MANLUCOB, Lyra Kaye, B.

/ Obligations and Contracts March 29,2023

Bernabe Africa, et al. v. Caltex, et al.

(G.R. No. L-12986, Mar. 31, 1966)

Facts
In March 1948, in Rizal Avenue, Manila, a tank truck was hosing gasoline into the
underground storage of Caltex. Apparently, a fire broke out from the gasoline station
and the fire spread and burned several houses including the house of Spouses
Bernabe and Soledad Africa. Allegedly, someone (a passerby) threw a cigarette
while gasoline was being transferred which caused the fire. But there was no
evidence presented to prove this theory and no other explanation can be had as to
the real reason for the fire. Apparently also, Caltex and the branch owner (Mateo
Boquiren) failed to install a concrete firewall to contain fire if in case one happens.
Issues:
Whether or not, Caltex be held liable for the damages caused to appellants.

Ruling:

Yes. This is pursuant to the application on the principle of res ipsa loquitur (the
transaction speaks for itself) which states: “where the thing which caused injury,
without fault of the injured person, is under the exclusive control of the defendant
and the injury is such as in the ordinary course of things does not occur if he having
such control use proper care, it affords reasonable evidence, in the absence of the
explanation, that the injury arose from defendant’s want of care.” The gasoline
station, with all its appliances, equipment and employees, was under the control of
Caltex and Boquiren. A fire occurred therein and spread to and burned the
neighboring houses. The persons who knew or could have known how the fire
started were Boquiren, Caltex and their employees, but they gave no explanation
thereof whatsoever. It is a fair and reasonable inference that the incident happened
because of want of care.

Note that ordinarily, he who charges negligence shall prove it. However, res ipsa
loquitur is the exception because the burden of proof is shifted to the party charged
of negligence as the latter is the one who had exclusive control of the thing that
caused the injury complained of.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

The Fidelity and Deposit Company of Mayland v.

William A. Wilson, et al.
(G.R. No. 2684)

Facts
The plaintiff filed a complaint against Wilson and The American Surety Company
asking that judgment be rendered against Wilson for the amount having been paid
by plaintiff to the Government under plaintiff's surety bond, that there be applied to
the payment of said judgment the said amount found in possession of Wilson and
that said plaintiff be preferred in its right to the said money and to receive the same;
and that a depositary be named by the court for the purpose of caring for and
administering said amount during the pendency of the case. H.D. Terrell filed a
complaint as intervenor in the case, alleging that the defendant Wilson had ceded
and transferred to the said Terrell all of his rights. Terrell claims the right of
ownership in and to the said sum and asks that the same be delivered to him as the
legitimate owner to the exclusion of the other parties in the case. The Fidelity and
Deposit Company of Maryland, the plaintiff in the principal cause, and The American
Surety Company of New York together in cooperation and against the claim of the
intervenor Terrell, alleging on their part, better right that the intervenor to receive the
sum in question, asked that the said sum be delivered to them in equal shares and
portions as part payment and on account of the amounts which they had paid
respectively to the Government as sureties on the bond of Wilson.
Issue
Whether or not the said sum be delivered to the plaintiff in equal shares and portions
as part payment and on account of the amounts which they had paid respectively to
the Government as sureties on the bond of Wilson.
Ruling
Yes. The transfer by itself did not produce nor could it produce the effect of transfer
to Terrell of the ownership of the funds so transferred and which were then in the
possession of the said Treasurer. To have this effect, it would have been necessary
that the delivery of the funds had been made directly to Terrell, which fact has not
been proved at any time. The funds were in the possession of Treasurer Branagan
and afterwards were transferred to the possession of the depositary appointed, by
the court where such funds now are, and this without ever having been taken
possession of the intervenor Terrell. It is not alleged, nor it is claimed by Terrell, that
the delivery of the funds was ever made in any manner recognized by the law.
Neither of the two creditors should enjoy preference with regard to the other.
Preference is determined by the nature of the credit in some cases and by the
priority of date in others. The two creditors should be paid pro rata from the funds in
question and without consideration of the dates.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

RUFO QUEMUEL VS. THE COURT OF APPEALS and THE PEOPLE OF THE
PHILIPPINES
(G.R. No. L-22794 January 16, 1968)
FACTS:
This is a petition for review on certiorari of a decision of the Court of Appeals.
After being found guilty of libel, Rufo Quemuel was given an undetermined
punishment that might range from three months and eleven days of mayor detention
to one year, eight months, and twenty-one days of correccional prison. He appealed
to the CA and it affirmed petitioner's conviction but imposed the penalty of
imprisonment, a fine of P500.00, and added a P2.000.00 indemnity to the offended
party, with subsidiary imprisonment not to exceed six months, in case of insolvency.
aside from the costs.
Quemuel argued that such is erroneous because the offended party did not make
un appeal. He also contended that subsidiary imprisonment in this case violates his
constitutional right against imprisonment for non-payment of debt. Petitioner also
maintained that there is no proof that damages had been sustained by the offended
party.
ISSUE:
WON the Court of Appeal and has the authority to review the decision of lower court
or certiorari and modify the penalty in criminal judgement despite absence of appeal
from offended party.
HELD:
Yes. The appeal in a criminal case opens the whole case for review and this includes
the penalty, which may be increased and the indemnity is part of the penalty. "The
indemnity which a person is condemned to pay forms an intrinsic part of the penalty,
it being specifically specified by Art. 100 of the RPC that every person criminally
accountable is civilly liable," is said in Bagtas v. Director of Prisons also article 104 of
RPC that indemnification or libel is a civil liability. The authority to assess damages
or indemnity in criminal cases is vested in trial courts only in the first instance. On
appeal, such authority passes to the appellate court. Thus, this Court has, in many
cases, increased the damages awarded by the trial court, although the offended
party had not appealed from said award, and the only party who sought a review of
the decision of said Court of was the accused. With regards the alleged absence of
proof that the offended has suffered, it must be stressed that, by its very nature, libel
causes dishonor, disrepute and discredit; that injury to the reputation of the offended
party is a natural and probable consequence of the defamatory words in libel cases;
that "where the article is libelous per se, the complainant in libel proceedings is not
necessary to submit evidence of real damages; and that the law suggests damages.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

Chavez v. Gonzales
(G.R. No. L-27454, Apr. 30, 1970)

Facts:
On July 1963, Rosendo Chavez, the plaintiff, delivered his typewriter to Fructuoso
Gonzales, the defendant, a typewriter repairman for cleaning and servicing. After 3
months, the plaintiff paid P6 to the defendant to purchase spare parts. Because of
the delay in repair, the plaintiff decided to retrieve the typewriter from the defendant.
When he opened and examined it, the interior cover, some parts, and screws were
missing. October 29, 1963, the plaintiff sent a letter to the defendant to return the
missing parts, the interior cover, and a sum of ₱6. The following day, the defendant
returned to the plaintiff some of the missing parts, the interior, and a sum of ₱6.

August 29, 1964, the plaintiff had his typewriter repaired by freixas Business
Machines, which cost him ₱89.85. A year later, the plaintiff filed an action before the
City of Manila, demanding from the defendant the payment of ₱1,190 for damages
including attorney’s fees. There are no denials from the defendant. The repair
invoice shows that the missing parts had a total of ₱31.10 only.

Judgment is hereby rendered ordering the defendant to pay the plaintiff the sum of
₱31.10, and the cost of the suit. Chaves appealed, because it only awarded the
value of the missing parts of the typewriter, instead of the whole cost of labor and
materials that went into the repair of the machine. It is clear that the defendant
contravened the tenor of his obligation.

The appealed judgment is hereby modified, by ordering the defendant to pay, as he

is hereby ordered to pay, the plaintiff the sum of ₱89.85, with interest at the legal
rate from the filing of the complaint. Costs in all instances against appellee Fructuoso
Gonzales.

Issue:
Whether or not the defendant is liable for the total cost of the repair of a typewriter.

Ruling:
No. the defendant is not liable for the total cost of the repair made by Freixas
Business Machine instead he is only liable for the cost of the missing parts and
screws which amounted to ₱31.10. The defendant contravened the tenor of his
obligation in repairing the typewriter of the plaintiff and returned it with missing parts.
The defendant is liable under Article 1167. If a person obliged to do something fails
to do it, the same shall be executed at his cost. This same rule shall be observed if
he does it in contravention of the tenor of the obligation. Furthermore, it may be
decreed that what has been poorly done be undone.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

De la Rosa v. BPI, 51 Phil. 926

(G.R. No. L-22359, November 28, 1924)

Facts:
An action of complaint was instituted against Bank of Philippine Islands ( BPI) that
the said bank refrained from naming judges and awarding of prizes of a contest of
designs and plan for a construction of building, declaring that prizes would be
awarded not later than November 30, 1921. The plaintiff joined in the contest that the
said bank started. Having performed work and incurred expenses for that purpose;
the plaintiff requests that a judgment be entered in his favor for the amount of
P30,000 in damages, plus interest and costs. The defendant bank was ordered by
the court to pay the plaintiff P4,000 in indemnity and expenses following the trial.
Both parties appealed this judgment.

Issue:
Whether or not the date set for the awarding of the prizes was a controlling requisite
in the contract and therefore the failure to award the prizes on said date was a mora
solvendi (default on the part of the debtor) and thus a breach of contract.

Ruling:

The defendant bank cannot be held to have been in default through the mere lapse
of time. For this judicial or extrajudicial demand was necessary for the performance
of the obligation, and it was not alleged here, nor does it appear that before bringing
this action the plaintiff had ever demanded it from the defendant bank in any manner
whatsoever. The defendant bank, therefore, was not in default. The plaintiff's
allegation that the defendant bank abstained from continuing the contest was not
proven. On the contrary, it was proved, and so stated in the decision appealed from,
that during the trial of this case in the Court of First Instance the designs were on the
way to New York where they were sent to a technical committee.

It appearing that the defendant bank was not in default it is needles to discuss the
other questions raised, all depending upon the existence of said default. We find the
plaintiff has no cause of action in this case, the judgment appealed from is reversed
and the defendant is entirely absolved from the complaint, without any express
finding as to costs.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

Vda. de Villaruel, et al. v. Manila Motor Co. & Caloniares

(G.R. No. L-10394, Dec. 3, 1958)

Facts:

Plaintiffs Villaruel and Defendant Manila Motors Co. entered into a contract in which the
plaintiff agreed to lease to defendant. The term of lease was for 5 years and renewable
for another 5 years.

Manila Motor Co. then agreed to pay Plaintiffs 300 pesos as monthly rental payable on
the 5th of each month and 50 pesos for the residential house. The premises were in their
possession on October 31, 1940. This continued until 1941 after which the property was
held by the Japanese forces until March 29, 1945. No payment was made during those
times.

The American forces later occupied the same and rentals were paid by the occupants at
the same rate that the defendant paid plaintiffs. When the American forces left the
premise, the branch manager decided to extend the lease for another 5 years and they
agreed that the 7-month occupancy of the US forces would not be counted as part of the
new 5-year lease. Before resuming the collection of the rentals, Dr. Villaruel with the
advice of Atty Hilado, demanded payment for the period occupied by the Japanese
forces. Defendant refused to pay and Plaintiff gave a notice for recession of the contract
of lease.

The plaintiff commenced an action before the CFC of Negros Occidental against
defendant company. During the pendency of the case, the leased building was burned
down. Because of the occurrence, plaintiffs demanded reimbursement from the
defendants, but having been refused, they filed a supplemental complaint to include 3rd
cause of action, the recovery of the value of the burned building. The trial court rendered
judgment in favor of the plaintiff. Hence the defendants appeal.

Issue:

Whether or not Manila Co. is liable for the loss of the leased premises.

Ruling:

No. Clearly, the lessor’s insistence upon collecting the occupation rentals for 1942-1945
was unwarranted in law. Hence, their refusal to accept the current rentals without
qualification placed them in default with the result that thereafter, they had to bear all
supervening risks of accidental injury or destruction of the leased premises. In other
words, the only effect of the failure to consign the rentals in court was that the obligation
to pay them subsisted and the lessee remained liable for the amount of the unpaid
contract rent, corresponding to the period from July to November, 1946; it being
undisputed that, from December 1946 up to March 2, 1948, when the commercial
building were burned, the defendants appellants gave paid the contract rentals at the
rate of P350 per month. But the failure to consign did not eradicate the default of the
lessor nor the risk of loss that lay upon them.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

BANGKO SENTRAL NG PILIPINAS v. JESUS G.

SANTAMARIA G.R. No. 139885 | January 13, 2003

FACTS:
Jesus G. Santamaria, who conducts business as J. Santamaria, was invited by
the Bangko Sentral ng Pilipinas (BSP). Santamaria and Associates (JSA), to submit
a proposal for Project Construction Management (PCM) services for its Regional
Unit Building in Lucena City. JSA initially offered a lump sum fee of P1,087,963.56
for a total service period of 10 months, but later reduced it to P676,044.35 instead.

The contract stated that JSA would handle project management, design
management, and construction management, ensuring a high level of quality control
and inspection. BSP issued a Notice of Award to JSA on January 7, 1993, and on
March 13, 1993, they entered into a "Contract for the Project Construction
Management Services."

JSA performed its obligations under the contract, but BSP refused to pay JSA’s
billings amounting to P621,666.53, prompting JSA to file a claim for arbitration with
the Construction Industry Arbitration Commission (CIAC) (CIAC).

The CIAC ruled in favor of JSA and mandated that BSP pay the unpaid billings
and associated interest. BSP filed an appeal with the Court of Appeals (CA), but the
CA upheld the judgment of the CIAC. BSP filed a petition for review on certiorari with
the Supreme Court.

ISSUE:
Whether BSP is liable to pay JSA’s unpaid billings and corresponding interest.

RULING:
The Supreme Court upheld the CA's decision, ruling that BSP is obligated to pay
JSA’s unpaid billings plus interest.

The Court concluded that BSP failed to demonstrate that JSA violated the terms of
their contract. BSP’s position that it was not able to assess the quality of JSA’s work
owing to its dependence on JSA’s expertise was considered insufficient to free BSP
of its responsibility to pay for the services given by JSA.

The Court also determined that the interest rate imposed by CIAC is reasonable
and consistent with current jurisprudence.

Accordingly, the Supreme Court denied BSP’s petition for review on certiorari
and affirmed the CIAC’s decision ordering BSP to pay JSA’s unpaid billings
and corresponding interest.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

Buayan Cattle Co., Inc. v. Quintillan

(G.R. No. L-26970, Mar. 19, 1984)

Facts: Petitioner, Buayan Cattle Co., Inc. is the holder of Pasture Lease
Agreement No. 8, which covers 1,000 hectares of pasture land in Southern Cotabato.
Pasture Lease Agreement No. 2510, on the other hand, was allegedly issued in
favor of private respondent, Adan de Las Marias, covering 930 hectares of land
adjacent to that of petitioners. Upon issuance of the said agreement, the private
respondent immediately caused a relocation survey of the said area. The survey
showed that the boundaries of his land extended 580 hectares into the petitioner’s
pasture land. Thereupon, he removed the fence of the petitioner and started to set
up his own boundary fence.

The petitioner then filed a letter-complaint against the private respondent, alleging
the non-existence of the area leased under the latter’s pasture lease agreement and
suggesting remedial measures to protect the corporation’s interests. The acting
District Forester ordered the private respondent to stop putting fences until boundary
conflict resolved, eventually defied by the private respondent, who was then warned
that his non-compliance may cause the cancellation of his pasture lease. On
September 25, 1965, private respondent filed a complaint for injunction with
preliminary injunction docketed as Civil Case No. 631, with the Court of First
Instance of Cotabato, 16th Judicial District, Second Branch, seeking to enjoin
petitioner herein, Buayan Cattle Co., Inc., the Director of Forestry, et. al. from
restricting him in the exercise of his lease rights. GRANTED. WRIT ISSUED.
On October 4, 1965, petitioner filed a motion to dissolve said writ.

Issue: Whether or not, the issuance of the writ of injunction is null and

void.

Ruling: Yes. Upon the facts of the complaint filed, the writ of preliminary
injunction issued by the lower court is improper and without basis. It is clear from the
complaint that the first and older possessor of the disputed area is the petitioner
herein. The writ of preliminary injunction left private respondent unperturbed in the
occupation of the disputed area. It was he who unilaterally removed the fence of the
petitioner and set his own boundary fence 580 hectares into the petitioner’s pasture
land, thus violating herein petitioner’s superior right thereto. Therefore, respondent
Judge Hon. Quintillan committed a grave abuse of discretion when he issued the
writ of preliminary injunction dated September 29, 1965 in Civil Case No. 631, which
had the effect of restraining, not the wrongdoer, but the person in the vigilant
protection of his rights and those who come to the latter’s help. Wherefore, the
petition is hereby granted, the order for the issuance of a writ of injunction and the
order denying the motion to dismiss in Civil Case No. 631 are hereby set aside as
null and void.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

Philippine Long Distance Telephone Company, Petitioner, V. The National

Labor Relations Commission
[G.R. No. L-58004. May 30, 1983.]

Facts:

Several employees of the Philippine Long Distance Telephone Co. (PLDT) filed a
complaint before the National Labor Relations Commission (NLRC) alleging that they
were dismissed from their employment without just cause and without due process.
The NLRC found that the employees were indeed illegally dismissed and ordered
PLDT to reinstate them and pay them back wages. PLDT appealed the decision to
the Supreme Court, arguing that the NLRC committed grave abuse of discretion in
finding that the employees were illegally dismissed. PLDT claimed that the
employees were dismissed for a valid cause, which was their participation in a mass
demonstration in a so-called "telehygienic, that caused disruption to PLDT's services.

Issue:

Whether the dismissal of the employees was legal.

Ruling:

The Supreme Court affirmed the decision of the NLRC, finding that the employees
were illegally dismissed. The Court ruled that while PLDT had a valid reason to
discipline the employees for participating in a mass demonstration, the dismissal was
not warranted. The Court held that the penalty of dismissal was too severe
considering that the employees had been in service for several years and had no
previous derogatory record. The Court also found that the procedure for dismissing
the employees was flawed as they were not given an opportunity to be heard.

The Court ordered PLDT to reinstate the employees and to pay them back wages,
without qualification or deduction.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023
Bagumbayan Corporation v. Intermediate Appellate Court & Lelisa Seña
(G.R. No. 66274, Sep. 30, 1984)

Facts:
The tray containing the drinks was overturned and fell on Lelisa Seña when a waiter
named Baez was going to serve. The Seña’s sued the corporation, as an employer
of the waiter, for actual damages of P200,000 plus attorney`s fees of P10,000 and
such moral and exemplary damages as might be fixed by the court.

The corporation, in its answer, alleged that it came to know of the incident only when
it was served with a summons. Had the incident been brought to its attention on that
same night, it would have apologized immediately to the plaintiffs, made appropriate
amends, and disciplined the waiter and his supervisor.

The trial court awarded the Señas P1,540 as actual. It also awarded the Señas
P50,000 as moral damages, P10,000 as exemplary damages, and P5,000 as
attorney`s fees. The corporation appealed. The IAC affirmed the judgment by
modifying that the moral and exemplary damages were reduced to P15,000 and
P5,000, respectively.

Issue:
Whether or not the petitioner is liable for moral and exemplary damages.

Ruling:
The trial court sensibly emphasized that if the issue had been raised with the
corporation directly before the lawsuit was filed, legal action might have been
avoided. While the award for actual damages has some basis, the grant of moral and
exemplary damages is devoid of legal justification because it was not predicated
upon any of the cases enumerated under Articles 2217, 2219, and 2220 of the Civil
Code. The instant case is not specifically mentioned in article 2219, which refers to
quasi-delicts causing physical injuries. The Appellate Court erred in considering it as
analogous to the cases mentioned therein without indicating what specific case the
instant case resembles or is analogous to. Generally, moral damages cannot be
recovered if the case is not mentioned in articles 2219 and 2220. What we call moral
damages are treated in American jurisprudence as compensatory damages awarded
for mental pain and suffering or mental anguish resulting from a wrong. Generally,
damages for mental anguish are limited to cases in which there has been a personal
physical injury or where the defendant wilfully, wantonly, recklessly, or intentionally
caused the mental anguish. Nor will damages generally be awarded for mental
anguish which is not accompanied by a physical injury, at least where maliciousness,
wantonness, or intentional conduct is not involved. Seña is not the mental anguish
contemplated in article 2217 for which moral damages can be recovered.

The decision of the Appellate Court is modified. The petitioner is ordered to pay
Lelisa Seña the sum of P5,000 to cover her actual damages, litigation expenses, and
attorney’s fees. The award of moral and exemplary damages is eliminated.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

Phoenix Assurance Co. v. Macondray & Co., Inc.

(G.R. No. L-25048, May 13, 1975)

Facts:
On October 24, 1961 the SS Fernbank received from Saco Lowell Shops, Greenville,
South Carolina, a shipment consigned to the order of the Commercial Bank and
Trust Company, a Manila bank, with arrival notice to Floro Spinning Mills 280 Escolta,
Manila.

The shipment was insured for $5,450 with Phoenix Assurance Company of New
York against all risks including loss or damage.

On July 3, 1961 the consignee, Floro Spinning Mills, opened a letter of credit through
the Commercial Bank and Trust Company for the amount of $4,183.74 which was to
expire on October 31, 1961. The bill of lading further shows on its face that the
shipper paid to the vessel’s agent at the port of loading the sum of $46.20 as
freightage based on the gross weight of the shipment.

The Floro Spinning Mills, which is operated by P. Floro & Sons, Inc., filed claims with
Macondray & Co., Inc., the agent of the vessel, and with Ker & Company, Ltd., the
agent of the insurance company, for the value of the missing cargo in the total sum
of $1,512.78 (including freight, insurance premium and other charges) which was
equivalent to P4,554.98 at the prevailing rate of exchange of 3.011.

Macondray & Co., Inc. replied that the maximum limitation of the vessel’s liability was
$500 per package.

Phoenix Assurance Company paid the claim of Floro Spinning Mills in the sum of
P4,554.98. As subrogee, it filed this action against Macondray & Co., Inc. for the
recovery of the actual value of the missing cargo in the sum of P4,554.98.

Macondray & Co., Inc. pleaded the defense that it is liable only up to the sum of
$500 as stipulated in the aforementioned Clause 17 of the bill of lading.

Issue:
Whether or not Macondray & Co., Inc. is liable to recover the actual value of the
missing cargo.

Ruling:
No, the Supreme Court held that Macondray was liable to Phoenix only in the
amount of $500 as the shipper paid the freight based on the weight of the cargo and
not on its actual value which was not properly declared. Reiterating previous
decisions, the Supreme Court ruled that the stipulation limiting the carrier’s liability,
which is sanctioned by the Carriage of Goods by Sea Act, is valid and enforceable.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

Antonio Roque v. Bienvenido Buan

(G.R. No. L-22459, Oct. 31, 1967)

Facts:

On February 12, 1955, at about 2:00 o’clock in the afternoon, the plaintiff Antonio V.
Roque was a paying passenger in bus No. 397, operated by the defendants, which
left Manila for Angeles City, Pampanga. The bus was driven by Celestino Soliman,
an employee of the operator. the speed of the bus was about 60 kms. per hour.
When the bus was over the Sulipan bridge at Apalit, Pampanga, it met a cargo truck
coming from the opposite direction. To avoid colliding with the truck, the driver
swerved the bus to the right, which, however, sideswiped the railing of the bridge. So
violent was the impact that the two iron grills of a window of the bus were detached,
dangling thereat, and the rear right portion of the bus was dented inward. The
plaintiff was seated by the side of the window where the iron grills were detached,
with his right arm resting on the sill of the frame of the window. The injuries suffered
by him as a result of the impact are: "1. Abrasion multiple, upper extreme right; 2.
fracture — simple complete; 3. Wound lacerated, exposing elbow point right."

On June 7, 1955, the plaintiff filed this suit for damages against Bienvenido P. Buan
and Natividad Paras, co-administrators of the Estate of the deceased spouses
Florencio P. Buan and Rizalina Paras, in the Court of First Instance of Pampanga,
for alleged breach of contract of carriage, resulting from a traffic accident which
occurred at Sulipan Bridge in Apalit, Pampanga.

Issue:

Whether or not the bus company, Philippine Rabbit Bus Lines Inc., is presumed
negligent.

Ruling:

Yes. The common carrier or bus is presumed negligent. The driver had driven the
bus for only two weeks before the accident and had not yet sufficiently familiarized
himself with the behavior of his bus. As the defendants failed to prove their
observance of extraordinary diligence in discharging their obligation unto plaintiff,
their liability as public utility operator is beyond question.

Common carriers are presumed to have been at fault in case of death or injuries to
passengers unless it proves that they observed extraordinarily diligence. Indeed
when the action is based on a contract of carriage, and not of tort, the court need not
make an express finding of fault or negligence on the part of the carrier, for its
obligation is to transport the passenger safely.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

San Pedro Bus Line vs Navarro

(G.R. No. L-6291 April 29, 1954)

Facts:
On April 21, 1943, Nicolas Navarro filed a complaint in the Court of First Instance of
Rizal against the San Pedro Bus Line, Paulino de la Cruz and Teodulo Lacdan,
doing business in the name of the San Pedro Bus Line, claiming that the plaintiff
rode as a passenger in Manila bound bus No. TPU-7654 owned and operated by the
defendants; that while on its way the bus collided with another vehicle, causing
serious physical injuries to the plaintiff, with subsequent post-traumatic psychosis
which might incapacitate him for life; that as a result thereof the plaintiff suffered
damages, for actual medical and hospital expenses and loss of earning power, in the
total sum of P4,500 which the plaintiff sought to recover from the defendants.
However, the defendants admitted the occurrence of the accident, but disclaimed
responsibility for the accident.

Issue:
Whether or not the San Pedro Bus Line are liable for the damages they had cause to
Nicolas Navarro due to damages he had suffered because of the collision.

Ruling:
Yes, San Pedro Bus Line is liable because the action was not based on tort or quasi
delict (culpa aquiliana), but was one for breach of a carrier’s contract (culpa
contractual), there being a clear distinction between culpa as a source and creator of
obligations (aquiliana) and culpa in the performance of an already existing obligation
(contractual). As already held in the case of Castro vs. Acro Taxicab Co.** 46 Off.
Gaz., 2023, that translates “In order for the plaintiff’s action requesting compensation
for damages to prosper, it was enough to prove the existence of the passenger
contract, that is, that it caused injuries and damages to the passenger. According to
the enunciated doctrine, for the success of the action for damages it was not
necessary to prove fault, due to the negligence of the driver who drove the taximeter
No. 962.”
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

Lourdes Munsayac v. Benedicta de Lara

(G.R. No. L-21151, Jun. 26,1968)
Facts:
Benedicta de Lara a passenger on a jeepney owned and operated by Lourdes
Munsayac, filed an action for recovery of damages against the latter in the Court of
First Instance of Rizal (Pasig Branch) for she had suffered injuries from riding it. The
trial Judge found the driver recklessly negligent for he had drove at an excessive
speed, unmindful of the fact that the road was under repair and heedless of the
passengers' pleas that he go more slowly. Besides the award of compensatory
damages for actual expenses incurred and loss of income, Munsayac was ordered to
pay P 1,000.00 as exemplary damages and P 500.00 as to attorney's fees.
The defendant appealed to the Court of Appeals, which rendered a judgment of
affirmance, quoting the trial Court's justification for the award as follows: The
defendant's admission to the accident happened and the plaintiff's extensive injuries
as a results thereof, despite which the defendant failed, or even refused to placate
the suffering of plaintiff, necessitating the filing of his action, entitled to exemplary
damages - to set example to others - and attorney's fees.
Raising the case to the higher Court, by a petition for review on cetiorari, Munsayac
argued that the act referred to in Article 2232 must be one which is coetaneous with
and characterizes the breach of contract on which the suit is based, and not one
which is subsequent to such breach and therefore has no casual relation thereto,
such as the herein defendant's failure to placate the suffering of the plaintiff.
Issue:
Whether or not the plaintiff-appellee is entitled to exemplary damages.
Ruling:
The court found that there was no evidence of previous authority or subsequent
ratification by Munsayac insofar as the recklessness of the driver was concerned.
The causative negligence in accident cases where public carriers are involved is
personal to the employees actually in charge of the vehicle. The mere statement that
the defendant failed, even refused, to placate the suffering of the plaintiff,
necessitating the filing of the action, is too tenuous a basis to warrant the conclusion
that the defendant approved of the wrongful act of his servant with full knowledge of
the facts.
In view of the foregoing, the judgment appealed from is modefied by eliminating the
award for exemplary damages, and affirmed with respect to the attorney's fees. No
pronouncement as to cost.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

Ambaan, et al. v. Bellosillo, et al.

(CA-GR No. 56874-R, Jul. 8, 1981)

Facts:

There was a public utility jeep driven by a reckless driver as a result

of which passengers suffered injuries.

Issue:

Whether or not the passengers can sue the owner-operator of the vehicle.

Ruling:

Yes. The petitioner passenger can sue the owner-operator of the jeep without
necessity of first bringing a criminal case against the said driver. The governing law
in such case is the Civil Code which requires common carries to carry their
passengers safely to their destinations with the exercise of extraordinary diligence.
Considering the negligence of the driver it is clear that under the master and servant
rule, the liability of the owner-operator is not subsidiary but direct and immediate.
Indeed, the negligence of the servant in contractual obligations is the negligence of
the master. The master and the servant rule is also known as the doctrine of
“respondeat superior”. Under this rule, the master, to escape liability, cannot put up
the defense of a good father in the selection and supervision of employees (except
to mitigate said liability, if this defense duly proven).
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

Davao Gulf Lumber Corp. v. N. Baens del Rosario, et al.

(G.R. No. L-15978, Dec. 29, 1960)

Facts:
Review of a decision of the Workmen’s Compensation Commission.
On September 29, 1957, the truck of Davao Gulf Lumber Corporation carrying some
lumber from its sawmill to Davao City, accidentally overturned on the road. Vicente
Soriano, its driver, was killed instantly together with his son, Vicente Soriano Jr. His
widow, Flavia A. Soriano, claimed compensation on November 11, before the
Regional Office No. 8, at Davao, of the Department of Labor. Having found the driver
guilty of notorious negligence, the hearing officer denied compensation.
On appeal, the Chairman of the Workmen’s Compensation saw differently. He found
no such negligence, and awarded compensation. Fifteen days after receiving a copy
of such award, the Davao Gulf Lumber Corporation moved for reconsideration,
insisting that the accident was due to the deceased’s reckless negligence, and
pointing out the hearing officer's findings.
Issue:
Whether or not the accident was caused by the truck driver’s "notorious negligence".
Ruling:
No. The truck was running fast just before overturning because it was then on a
slope, and (as declared by the Commission) the "gear of the truck went out of order
rendering the gear shift useless," and that the brake "would not function." As to the
other circumstances, the Commissioner’s decision says the Company consented to
or authorized the trip. Concerning the non-registration of the truck in the Motor
Vehicle Office, and its defective condition — there is no finding that the driver knew
this at the time of driving. Registration of the vehicle was not his concern.
As his wife and children were present, this driver must have been extremely careful
— not reckless. What happened must have been unforeseen, it may only be blamed
upon the worn-out condition of the motor transport, or to "accident," for which the
employer is responsible, it having arisen out of and in the course of the deceased’s
regular duties as driver. (Sec. 2, Act No. 3428 as amended by Republic Act 772.).
The death was therefore, compensable. The Commission and the Court find no
notorious negligence.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

Juan F. Nakpil & Sons vs. CA et. al.

(G.R. No. L-47851 October 3, 1986)

Facts:

The Philippine Bar Association, a civic-non-profit association (the plaintiff), decided

to construct an office building on its 840 square meters lot located at the corner of
Aduana and Arzobispo Streets, Intramuros, Manila. The plans and specifications for
the building were prepared by the other third-party defendants Juan F. Nakpil & Sons
and it was undertaken on an "administration" basis, as the suggestion of Juan J.
Carlos, president and general manager of said corporation.

On August 2, 1968, an unusually strong earthquake hit Manila and its environs,
causing the building to tilt forward dangerously. As a temporary remedial measure,
the building was shored up by United Construction, Inc. at the cost of P13,661.28.
On November 29, 1968, the plaintiff commenced this action for the recovery of
damages arising from the partial collapse of the building.

Issue:

Whether or not an act of God, an unusually strong earthquake, which caused the
failure of the building, exempts from liability, parties who are otherwise liable
because of their negligence.

Ruling:

No. They are still subject to criminal liability. The following conditions must be met in
order for the obligor to be released from liability under Art. 1174 of the Civil Code for
a breach of an obligation caused by a "act of God":

a. The reason for the obligation's breach must not have been due to the debtor's
will;
b. The occurrence has to be unexpected or unavoidable;
c. The occurrence must be such that it prevents the debtor from meeting his
obligation in a typical way;
d. The debtor must not have contributed to or made the damage to the creditor
worse.

The report of the commissioner established that the defects that occurred to the
building could be attributed to the act of man specifically that of the architect and the
contractor, UCI. Nakpil & Sons are also liable for the inadequacies and defect in the
architectural plan and specifications. Costs are to be paid by the defendants
amounting to 5 million plus 100,000 for attorney's fee.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

Victorias Planters Assn., et al. v

Victorias Milling Co., Inc.
97 Phil. 318

FACTS:

In a contract, it was agreed that for 30 years, the planters would deliver their sugar
to a milling company. However, during the war (4 years) and during the period of
reconstitution (2 years), the milling company could not operate its mill.

ISSUE:

Should the period of 6 years be made up? In other words, should the planters be
required to deliver for 6 more years their sugar to the same mill to make up for what
had been lost?

RULING:

No more, because war is a fortuitous event that would relieve the planters from this
obligation since fulfillment then had been rendered impossible.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

ROBERTO C. SICAM and AGENCIA de R.C. SICAM, INC., petitioners

VS. LULU V. JORGE and CESAR JORGE, respondents.
G.R. No. 159617, Aug. 8, 2007
FACTS:
On different dates, Lulu Jorge pawned several pieces of jewelry with Agencia de R.
C. Sicam located in Parañaque to secure a loan. On October 19, 1987, two armed
men entered the pawnshop and took away whatever cash and jewelry were found
inside the pawnshop vault. On the same date, Sicam sent Lulu a letter informing her
of the loss of her jewelry due to the robbery incident in the pawnshop. Respondent
Lulu then wroteback expressing disbelief, then requested Sicam to prepare the
pawned jewelry for withdrawal on November 6, but Sicam failed to return the jewelry.

Lulu, joined by her husband Cesar, filed a complaint against Sicam with the RTC of
Makati seeking indemnification for the loss of pawned jewelry and payment of AD,
MD and ED as well as AF.

The RTC rendered its Decision dismissing respondents’ complaint as well as

petitioners’ counterclaim. Respondents appealed the RTC Decision to the CA which
reversed the RTC, ordering the appellees to pay appellants the actual value of the
lost jewelry and AF. Petitioners MR denied, hence the instant petition for review on
Certiorari.

ISSUE:
Whether or not the petitioners, Roberto C. Sicam and Agencia de R. C. Sicam, are
liable for the loss of the pawned articles in their possession.

RULINGS:

Yes. The Decision of the CA is AFFIRMED. Article 1174 of the Civil Code may
support the petitioner’s claims, as it said that, no person is held liable for any
fortuitous events. If only the person is not guilty of negligence (Art. 1170). Moreover,
the petitioners failed to show that they were free from any negligence by which the
loss of the pawned jewelry may have been occasioned. In result, as Article 1170
provides, those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor thereof, are
liable for damages.
MANLUCOB, Lyra Kaye, B. / Obligations and Contracts March 29,2023

Serrano v. Central Bank, et al.

(G.R. No. L-30511, Feb. 14, 1980)

Facts:

On October 13, 1966 and December 12, 1966, petitioner made a time deposit, for
one year with 6% interest, of P150,000 with the respondent Overseas Bank of
Manila. Despite a series of demands from the respondent Overseas Bank of Manila
for the encashment of the aforementioned time deposits, dating from December 6,
1967 to March 1968, not a single one of the time deposit certificates was honored by
the respondent Overseas Bank of Manila. Manuel Serrano petition for mandamus
and prohibition, with preliminary injunction, that seeks the establishment of joint and
solidary liability to the amount of P350,000, with interest, against respondent Central
Bank of the Philippines and Overseas Bank of Manila and its stockholders, on the
alleged failure of the Overseas Bank of Manila to return the time deposits made by
petitioner and assigned to him, on the ground that respondent Central Bank failed in
its duty to exercise strict supervision over respondent Overseas Bank of Manila to
protect depositors and the general public.

Issue:

Whether or not the Central Bank jointly and severally liable with respondents
Overseas Bank of Manila and its stockholders for the P350,000-time deposit made
with the latter bank, with all interests due therein.

Ruling:

No. The petitioner has no causes of action against the Central Bank to obtain those
reliefs. To recover time deposits plus interest from a distressed bank, the claim must
be ventilated in the Court of First Instance in the proper action, but this action should
not be one for mandamus or prohibition. It is not the Central Bank’s ministerial duty
to pay petitioner’s time deposits or to hold the mortgaged properties in trust for the
depositors of the Overseas Bank of Manila. Since the Overseas Bank of Manila was
found to be insolvent and the Superintendent of Banks was ordered to take over its
assets preparatory to its liquidation under section 29 of Republic Act No. 265, the
claim must be filed in the proper liquidation proceedings. Wherefore, the petition is
dismissed for lack of merit, with costs against the petitioner.