was not liable for the damages occasioned by the
negligence of the cochero.

Article 1905 provides that the possessor of an animal, or the one who uses the
same, is liable for the damages it may cause, even when said animal shall escape from
him or stay. No complaint, however, is made here that the injuries caused by the
negligence of the cochero were caused by the animal belonging to the defendant. This
section might, under certain conditions, render either the owner of the animal or the
one using it liable for damages. These sections do not include a liability on the part of
the plaintiff for injuries resulting from acts of negligence such as are complaint of in the
present cause. The defendant not having contributed in any way to the injury
complained of, he is in no wise responsible for the same.
 

Nklpalo vs. Uoherwbbh

M.V. Ob. C-4:<: Alrnk 6;, <4<8

GLNX^0

Xke pcldotdgg
pcldotdgg wls strun
struni
i grba fekdoh loh ruo bver fy tke hegeohlot
hegeohlot's's lutbabfdce.
lutbabfdce. Xke
hegeohlot eotereh Nlcce Kerrlo lt Nlcce Zeülgrlondl do kds lutbabfdce hrdveo fy kds nkluggeur, l
nbapeteot hrdver. L street nlr fbuoh grba Alodcl tb ^lotl Lol fedom daaehdltecy do grbot bg kda,

keeapteh
gbccbweh
ltteap
ltt teh tblcbom
fbl fekdoh
fblrh,
rh, wls dt.
lca]keo
bst dotke
lcabst grbgrbot
ot bgbgtke
grbot tkehegeoh
"^lo
heg Alrnecdob"
eohlot
lot's's lut nlr,
lutbab
babfdc
fdce,tkehegeoh
e, boe
heg tke
eohlot 'spcldotdgg 
lot's hrd
hrdver 
ver 
suhheocy weot tb tke rdmkt loh struni loh rlo bver tke pcldotdgg.
pcldotdgg.

 L nlreguc exladoltdbo
exladoltdbo bg tke renbrh celhs us tb tke nboncusdbo tklt tke hegeohlot's hrdver 
wls mudcty bg oemcdmeone do ruoodom upbo loh bver tke pcldotdgg. Ke wls plssdom lo bonbadom nlr 
upbo tke wrbom sdhe. Xke pcldotdgg, do nbaabo but tb fblrh tke nlr, wls obt bfcdmeh, gbr kds bwo
prbtentdbo, tb bfserve wketker l nlr wls nbadom upbo kda grba kds cegt kloh.

D^^UE^0

]ketker tke bwoer ds sbcdhlrdcy cdlfce2

KECH0

Ob. Xke hegeohlot ds obt respbosd

respbosdfce
fce gbr tke oemcdmeone bg kds hrdver
hrdver,, uoher tke glnts loh
ndrnuastlones bg tkds nlse. Xke hrdver hbes obt glcc wdtkdo tke cdst bg persbos do lrtdnce <4:> bg tke
Ndvdc Nbhe gbr wkbse lnts tke hegeohlot wbuch fe respbosdfce.

 Lo bwoer wkb sdts do kds lutbabfdce, br btker vekdnce, loh peradts kds hrdver tb nbotdoue
do l vdbcltdbo bg tke clw fy tke pergbralone bg oemcdmeot lnts, lgter ke kls klh l relsbolfce
bppbrtuodty tb bfserve tkea loh tb hdrent tklt tke hrdver nelse tkeregrba, fenbaes kdasecg 
respbosdfce gbr sunk lnts.

Bo tke btker kloh, dg tke hrdver, fy l suhheo lnt bg oemcdmeone, loh wdtkbut tke bwoer 
klvdom l relsbolfce bppbrtuodty tb preveot tke lnts br dts nbotdoulone, do`ures l persbo br 
vdbcltes tke nrdadolc clw, tke bwoer bg tke lutbabfdce, lctkbumk preseot tkeredo lt tke tdae tke lnt
wls nbaadtteh, ds obt respbosdfce, edtker ndvdccy br nrdadolccy
nrdadolccy,, tkeregbr. Xke lnt nbapcldoeh bg aust
fe nbotdoueh do tke preseone bg tke bwoer gbr sunk l ceomtk l tdae tklt tke bwoer, fy kds
lnqudesneone, alies kds hrdver's lnt kds bwo.

Do tk
tke
e nl
nlse
se fegb
fegbre
re us dt hb
hbes
es ob
obtt lp
lppe
pelr
lr grba
grba tk
tke
e renb
renbrh
rh tk
tklt
lt,, grba
grba tk
tke
e tdtdae
ae tk
tke
e
lutbabfdce tbbi tke wrbom sdhe bg tke rblh tb tke nbaadssdbo bg tke do`ury, suggdndeot tdae
doterveoeh tb mdve tke hegeohlot lo bppbrtuodty tb nbrrent tke lnt bg kds hrdver.
hrdver. Dostelh, dt lppelrs
wdtk gldr ncelroess tklt tke dotervlc fetweeo tke turodom but tb aeet loh plss tke street nlr loh
tke klppeodom bg tke lnndheot wls sb salcc ls obt tb fe suggdndeot tb nklrme hegeohlot wdtk tke
oemcdmeone bg tke hrdver
hrdver..
 

30 Phil 624

 T
 Torts
orts and Damages
Damages – Due Dili
Diligence
gence as a De
Defense
fense

On May 14, 111, !eynes rented a car from "nternational #arage o$ned and
o%erated &y 'amire() *s %er the arrangement, 'amire( $ould also %ro+ide for the
dri+er and a machinist) !eynes $as to used the car to trans%ort %eo%le from esta
for %rot) The car $as actually &rand ne$ and $as only used a fe$ hours) On May
16, 2011, $hile dri+en on the road, the automo&ile, &y reason of a defect in the
steering gear, refused to o&ey the direction of the dri+er in turning a corner in the
streets, and, as a conse-uence, ran across the street and into the $all of a house
against $hich the daughter of .ahia $as leaning at the time) The front of the
machine struc/ the child in the center of the &ody and crushed her to death)

" hether or not !eynes is lia&le in the case at &ar)

5!D o) hile it may &e said that, at the time of the accident, the chau7eur $ho
$as dri+ing the machine $as a ser+ant of !eynes, in as much as the %rots deri+ed
from the tri%s of the automo&ile &elonged to him and the automo&ile $as o%erated
under his direction, ne+ertheless,
ne+ertheless, this fact is not conclusi+e in ma/ing him
res%onsi&le
res%on si&le for the negligence of the chau7eur or for defects in the automo&ile
itself) *rticle&ut
negligence, 103 of%ro+ides
also the 8i+il $hen
8ode not
thatonly esta&lishes
lia&ility lia&ility
shall cease) in cases of
"t says

 The lia&ility referred

referred to in this a
article
rticle shall cease
cease $hen the %ersons
%ersons menti
mentioned
oned
therein %ro+e that they em%loyed all the diligence of a good father of a family to
a+oid the damages)

9rom this article t$o things are a%%arent :1; That $hen an in<ury is caused &y the
negligence of a ser+ant or em%loyee there instantly arises a %resum%tion of a la$
that there $as negligence on the %art of the master or em%loyer either in the
selection of the ser+ant or em%loyee, or in su%er+ision
su%er+ision o+er him after the selection,
or &oth= and :2; that %resum%tion is <uris tantum and not <uris et de <ure, and
conse-uently, may &e re&utted) "t follo$s necessarily
necessarily that if the em%loyer sho$s to
the satisfaction of the court that in selection and su%er+ision he has e>ercised the
care and diligence of a good father of a family, the %resum%tion is o+ercome and he
is relie+ed from lia&ility)

*s to selection, !eynes has clearly sho$n that he e>ercised the care and diligence of 
a good father of a family) 5e o&tained the machine from a re%uta&le garage and it
$as, so far as a%%eared, in good condition) The $or/men $ere li/e$ise selected
from a standard garage, $ere duly licensed &y the #o+ernment in their %articular
calling, and a%%arently thoroughly com%etent) The car had &een used &ut a fe$
hours $hen the accident occurred and it is clear from the e+idence that !eynes had
no notice, either actual or constructi+e, of the defecti+e condition of the steering
gear)

hile it does not a%%ear that !eynes formulated rules and regulations for the
guidance of the dri+ers and ga+e them %ro%er instructions, designed for the
%rotection
%rotection of the %u&lic and the %assengers, the e+idence sho$s that the death of
 

the child $as not caused &y a failure to %romulgate rules and regulations) "t $as
caused &y a defect in the car as to $hich !eynes has sho$n himself free from
res%onsi&ility)
 ERNESTO MARTIN V. CA AND MERALCO

G.R. No. 82248 January 30, 1992

FACTS:

Ernesto Martin was the owner of a private car bearing license plate No.
NPA-930. At around 2 o’clock in the morning of May 11, 1982, while being driven by
Nestor Martin, it crashed into a Meralco electric post on Valley Golf Road, in Antipolo,
Rizal. The car was wrecked and the pole severely damaged. Meralco subsequently
demanded reparation from Ernesto Martin, but the demand was rejected. It thereupon
sued him for damages in the Regional Trial Court of Pasig, alleging that he was liable to
it as the employer of Nestor Martin. The petitioner’s main defense was that Nestor
Martin was not his employee. Meralco did not present any evidence to prove that Nestor
Martin was the employee of Ernesto Martin and Ernesto Martin did not rebut such
allegation.

ISSUE:

WON Ernesto Martin can be held liable.

HELD:

NO. Meralco had the burden of proof, or the duty “to present evidence on the fact
in issue necessary to establish his claim” as required by Rule 131, Section 1 of the
Revised Rules of Court. Failure to do this was fatal to its action. As the employment
relationship between Ernesto Martin and Nestor Martin could not be presumed, it was
necessary for the plaintiff to establish it by evidence. It was enough for the defendant to
deny the alleged employment relationship, without more, for he was not under
obligation to prove this negative averment. This Court has consistently applied the rule
that “if the plaintiff, upon whom rests the burden of proving his cause of action, fails to
show in a satisfactory manner the facts upon which he bases his claim, the defendant is
under no obligation to prove his exception or defense.” Petition was granted.
 Pantranco North Express, Inc. V. Maricar Baesa (1989)

G.R. 79050-51
November 14, 1989
Topic: Last Clear Chance (Torts and Damages)

Facts:
▪ Spouses Baesa, their 4 children, the Ico spouses and their son and 7 other people boarded a passenger
jeep driven by David Ico to go to a picnic in Isabela, to celebrate the 5th wedding anniversary of the
Baesa spouses.
▪ While they were proceeding towards Malalam River at a speed of about 20 kph, a speeding
PANTRANCO bus from Aparri, on a route to Manila, encroached on the jeepney’s lane while
negotiating a curve, and collided with it.
▪ As a result, the entire Baesa family, except for their daughter Maricar Baesa, as well as David Ico, died,
and the rest suffered from injuries. Maricar Baesa, through her guardian filed separate actions for
damages arising from quasi-delict against PANTRANCO.
▪ PANTRANCO: alleged David Ico's negligence as a proximate cause of the accident and invoked the
defense of due diligence in the selection and supervision of its driver.
▪ CA upheld RTC: favor of Baesa

Issue: W/N the last clear chance applies thereby making David Ico who had the chance to avoid the collision
negligent in failing to utilize with reasonable care and competence. NO

Ruling:
▪ Generally, the last clear change doctrine is invoked for the purpose of making a defendant liable to a
plaintiff who was guilty of prior or antecedent negligence, although it may also be raised as a defense
to defeat claim for damages.
▪ For the last clear chance doctrine to apply, it is necessary to show that the person who allegedly has
the last opportunity to avert the accident was aware of the existence of the peril, or should, with exercise
of due care, have been aware of it.
▪ There is nothing to show that the jeepney driver David Ico knew of the impending danger
▪ When he saw at a distance that the approaching bus was encroaching on his lane, he did not
immediately swerve the jeepney to the dirt shoulder on his right since he must have assumed that the
bus driver will return the bus to its own lane upon seeing the jeepney approaching form the opposite
direction.
▪ Even assuming that the jeepney driver perceived the danger a few seconds before the actual collision,
he had no opportunity to avoid it.
▪ Last clear chance doctrine can never apply where the party charged is required to act instantaneously,
and if the injury cannot be avoided by the application of all means at hand after the peril is or should
have been discovered.
CUISON V. NORTON & HARRISON Co, 55 PHIL 18 (1930)
FACTS:
In August 1928, Moises Cuison (7 years old) was on his way to Santa Mesa School with
his sister. As they came near the fire station, some large pieces of lumber fell from a
truck, pinning the boy beneath thereby causing his death.

The truck, owned by Ora, was driven at the time by Jose with 2 minors, Binoya and
Bautista as helpers. Binoya and Bautista were employees of Ora

Said truck was rented by Ora to defendant Norton & Harrison, a lumber company. And
Ora worked for the defendant as foreman (capataz). As foreman, it was his duty to
direct the loading and transporation of the lumber.

Prior to the accident, some of the lumber had loosened in the truck and as such, the
truck stopped so the cargo could be rearranged (However, the incident occurred before
the lumber could be rearranged

ISSUE: WON Norton & Harrison is liable as employer

HELD: Yes. Although the lower court did not determine the nature of relationship
between Ora and Norton it can be inferred from the testimonies given that Ora, as
owner of the truck, is a contractor of Norton. And at the same time, he is also an
employee of Norton because he also acts as a foreman (capataz) of the company. As
such, Norton is liable as an employer because of Ora’s negligence in directing his men
in securing the lumber. The pertinent provisions provide:

Norton failed to prove that it had exercised diligence in the selection of their employees.
The basis of civil liability here is not not respondeat superior but the relationship
of pater familias. This theory bases the liability of the master ultimately on his
own negligence and not on that of his servant.
 Pilipinas Shell Petroleum Corp. vs. Court of Appeals (1993)

Facts: Clarita T. Camacho, the operator of a gasoline station in Baguio City wherein she sells
Pilipinas Shell Petroleum Corp.’s (Shell) petroleum products, requested Shell to conduct a hydro-
pressure test on the underground storage tanks of the said station in order to determine whether
or not the sales losses she was incurring for the past several months were due to leakages therein.
Shell acceded to the said request and one Jesus “Jessie” Feliciano together with other workers
came to Clarita's station with a Job Order from Shell to perform the hydropressure test. Jessie
conducted the necessary procedures to carry out the said test.

At around 5:30 a.m. the next day, Clarita’s husband opened the station and started selling
gasoline. At about 6:00 a.m. however, the customers who had bought gasoline returned to the
station complaining that their vehicles stalled because there was water in the gasoline that they
bought. On account of this, Clarita was constrained to replace the gasoline sold to the said
customers. However, a certain Eduardo Villanueva, one of the customers, filed a complaint with
the police against Camacho for selling the adulterated gasoline. In addition, he caused the
incident to be published in two local newspapers.

Shell undertook to settle the criminal complaint filed by Villanueva. Subsequently, Villanueva
filed an Affidavit of Desistance. Thereafter, Camacho filed before the trial court a complaint for
damages against Shell due to the latter’s alleged negligence in the conduct of the hydropressure
test in her gasoline station. For its part, Shell denied liability because, according to it, the hydro-
pressure test on the underground storage tanks was conducted by an independent contractor. The
trial court dismissed the complaint which ruling was reversed by the Court of Appeals.

Issue: Whether Shell should be held accountable for the damage to Camacho due to the hydro-
pressure test conducted by Feliciano

Decision: It is a wellentrenched rule that an employeremployee relationship must exist before an

employer may be held liable for the negligence of his employee. Respondent Court of Appeals
coneluded that Feliciano was not an independent contractor but was under the control and
supervision of petitioner in the performance of the hydropressure test, hence, it held petitioner
liable for the former’s acts and omissions. We are not in accord with the above finding of
respondent Court of Appeals. As aptly held by the trial court, petitioner did not exercise control
and supervision over Feliciano with regard to the manner in which he conducted the hydro-
pressure test.

Feliciano is independently maintaining a business under a duly registered business name “JFS
Repair and Maintenance Service,” and is duly registered with the Bureau of Domestic Trade. He
does not enjoy a fixed salary but instead charges a lump sum consideration for every piece of
work he accomplishes. If he is not able to finish his work, he does not get paid, as what happened
in this case. Further, Feliciano utilizes his own tools and equipment and has a complement of
workers. Neither is he required to work on a regular basis. Instead, he merely awaits calls from
clients such as petitioner whenever repairs and maintenance services are requested. Moreover,
Feliciano does not exclusively service petitioner because he can accept other business but not
from other oil companies. All these are the hallmarks of an independent contractor. Being an
independent contractor, Feliciano is responsible for his own acts and omissions. As he alone was
in control over the manner of how he was to undertake the hydropressure test, he alone must bear
the consequences of his negligence, if any, in the conduct of the same.

Anent the issue of damages, the same has been rendered moot by the failure of private
respondent to establish an employeremployee relationship between petitioner and Feliciano.
Absent said relationship, petitioner cannot be held liable for the acts and omissions of the
independent contractor, Feliciano.
ROSALIO MARQUEZ, ET AL., plaintiffs-appellees,
vs.
BERNARDO CASTILLO, defendant-appellant.
G.R. No. 46237
September 27, 1939

FACTS: On April 30, 1937, in the Province of Tayabas, Fernanda Marquez died when she was
ran over by a vehicle owned by defendant Castillo and driven by Mariano Capulong. The plaintiffs
(heirs of Marquez) filed in the CFI of Tayabas for indemnity in the sum of P4,900. Maria
Chomacera also sought to collect for indemnity of P100 for certain injuries.

Defendant’s contention: He is not liable because in the selection and employment of Capulong, he
exercised the due diligence of a good father of a family.

Also, Castillo was not riding in the car at the time of the accident, and he did not know that his car
was taken by the chauffeur Mariano Capulong

Plaintiffs’ contention: According to Art. 103 of the RPC, the defendant is bound subsidiarily to
answer for the civil liability of said servant, subordinate, employee or chauffeur

ISSUE: Whether the owner of the car is liable for death / damages incurred by his driver at the
time that the car is used outside of the driver’s duty

RULING: No. The accident did not occur in the course of the performance of the duties or service
for which said chauffeur Mariano Capulong had been hired. The defendant did not hire him to do
as he pleased, using the defendant's car as if it were his own. His duties and service were confined
to driving his master's car as the latter ordered him, and the accident did not take place under said
circumstances. The subsidiary civil liability of the master, according to the provisions of article
103 of said Revised Penal Code, arises and takes place only when the servant, subordinate or
employee commits a punishable criminal act while in the actual performance of his ordinary duties
and service, and he is insolvent thereby rendering him incapable of satisfying by himself his own
civil liability.

The general rule regarding the obligation to repair the damage done, besides the one established
in article 103 of the Revised Penal Code, is that he, who by an act or omission causes the damage
through his fault or negligence, is the one called upon to repair the same (art. 1902, Civil Code).
This rule, which extends only to cases mentioned in articles 1903 to 1910 of said Code, is in no
way applicable to the appellant, all the more so because, as the lower court makes clear in its
decision, neither was he in his car at the time of the accident for which Mariano Capulong was
sentenced to pay an indemnity of P500 to the heirs of the deceased Marquez, nor was he negligent
in the selection of his chauffeur, since he hired in his service precisely one who is duly licensed to
drive a car.

Digested by: Kate Calansingin

 FILAMER CHRISTIAN INSTITUTE vs. HON. INTERMEDIATE
APPELLATE COURT, HON. ENRIQUE P. SUPLICO, in his capacity as
Judge of the Regional Trial Court, Branch XIV, Roxas City and
POTENCIANO KAPUNAN, SR.
G.R. No. 75112 August 17, 1992

The private respondents, heirs of the late Potenciano Kapunan, seek reconsideration of the decision
rendered by this Court on October 16, 1990 (Filamer Christian Institute v. Court of Appeals, 190 SCRA 477)
reviewing the appellate court's conclusion that there exists an employer-employee relationship between the
petitioner and its co-defendant Funtecha. In that case, the Court ruled that the petitioner is not liable for the
injuries caused by Funtecha on the grounds that the latter was not an authorized driver for whose acts the
petitioner shall be directly and primarily answerable, and that Funtecha was merely a working scholar who,
under Section 14, Rule X, Book III of the Rules and Regulations Implementing the Labor Code is not
considered an employee of the petitioner.

Facts:
Funtecha was a working student, being a part-time janitor and a scholar of petitioner Filamer
Christian Institute. He was, in relation to the school, an employee even if he was assigned to clean the school
premises for only two (2) hours in the morning of each school day. Allan Masa was the son of the school
president and at the same time he was the school’s jeepney service driver and a security guard of the
petitioner-school.

Having a student driver's license, Funtecha requested Allan Masa to take over the vehicle while the
latter was on his way home one late afternoon. It is significant to note that the place where Allan lives is also
the house of his father, the school president, Agustin Masa. Moreover, it is also the house where Funtecha
was allowed free board while he was a student of Filamer Christian Institute.

Allan Masa turned over the vehicle to Funtecha only after driving down a road, negotiating a sharp
dangerous curb, and viewing that the road was clear. According to Allan's testimony, a fast-moving truck with
glaring lights nearly hit them so that they had to swerve to the right to avoid a collision. Upon swerving, they
heard a sound as if something had bumped against the vehicle, but they did not stop to check. Actually, the
Pinoy jeep swerved towards the pedestrian, Potenciano Kapunan who was walking in his lane in the direction
against vehicular traffic and hit him. Allan affirmed that Funtecha followed his advice to swerve to the right.
At the time of the incident (6:30 P.M.) in Roxas City, the jeep had only one functioning headlight.

In the independent civil action, the lower court ruled that Filamer is subsidiarily liable for the tortious
act of Funcheta and was compelled to pay for damages based on Article 2180 which provides that employers
shall be liable for the damages caused by their employees and household helpers acting within the scope of
their assigned tasks. Filamer assailed the decision and it argued that under Section 14, Rule X, Book III of the
Labor Code IRR, working scholars are excluded from the employment coverage hence there is no employer-
employee relations between Filamer and Funcheta; that the negligent act of Funcheta was due to negligence
only attributable to him alone as it is outside his assigned task of being the school janitor. The CA denied
Filamer’s appeal but the Supreme Court agreed with Filamer. Kapunan filed for a motion for reconsideration.

Issue:
Whether or not Filamer Chritian Institute was an employer of Funtecha and as such, liable for the
injuries caused by Funtecha to Potenciano Kapunan.

Held:
The Supreme Court ruled in the affirmative.

The provisions of Section 14, Rule X, Book III of the Labor Code IRR was only meant to provide
guidelines as compliance with labor provisions on working conditions, rest periods, and wages is concerned.
This does not in any way affect the provisions of any other laws like the civil code. The IRR cannot defeat the
provisions of the Civil Code. In other words, Rule X is merely a guide to the enforcement of the substantive
law on labor. There is a distinction hence Section 14, Rule X, Book III of the Rules is not the decisive law in a
civil suit for damages instituted by an injured person during a vehicular accident against a working student of
a school and against the school itself.

The present case does not deal with a labor dispute on conditions of employment between an
alleged employee and an alleged employer. It invokes a claim brought by one for damages for injury caused by
the patently negligent acts of a person, against both doer-employee and his employer. Hence, the reliance on
the implementing rule on labor to disregard the primary liability of an employer under Article 2180 of the
Civil Code is misplaced. An implementing rule on labor cannot be used by an employer as a shield to void
liability under the substantive provisions of the Civil Code.

Funtecha is an employee of Filamer. He need not have an official appointment for a driver's position
in order that Filamer may be held responsible for his grossly negligent act, it being sufficient that the act of
driving at the time of the incident was for the benefit of Filamer (the act of driving the jeep from the school to
Masa’s house is beneficial to the school because this enables Masa to do a timely school transportation
service in the morning). Hence, the fact that Funtecha was not the school driver or was not acting with the
scope of his janitorial duties does not relieve Filamer of the burden of rebutting the presumption juris tantum
that there was negligence on its part either in the selection of a servant or employee, or in the supervision
over him. Filamer has failed to show proof of its having exercised the required diligence of a good father of a
family over its employees Funtecha and Allan.